Difficult times for distribution

Cities are vital in organizing human coexistence and shaping the national economy. Establishing centers, towns, technology, and commercial zones generates economies of scale, facilitating the accumulation of production factors. The economic growth of cities and regions depends on capital accumulation, skills, and raw materials.

Good events in the process

Key institutions must align within a cohesive framework for sustainable growth and development. Change is essential; along this process, human capital and a strong education system have more advantages than material resources. We need coordinated elites and productive individuals for development, and an accountable government will be required. Strategies will be guided by citizens' needs, emphasizing collaboration between the private sector and the government. Ineffective interventions will be replaced with optimal oversight, and government ownership will decrease as it invests in public sectors where the private sector is reluctant to go. Investment should drive productivity, growth, and profitability, restoring confidence in the capital market and encouraging saving and investment. Campaigns will emphasize cost-benefit analyses, and external resources will be used effectively. This will enhance production, employment, and adoption of new technologies while promoting competition and preventing monopolies.

Factor differences

Factor endowment theory (Bertil Ohlin) states that different products require varying proportions of production factors, and urban areas have diverse endowments. This initial regional inequality tends to grow as connections between regions increase. The movement of capital and labor highlights regional disparities. Regions grow based on their ability to accumulate production factors and use optimal technologies. Only those with better access to essential resources—land, capital, and skilled labor—will benefit at each growth stage.

The theory of cumulative causality (Gunnar Myrdal) explores regional income disparities, linking the impoverishment of poor areas to the loss of labor and resources and the decline of traditional professions. The "confusion effect" refers to factors creating a gap, while the "dispersion effect" describes how developmental benefits shift from rich to poor areas. Albert O. Hirschman contrasts the "polarization effect" with the "confusion effect" and the "trickle-down effect" with the "dispersion effect," arguing that the polarization effect is stronger.

Redistribution pains

In marginalized areas, factors such as introversion, severe inequalities, high unemployment, and low growth, the region's declining position in the national economy, falling per capita income, inability to utilize technology, weak income growth, and the unlimited supply of labor in the subsistence sector of the economy (Arthur Lewis) all ultimately drive people to migrate. Migration is mainly an economic phenomenon driven by desired (not real) income potential. Two key factors influencing migrant behavior (Michael Todaro):

1. The income disparity between urban and rural areas.

2. The job-finding likelihood, that is inversely related to urban unemployment rates.

Will the expanding connections between the #rich region and #poor #region benefit both? Can capital influx and smart investment planning promote growth for all? Promoting a more equitable distribution of benefits, and redistributing basic production factors to more urban areas may be necessary, though it could hinder growth (Adelman). Efforts are being made to lessen the dominance of large cities and improve the distribution of resources by creating medium-sized urban areas that attract migrants.