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Urban concentration and sectoral income distribution.


 The tendency of the largest city in many developing countries to grow outsize relative to other urban centers has long been noted. This paper tests the hypothesis that income inequality between rural and urban sectors is a causal factor in both urban concentration and rate of urbanization. 51 less developed countries were examined for the proportion of the urban population concentrated in the largest city; it proves to be significantly related to the urban/rural per capita income ratio, particularly for countries with lower per capita incomes and larger shares of employment in the primary sector. Area is also a significant explanatory variable. Export orientation is not significantly related to urban concentration. The relations between the urban/rural income ratio and the growth rate of gross domestic product proves to be significant only for the high-export subset of less developed countries, whose growth is largely based on external rather than domestic demand. The hypothesis that rural-urban net migration, and thus the rate of urbanization, is increased by sectoral income inequality is supported for the higher-income subset of less developed countries but not for the lower-income subset. There is a significant correlation between urban concentration and relative sector incomes; the greater the inequality, the greater the concentration. As a policy variable, urban concentration is partly the outcome of the location of the seat of government and the size and geographical concentration of government employment. Urban concentration as an autonomous factor implies a large role for those large cities and provides further growth impluse. This is not what is happening or is likely to happen in less developed countries.
