2014 Annual Conference "Cities and Development: Urban Determinants of Success"

DRI's annual conference took place on November 18, 2014 in the Rosenthal Pavilion of NYU Kimmel Center.  350 guests attended to hear the presentations and discuss research that examines cities as dynamic units at which development happens. The event was co-hosted by the NYU Marron Institute of Urban Management.

Program and Speakers:

Download the conference program with speaker bios here.

Photographs (courtesy of Dave Anderson):

[shareprints gallery_id="5803" gallery_type="filmstrip" gallery_position="pos_center" gallery_width="width_100" image_size="xlarge" image_padding="0" theme="light" image_hover="false" lightbox_type="slide" comments="false" sharing="true"]Videos (courtesy of Dave Anderson):

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[expand title="Click to view the conference abstract"] The success and failure of cities reveal powerful development forces which are hard to see on a national scale. Ideology, policy, risk, and the spread of people, goods and ideas operate in unique ways in urban environments. "Cities and Development: Urban Determinants of Success" presents city-level analyses that bring new perspectives to development debates. [/expand]

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[expand title="Click to view the abstract for Paul Romer's 'The Power of the Grid'"]

In coming decades, urban populations will grow fastest in places where government capacity is most limited. If governments set the right priorities, these limits need not preclude successful urban economic development. The history of New York City shows that a government with limited capacity can implement measures that cost little, have a high social rate of return, increase its future tax base, and encourage the development of norms that support the rule of law. The Commissioner’s Plan of 1811 defined and protected a network of public space in the city’s expansion area that could then be used to encourage mobility, provide utilities, and directly enhance the quality of urban life. City governments that focus first on this foundation and then follow with laws and a system of enforcement that protect public health and limit violence can create urban environments in which private actions can drive successful economic development. [/expand]

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[expand title="Click to view the abstract for Bill Easterly and Laura Freschi's 'A Long History of a Short Block: Four Centuries of Development Surprises on a Single Stretch of a New York City Street'"]

National and even city aggregates can conceal dynamism at smaller scales. A history of one block in Manhattan over more than a century shows how it had many ups and downs and many turbulent transitions, but twice achieved unexpected and remarkable success. (Work is co-authored with Steven Pennings.) [/expand]

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[expand title="Click to see the abstract and get the paper download link of Alain Bertaud's 'The Effects of Top-Down Design versus Spontaneous Order on Housing Affordability: Examples from Southeast Asia''"]

The spatial structure of large cities is a mix of top-down design and spontaneous order created by markets. Top-down design is indispensable for the construction of metropolitan-wide infrastructure, but as we move down the scale to individual neighborhoods and lots, spontaneous order must be allowed to generate the fine grain of urban shape. At what scale level should top-down planning progressively vanish to allow a spontaneous order to emerge? And what local norms are necessary for this spontaneous order to result in viable neighborhoods that are easily connected to a metropolitan-wide infrastructure? Examples from Southeast Asia show that an equilibrium between top-down designed infrastructure and neighborhoods created through spontaneous order mechanisms can be achieved. This equilibrium requires the acknowledgement by the government of the contribution of spontaneous order to the housing supply. Spontaneous order ignored or persecuted by government results only in slums. Download paper here. [/expand]

[embed]http://youtu.be/B0hMS4eUVV8[/embed]

[expand title="Click to view the abstract for Nassim Nicholas Taleb's 'Small Is Beautiful--But Also Less Fragile"]

We use fragility theory to show the effect of size and response to uncertainty, how distributed decision-making creates more apparent volatility, but ensures long term survival of a system. Simply, economies of scale are more than offset by stochastic diseconomies from shocks and there is such a thing as a “sweet spot” in optimal size. We show how city-states fare better than large states, how mice and small species are more robust than elephants, and how the canton mechanism can potentially solve Near Eastern problems. [/expand]

Coverage

Urb.im has launched a series of blog posts about our conference. Here are the first two posts on Paul Romer's presentation, and William Easterly and Laura Freschi's talk.

Bill Gates' Dictator Problem

NPR’s The Takeaway asks in an interview with one of our local troublemakers this week, are billionaire philanthropists the true champions in the fight against poverty? Listen to at least part of the audio to get the tone of the critique, as well as read the selected transcripts below. [audio mp3="http://www.nyudri.org/wp-content/uploads/2014/02/piece01.mp3"][/audio]

Bill Easterly: I have nothing to take away from the billionaires who are very generous, who are spending on the poor rather than on private jets – that’s great. But what can actually happen is they can also have too much influence on the way we see the whole problem of global poverty.

… Gates has this 'great man' approach to development in which he sees great national leaders and great philanthropists like himself doing all the good things that happen. Unfortunately, the Ethiopian government…that he praised a year ago in his Annual Letter from his Foundation is not doing great things. He is very naïve to think that the government is benevolent and is actually contributing to development. They actually are serial human rights abusers that are destroying development.

… Before Gates’ annual letter… there was a peaceful blogger named Eskinder Nega who was sentenced to eighteen years in prison simply for advocating more democracy in Ethiopia, for writing about the Arab Democratic Spring.

This kind of democratic activism is what you need to make government leaders benevolent. If you think of our own Chris Christie scandal on the bridge - that’s the sign of democracy working, that we keep Chris Christie from doing something bad. He’ll never do it again. No other governor will ever do it again.

[audio mp3="http://www.nyudri.org/wp-content/uploads/2014/02/piece2.mp3"][/audio]

John Hockenberry (host): Can’t you make an argument that you want to be separate from politics?  The United Nations and many NGOs try to stay out. For instance, CARE and the Red Cross are completely independent from politics. [They] go into Ethiopia regardless of what the government is doing and get access because of their objectivity, or their detachment from politics.

Bill Easterly: That’s the perpetual temptation in poverty reduction: to think you can do something that’s technically pure that’s free from politics. Unfortunately that’s a delusion. Let me give you one example of that. Famine relief you might think is as a-political it can get. But unfortunately to go back to Ethiopia, the same government Gates was praising was caught red-handed using famine relief to only give it to the supporters of the ruling party. They denied it to the opposition party members. They were starving the opposition - in the middle of a famine they were rewarding their own supporters and staying in power by that means.

Listen to the full program at The Takeaway here.

Not Knowing as the Place to Start

By John Schellhase Maurice Lim Miller’s innovative idea was that he didn’t know how to end poverty.

He had worked for years for non-profits in San Francisco. One night the mayor called him at home and invited Miller to his office to pitch whichever program he thought would help most. As he prepared for the meeting, Miller grew anxious. Whatever he and others had been doing wasn’t working: “The very first kids I had trained back in the early 80s,” Miller told NPR about his job skills program for at-risk teenagers, “I saw their kids now showing up for programs.”

Miller thought of his mother, a poor immigrant from Mexico who had found her own way out of poverty. He realized he wanted to put poor people in charge of the money usually spent on anti-poverty professionals.

The resulting Family Independence Initiative has no program. Self-organized groups of families set their own agendas, ranging from debt reduction to improved grades for kids to weight loss to home ownership. Families receive a laptop, a $160/month stipend, and additional funding from FII for every success they can demonstrate based on their own targets.

Though still in its early stages, FII’s outcomes look promising. According to reporting by the families themselves with a follow-up audit by FII, in two years the families earned on average 23 percent more, saved 240 percent more, and increased their home ownership by 17 percent.

This apparent success comes from a hands-off approach from FII’s staff. FII did not organize the groups, lead meetings, or give any direction about what to prioritize. Miller believed that outside direction was likely to undermine true innovation. Staff who couldn’t help themselves from offering advice were actually fired.

As Miller has written, “Trusting low-income families with money and connections, thus giving them control and choice in their lives, is what led to their success.”

What would happen if aid agencies and international NGOs extended the same trust to the families they work with in developing nations? Often, the arrogant assumption in development is that the poor can’t be trusted to know what’s best for themselves and their families. The last half-century of failed development projects, however, suggest that it is truly the rich outsiders who don’t know.

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Further reading about FII and their approach: Get Feedback (pdf) The Uphill Battle to Scale an Innovative Antipoverty Approach (pdf)

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John Schellhase is a Program Assistant at DRI and pursuing an MS in Global Affairs at NYU.

INTERVIEW: Raquel Fernández in Conversation with The Straddler

The Straddler interviews Raquel Fernandez, Professor of Economics and a DRI affiliated faculty member, on culture's impact on economic outcomes:

Economists essentially have a sophisticated lack of understanding of economics, especially macroeconomics. I know it sounds ridiculous. But the reason why I tell people they should study economics is not so they’ll know something at the end—because I don’t think we know much—but because we’re good at thinking. Economics teaches you to think things through. What you see a lot of times in economics is disdain for other's lack of thinking. You have to think about the ramifications of policies in the short run, the medium run, and the long run. Economists think they’re good at doing that, but they’re good at doing that in the sense that they can write down a model that will help them think about it—not in terms of empirically knowing what the answers are. And we have gotten so enamored of thinking things through that the fact that we don’t know anything needs to bother us more. So, yes, it’s true that the average guy on the street doesn’t understand economics, and it’s also true that we don’t understand economics. We just have a more sophisticated lack of understanding than the guy on the street.

Read more on The Straddler.

PODCAST: Professor Easterly talks to EconTalk about Growth and Benevolent Autocrats

William Easterly talks with EconTalk host Russ Roberts about the oft-heard claim that poor countries led by autocrats grow faster than poor countries that are democratic. Drawing on a recent paper, “Benevolent Autocrats,” Easterly argues that while some autocracies do indeed grow very quickly, a much greater number do not. Yet, the idea that the messiness of democracy is inferior to a dictatorship remains seductive. Easterly gives a number of arguments for the perennial appeal of autocracy as a growth strategy. The conversation closes with a discussion of the limitations of our knowledge about growth and where that leaves policymakers. [audio http://files.libertyfund.org/econtalk/y2011/Easterlybenevolent.mp3]

>>Download the podcast (30.0 MB)