Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81069
Authors: 
Dorosh, Paul
Thurlow, James
Year of Publication: 
2012
Series/Report no.: 
WIDER Working Paper 2012/50
Abstract: 
Rapid urbanization is an important characteristic of African development and yet the structural transformation debate focuses on agriculture's relative merits without also considering the benefits from urban agglomeration. As a result, African governments are often provided conflicting recommendations on the importance of rural agriculture or urban industry. We develop dynamic economy-wide models for Ethiopia and Uganda that capture both traditional aspects of the debate (growth linkages and foreign trade) and benefits from urbanization (internal migration and agglomeration effects). Simulations suggest that urban agglomeration is an important source of long-term growth and structural transformation, but that investing in cities does not greatly reduce national poverty over the short-term. In this regard, agricultural growth is more effective, albeit with slower national growth. Given these trade-offs, we conclude that the urbanization's benefits argue against an agro-fundamentalist approach to African development, but the short-term imperative of reducing poverty necessitates further agricultural investment.
Subjects: 
urbanization
rural development
growth
poverty
CGE model
Africa
JEL: 
D58
O18
R11
R23
ISBN: 
978-92-9230-513-0
Document Type: 
Working Paper

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