TRADE AND CIRCUSES - EXPLAINING URBAN GIANTS

Using theory, case studies, and cross-country evidence, we investigate the factors behind the concentration of a nation's urban population i n a single city. High tariffs, high costs of internal trade, and low l evels of international trade increase the degree of concentration. Eve n more clearly, politics (such as the degree of instability) determine s urban primacy. Dictatorships have central cities that are, on averag e, 50 percent larger than their democratic counterparts. Using informa tion about the timing of city growth, and a series of instruments, we conclude that the predominant causality is from political factors to u rban concentration, not from concentration to political change.