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Three key factors for boosting the productivity of Latin American and Caribbean cities

BY EDE IJJASZ-VASQUEZ, MARK ROBERTS, MING ZHANG From Blogs.World Bank

With more than 433 million people living in cities, Latin America and the Caribbean is among the most urbanized regions in the world.

Yet, even though Latin American and Caribbean cities show similar levels of productivity as the global average, their productivity lags that of North American and Western European cities.

Closing this gap will help Latin American and Caribbean countries raise their living standards and become wealthier nations.

Our latest report, Raising the Bar for Productive Cities in Latin America and the Caribbean, explores the productivity of Latin American and Caribbean cities and the factors that explain it. Using original empirical research, the report documents the relatively high population density, strong concentration of human capital in the largest cities, and other features of Latin American and Caribbean cities that distinguish them from cities in the rest of the world.

The report also explores how three key factors—urban form, skills, and access to markets—determine productivity in Latin American and Caribbean cities. Although these cities benefit strongly from human capital and skills, they fail to reap the wider benefits of urban agglomeration.

This is, in part, due to an inadequate enabling environment, as well as excessive congestion forces associated with infrastructure deficiencies and a lack of administrative coordination within metropolitan areas.

Further, the poor integration of Latin American and Caribbean cities within countries contributes to large performance differences across cities, and undermines their aggregate contribution to national productivity.

Tackling these problems holds the key to realizing the full potential of Latin American and Caribbean cities as engines of national and regional economic growth.

We invite you to read our report, Raising the Bar for Productive Cities in Latin America and the Caribbean, share it on social media, and let us know your thoughts in the comments section.

For more on this story and video go to: https://blogs.worldbank.org/latinamerica/three-key-factors-boosting-productivity-latin-american-and-caribbean-cities

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