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Trade and Circuses: Explaining Urban Giants

Alberto F. Ades and Edward L. Glaeser
The Quarterly Journal of Economics
Vol. 110, No. 1 (Feb., 1995), pp. 195-227
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2118515
Page Count: 33
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Trade and Circuses: Explaining Urban Giants
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Abstract

Using theory, case studies, and cross-country evidence, we investigate the factors behind the concentration of a nation's urban population in a single city. High tariffs, high costs of internal trade, and low levels of international trade increase the degree of concentration. Even more clearly, politics (such as the degree of instability) determines urban primacy. Dictatorships have central cities that are, on average, 50 percent larger than their democratic counterparts. Using information about the timing of city growth, and a series of instruments, we conclude that the predominant causality is from political factors to urban concentration, not from concentration to political change.

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