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Cities in Transition

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Abstract

This paper looks at the urban development of transition countries in 1991–2010, primarily focusing on the last decade. Cities in transition face a unique set of challenges that came forth due to interplay of the legacy of socialist urban policies and the transition to the market economy. The socialist urban policies restrained growth of the largest cities and distorted the spatial equilibrium towards more uniform distribution of urban population. The transition to the market economy reduces distortions, but the convergence is slow. Housing market rigidities, inadequate urban infrastructure, and inconsistent government policies prevent people from moving to the largest cities.

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Notes

  1. See for example Alexeev (1988), Clayton and Richardson (1989), Bertaud and Renaud (1997), Buckley and Gurenko (1998), Gang and Stuart (1999), Buckley and Mini (2000).

  2. The survey has been conducted by the European Bank of Reconstruction and Development (EBRD). The report and data are available from http://www.ebrd.com/pages/research.shtml.

  3. While it is not possible to compare directly the degree of urbanization for some countries that no longer exist, such as Czechoslovakia, the Soviet Union, and Yugoslavia, the table reports the population weighted averages of actual urbanization, estimated urbanization, and residuals for countries that were former members of the above-mentioned countries.

  4. See for example Acemoglu et al. (2002) for a discussion on links between GDP per capita and urbanization.

  5. Davis and Henderson (2003) also find that the prime cities in the centrally planned economies are under-urbanized by 5% –11% depending on the regression specification.

  6. For Hungary and the Czech Republic the earlier samples are for 1980, for Poland the earlier sample is for 1981.

  7. 2007 data are available at http://world-gazetteer.com. For Georgia, the sample is for 2008. For Moldova, the sample is for 2004. For the Kyrgyz Republic, the sample is for 2009. For Uzbekistan, the sample is for 2006.

  8. A system of cities exhibits multiplicity of equilibria if a shock leads to irreversible changes in location of cities or to changes in distribution of city sizes.

  9. Rural residents did not have passports until 1974 and could not officially migrate to urban areas.

  10. In the estimation of the rank-size regression for 500 Soviet cities, 10 of the 11 largest cities are major outliers – their actual sizes are well below the predicted sizes.

  11. A couple with minor children could have owned only one dwelling, with not more than 60 square metres of living space (Alexeev, 1988).

  12. The LITS II is available online at http://www.ebrd.com/pages/research/economics/data.

  13. I also estimated the model by the ordinary least squares, which does not require the assumption of normality of the error term. The results are similar and available upon request.

  14. Inclusion of the Eastern European regions rises the impact from 4% to 13%.

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Acknowledgements

This research was supported by the Global Development Network (GDN) as part of the intra-regional research project on urban development in transition. I thank Tom Coupe, Randall Filer, Ira Gang, Paul Wachtel, and anonymous referees for excellent comments and suggestions.

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  1. Kyiv School of Economics and Kyiv Economics Institute, Yakira 13, suite 327, Kyiv, 04119, Ukraine

    Oleksandr Shepotylo

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Shepotylo, O. Cities in Transition. Comp Econ Stud 54, 661–688 (2012). https://doi.org/10.1057/ces.2012.21

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