Urbanization, Agglomeration, and Economic Development in South Africa

This chapter reviews the arguments and evidence for the existence of a positive relationship between urbanization and economic development in South Africa. It identifies the main tenets of agglomeration theory, which stresses the importance of city size, density, and connectivity. These ideas are applied to fundamental features of urban development, namely the triangular relationship between the location of firms, households, and transport systems. The urban premium is strengthened by government investment in urban infrastructure and supportive institutions. Contemporary South African cities are scarred by the disjointed urban structure they inherited, which undermines productivity and inclusion. Government policies towards housing, land, and transport have done little to improve the morphology of cities and harness urbanization for widely shared prosperity.