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Urban

The Urban programme studies why some regions, cities and communities prosper, while others do not. It aims to understand how shocks to the national economy spread and the role that housing supply, skills supply and infrastructure play in driving urban growth both in developed and developing countries.

One of the ways to understand inequality between regions and cities is to understand why some are more productive than others.

Understanding the reasons for these differences and helping formulate the appropriate policy responses has been a focus of CEP research for nearly 20 years.

Initially, researchers used "new economic geography" models to understand what caused disparities, focusing on firms and consumers, the role of transport and other costs of doing business at a distance. We used this framework to explain the history of globalisation, the emergence of industrial clusters and the importance of access to markets.

Since patterns of urban growth and decline are profoundly uneven, particularly in the UK, we need to understand what determines them to inform key policies, such as the UK's "Northern Powerhouse" and "levelling-up" agenda. To what extent do different concentrations of high and low skills in an area explain differential city growth? What is the role for population density, roads, railways and various agglomeration "externalities" such as labour pooling, input sharing and knowledge spillovers? And what role do better amenities play in attracting people to move to successful cities?

Understanding the causes of spatial disparities has helped inform key policy debates around reforming the planning system, the way we appraise and evaluate transport investment and the role of industrial policy in helping improve the economic performance of cities. Current research will investigate the stability of cities and their short- and long-term ability to respond to employment and trade shocks such as Brexit and Covid-19.

A further factor in development of successful cities, however, is that as they become successful greater demand for housing, and constraints on its supply, lead to rapidly rising prices and high volatility. This causes problems of affordability, especially for low-income, low-skill households. Here research shows that planning policy often drives up the price of land, and limits supply by making housebuilding uneconomic. While much of our research has focused on the UK and other developed countries, a large body of work has looked at urbanisation in developing countries, where city growth can be the engine of economic growth and poverty reduction when public investment in infrastructure, enterprise investment in productive capital and household investment in housing and human capital are undertaken.


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