A-resilient vs B-resilient cities

After reading this article from Mario Polèse, I checked other papers by the urban economist. I was impressed right away.

This paper looks at the issue of resilient cities. He looks at cities which recover from external shocks. He categorises such cities as two types –

  • A- resilience: ability to survive shocks
  • B- resilience: ability to change and grow after shocks

The first A- resilience category examples like Nagasaki, New Orleans etc which have managed to remain on the global map despite big shocks. This is the general case for most cities as cities do not die. 

In second we have cities which change and grow despite shocks and cities like Boston and Chicago are examples of the same. Some cities like Manchester fail to change with times despite having a strong history.

The author stays cities are remarkably resilient and there are no examples in modern times where a city has vanished after an external shock.  Take the case of London. It has survived many crashes and despite that remains the power of UK.

Why are cities resilient?

Their “resilience” is, in sum, a product of geography and history, a fact on the ground that in turn affects the growth potential of other cities. It is difficult to imagine an outside shock that would dislodge Paris, London or New York from their dominant positions within their respective nations.

Cities, certainly major cities, do not close down, die or go bankrupt like firms, once their economic prime is passed. Venice may no longer be a great merchant city, but it has gone on to become something else. Visibly, some part of what is called “resilience” is built-in to cities. Much of it has to do with locational fundamentals, mentioned earlier; but also with  accumulated physical infrastructures – roads, canals, railways, etc. – which add value to a particular location and with the symbolic, historical, and emotional significance that cities acquire over time. As one of the participants of the New Orleans panel noted, the Germans (or the Allies) could have chosen to decommission Berlin following its almost complete destruction in 1945, but they did not (Lang and Danielson, 2006: 249).

And why are some cities B-resilient? He points to examples of Vienna, Venice, Nagasaki etc which were A-resilient and managed to survive the shocks. But they are not as great as they would be before the shock. But some cities like London, Chicago etc have not just faced shocks but grown afterwards. And then it is not just shocks but changing despite the shocks. Some cities like Detroit, Manchester etc did not face a shock but just struggled to change despite being at centre of economic activity at one point of time.  How this happens?

Glaeser (2005) suggests several factors. First, he draws a distinction between, on the one hand, “extractive” economies, where cities arose to exploit a particular resource (be it cotton, coal or something else) and, on the other hand, settlements that arose because people wanted to live there with the goal (ideal) of building a community in tune with their beliefs and values. New England, unlike the Southern States (and unlike, later, the coal and iron-ore based economies of the Midwest) had no major cash crop or resource. From the beginning, the Boston area economy was based on ingenuity and on commerce, not primarily on the exploitation of a nearby resource, fish notwithstanding. Managing a far-flung trading empire and fleets of sailing ships required diversified skills, which set the tone early-on. The early skill-based focus was further reinforced by the work ethic and egalitarian principles of the Calvinist settlers (a remarkably well-educated group, notes Glaeser), who put a high premium on education for all. Harvard College was founded in 1636.

The Boston example illustrates that climate can be overcome; that is good news. On the other hand, the attributes that make Boston attractive are not easy to replicate. b-Resilient cities (“adhesive” might be a more appropriate word) are not created overnight. Boston’s success rests on a legacy of education, skills, and values, whose roots go back decades, even centuries.

He also looks at the case of Montreal which was once a leading centre and then declined and has again managed to grow. hence, the natural resource curse seems to apply to both countries and cities.

What are the barriers to become B-resilient? He again goes back to natural resources debate raised by Glaesar:

Why do such cities find it so difficult to shed their past? One possible answer lies in what my colleagues and I have dubbed the Intrusive Rentier Syndrome (Polèse, 2009; Polèse and Shearmur, 2006), initially formulated to explain the lack of diversification of Canada’s resource-dependant regional economies. The explanation is as much sociological as economic. Every industry or occupation – farming, fishing, mining, steel making, automobile assembly, computer programming, banking, etc. – produces its own culture, work ethic, pattern of industrial relations, and outlook. Some will be more conducive to change than others. Industrial cultures will have little effect on economic performance in cities where no single industry dominates the local landscape. But, where one industry is dominant, its culture will become the local norm with either a positive or a negative effect.

Why intrusive “rentier”? The notion of economic “rent” pertains to income earned for reasons other than greater personal effort or higher productivity. The most common sources of such rents are natural resources. In the late 19th and early 20th centuries, given then-current technologies, the combined presence of coal and iron deposits created a potential economic rent.

We have identified the “rentiers”: large plants and large unions. But, why are they “intrusive”? First, they discourage young workers from looking elsewhere; specifically, from starting up their own business. By the same token, they discourage new manufacturing firms, especially small firms, from locating there. In many cases the legacy is also visual and social. The debris left behind by coal mines and abandoned brown fields hardly make
for attractive urban landscapes…..

Superb stuff.  I have not covered many more areas in this paper. It is full of examples and counterexamples on other issues.

To sum up, what makes for successful cities?

The recipe for successful urban economies is fairly easy to enunciate. A city will grow and prosper if it: a) is home to a highly skilled and educated population; b) is centrally located, at the heart of a rich market, and/or well positioned for trade with expanding markets; c) has a diversified economy with a significant proportion of high-order services, largely untainted by a legacy of Rustbelt-type industries; d) boasts a climate and/or natural setting superior to most other cities in the nation. If a city is fortunate enough to score well on all four, its long-term growth is assured, its “resilience” a foregone conclusion. Within Britain, for example, Greater London would undoubtedly score well on all four, compared to other UK cities. It should thus come as no surprise that wages and income in London have remained systematically – and significantly – above that of other British cities.

He adds that one cannot do much about climate. Cities these days focus on (a) – inviting talent and skill. Centrality remains a key theme within all the 4 parameters. Once you have a city which is central to an economic empire has managed to remain a great city. Though changing with time is as important as there have been cities like Manchester which have declined despite having a glorious past.

What about Indian cities? Examples of Delhi and Mumbai come to mind right away. Both have faced numerous external shocks but have managed to remain. They are examples of A-resilient cities and are trying to become B-resilient. Delhi has managed to improve its infrastructure though many issues remain like women security, power supply (Gurgaon, a part of NCR and a huge business hub does not have 24*7 power), water etc. The urban development policies are all over the place.

Mumbai is struggling big time. It remains the main business hub and financial capital for both historic and geographic reasons. Centrality, fair weather, and diversified economy (finance, television, films, media etc all based in Mumbai) leads to talent and skill coming to the city. But it cannot take these things for granted. It needs to take lessons from New York and Boston to grow and improve the overall  state of infrastructure here. It needs to make come big changes in quick time. But this is highly unlikely given the state of politics. If this persists, it might become Manchester as companies will look for alternative destinations. But given the overall state of affairs in urban development in the country, Mumbai might just remain the best place to work because of TINA factor (there is no alternative)

What about other cities? Kanpur was once called Manchester of east but has declined just like Manchester. It was an industrial hub and a textile cluster like Manchester. But could not change after the decline of textile industry much like Manchester. Kolkata is another prime example of a city declining despite having many advantages. Much like Montreal it declined because of political decisions. It is trying to rise again but there is a long way to go. Hope this happens as India needs many more cities.

Then there are cities like Bangalore and Hyderabad which have risen in recent years. They were capital of their respective states and were always large. But now companies have seen them as an alternative to Mumbai/Delhi. Proper policies can help them grow further. People are surprised to visit the key cities in India for their lack of planning and chaos everywhere. Indian growth is highly dependent on how it manages the urban-rural migration and development of urban landscape.

This blog is also unaware of any decent research on urban economics in India. It is always interesting as cities and urban development tell you a lot about an economy as economic activities happen there. It tells a lot about future of an economy as well. So let me know in case you know of any important papers on Indian urban economics

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4 Responses to “A-resilient vs B-resilient cities”

  1. JabalporeJack Says:

    Interesting exercise but sometimes I wonder what the value of this research is to the consumer. That is, would I pay for this sort of research?

    I also think this is somewhat like the J-curve book (on trajectories followed by countries), an ex-post explanation of history which is neatly packaged in scholastic jargon (“intrusive rentier syndrome”).

    I would be more interested in detailed micro-economic surveys of cities to come up with rankings which can push the policy agenda forward for administrators and governments.

  2. Why is New York America’s largest city? « Mostly Economics Says:

    […] What are the reasons for NY supremacy? Pretty much what Mario Polèse said – Weather, centrality, geography, history and diversified economy. These factors have led to […]

  3. Who stays on Chicago’s lakefront? « Mostly Economics Says:

    […] per Mario Polese, Chicago is a B-resilient city. Meaning, it has not just survived shocks but changed for the […]

  4. jain housing Says:

    jainhousing offers cost effective flats for all the class peoples

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