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publication January 21, 2022

Place, Productivity, and Prosperity: Spatially Targeted Policies for Regional Development


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More and more people are choosing to live in cities. They offer better opportunities, better services, and sanctuary from conflict and the effects of climate change influences. Yet large numbers of people are unable for various reasons to move to cities—skills mismatches, reluctance to sell land at a loss, and sometimes because of explicit policy restrictions that limit people’s movement within countries. These choices have major implications for a person’s standard of living, particularly in developing countries.

Living standards of people within developing economies vary greatly—to a much greater degree than in high-income economies. Such gaps largely reflect differences in productivity—the central driver of living standards across the world.

These differences increasingly have spurred governments to adopt well-intentioned policies to improve the livelihoods of those in “places left behind.” Yet the results often fall short of expectations, leaving billions of people farther behind while eroding public confidence in government initiatives.

There are ways to boost productivity and incomes in economically lagging regions of developing economies—and this book offers an important new roadmap and encourages policymakers to consider, where appropriate, alternatives to place-based policies—such as policies that facilitate migration, skills development, social transfers, and safety nets.