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Human capital is the bedrock on which success of cities sits: Edward Glaeser
The author and renowned urban economics professor speaks about strategies for high-return investments that benefit the poor, the need for strong local governments, and regulations that make it easier to build and use space efficiently in India.
The professor of economics says that India should embrace its urbanisation and accept that the growth of cities will enable its economy to grow and provide opportunity for millions of new workers.
The academic and author Edward Glaeser, who is the Fred and Eleanor Glimp Professor of Economics in the Faculty of Arts and Sciences at Harvard University, has consistently argued that cities become prosperous not because of grand physical infrastructure alone but because they enable the exchange of ideas, talent, and entrepreneurship. In this email interview with Frontline, Prof. Glaeser, who is the author of Triumph of the City (2011) and the co-author of Survival of the City (2022), shares his views on varied topics, including agglomeration economics, housing regulation, land-use policy, and urban governance. Edited excerpts:
user fees. He made the point—and it is still true today—that building infrastructure only when users can be expected to cover its costs is a great way to ensure that we build sensibly. While I accept that this ideal may be impossible in many contexts, both because of the difficulties of charging users and because equity considerations preclude imposing such charges on the poor, I remain convinced that we should strive to rely on user-fee financing as often as possible. This is particularly true for infrastructure used by businesses, like freight corridors, and infrastructure used predominantly by richer people, like airports.
Without user-fee financing, it is still possible to use cost-benefit analysis to guide us towards high return investment. Costs should include both financial costs and any damage to the environment. Benefits would include direct benefits to transportation users and possibly benefits to other entities, such as employers. Naturally, this analysis can be altered so that benefits for the poor are weighted more highly than benefits for the rich. Without a serious set of such analyses, it is impossible to make any general statements about these investments in physical infrastructure. Certainly, in the US context, we believe that much of the early highway investments were high return and many of the more recent investments were not. I should emphasise that I also believe that the returns to human capital are higher than the returns to investment in physical capital and this is particularly true in India. Schools, especially for the youngest Indians, generate huge returns, and these should certainly be prioritised. Human capital is the bedrock on which sits the success of cities, people, and nations.
Passengers of a free bus for women in Tiruchi, Tamil Nadu, on July 28. Edward Glaeser: “Bus rapid transit systems provide a less expensive alternative to trains.”
That being said, there are also demons that come with density. Traffic congestion, contagious disease, high housing prices, and crime are all occasional companions of urban growth. These problems can be handled with sensible public policies. Sewers and vaccination work against disease. Congestion pricing and good road paving increase road speeds. But these policies require strong governments. Singapore, for example, is particularly effective at dealing with the densities of big city life. Traditionally, Indian cities have been hampered in their ability to deal with these challenges by a lack of local control. Often State governments, which can be dominated by rural legislators, have controlled the tools needed to improve quality of life in urban areas. Strong and accountable local governments can help ensure that city growth improves both incomes and quality of life.
A delivery worker in Mumbai. Glaeser: “Digital infrastructure enables you to order something online, but you still need that thing to be delivered live.”
I don’t want to prioritise one regulation versus another. There are an enormous number of ways to say no to a building project. The key is to have an empowered local leader who has the ability to enable growth and the incentives to make that happen.
I am sure that Indian cities will continue to be on the front line of the battle to save their citizens from the ravages of water and heat that come with climate change. Drainage is important and so is access to air-conditioned facilities for vulnerable populations. I have been part of a learning group that is trying to understand these challenges better, and I hope that in a year or two, I will have more to share.
Urban sprawl in Visakhapatnam. Glaeser: “I have long been a critic of floor-area requirements that limit the growth of Indian buildings.”
But I also believe that India is not doing enough to push buildings together and allow high densities along walking corridors. Manhattan is a great model, and so is London. Singapore and Shanghai also work well. Tall buildings that are close together provide a much better mobility model than sprawl connected by trains. Moreover, India is also not doing enough to limit traffic within the existing grid. Congestion pricing provides a great way to reduce congestions. It was pioneered by Singapore in 1975, when Singapore was still a poor place. New York, London, and Stockholm all have congestion charges, and it is helpful everywhere. My colleague Gabriel Kreindler also finds that road roughness has a major impact on reducing traffic speeds in India, which suggests that better repaving practices can also speed the flow of traffic.
A balloon vendor and his children in Bengaluru. Glaeser: “Wages (and self-reported happiness) are both much higher in India’s cities than in rural areas.”
Triumph of the City focussed on India, what would its central argument be?