Last year, I poked around developing-country urbanization rates. The starting point is that in 2000-20, India grew from 28% urban to 35% urban. This is an anemic growth rate: it’s lower in absolute numbers than in the United States, which took not 20 years to grow at this rate but 10, from 1880 to 1890. And this is especially offensive in the context of a high-growth developing country – India has high economic growth, and by one measure in the 19 years before corona went from the GDP per capita the US had in 1847 to that the US had in 1899. In 19 years, it caught up with 52 years of US growth, but not quite 10 years of US urbanization. Why?
Is it unavoidable in developing countries?
No. Urbanization rates in East Asia were healthy during its period of catchup growth, which is still to a large extent happening in China. South Korea and China both took seven years to grow from 28% urban to 35%.
There’s been a lot of historical rewriting in the last 10 or so years, treating East Asia as always having been developed or at least having had the state capacity to grow, in contrast with laggards elsewhere in the world. This is often bundled with racism positing East Asians as a peer master race to white people, contrasted with Southeast Asia (for example, in Garett Jones), South Asia, and of course Africa. But in the last third of the 20th century, people commenting on East Asian growth did not distinguish East and Southeast Asia, and until the 1997 financial crisis, anti-communist autocracies Indonesia and the Philippines weren’t obviously different from South Korea and Taiwan; the divergence has been mostly in the last 25 years.
In urbanization, at any rate, Southeast Asia has been mostly showing rapid historic growth as well. Indonesia took the same 7 years as South Korea and China to grow from 28% to 35% urban, and its urbanization rate has grown from 42% to 57% since 2000. This is slower than China (36-61%), but in the context of weaker post-1997 growth, it’s moderate growth and moderate urbanization, rather than growth without urbanization as in India. Vietnam has fast growth and fast urbanization – 24-38% over the same period that India grew 28-35%, with similar per capita income trajectory as India. Thailand has exploded from 31% to 52% since 2000.
In Indian discourse, a growing comparison case is Bangladesh. It’s right nearby, it’s famous for being extremely poor, and in reality it’s barely any poorer than India. Moreover, it has the relatively unregulated labor-intensive manufacturing growth that Indian neoliberals wish India had, and less strict urban zoning restrictions. Well, Bangladesh has grown from 24% urban in 2000 to 39% last year, with exactly the same GDP per capita growth as India – 4.7%/year from 2000 to 2021 vs. 4.6% in India, albeit with India suffering a setback during corona and better-masked Bangladesh maintaining positive growth in 2020.
Is it unique to India?
Not exactly. The thread linked in the lede brings examples from all over Asia and Africa; Pakistan has even slower urbanization than India, albeit in a context of weak income growth. Africa is hard to compare with India because it has both low economic growth for how poor it is and slow urbanization, and its faster-growing states don’t necessarily urbanize fast, for example Sudan. The African country most discussed as a growth case in neoliberal English-language media, Ghana, has had a decent pace of urbanization – 44-58% since 2000 – but the accolades one sees to it must be viewed as drawing a target around where the arrow landed. To round up the English-speaking African states, Nigeria and Tanzania have had fairly healthy urbanization growth as well, but Kenya and Uganda have not.
So it’s not exactly just an Indian problem. But it’s a problem that does appear worse in India (and perhaps Pakistan) than in other developing countries, especially in contrast with India’s truly fast pace of income growth.
One answer is strict zoning. The density in Indian cities is very high (due to overcrowding), but it’s still lower than in the most direct comparison case, Dhaka.
But this is not a satisfying answer, and I worry that Indian urbanists overfocus on the maximum floor area ratio. Anup Malani, a Chicago law professor with economics background, tweeted a graphic summarizing the maximum floor area ratios (FARs)/floor space indices (FSIs) in various cities, showing how much Indian cities fall short. I picked this example because I saw it a week ago but it’s typical of Indian urbanist discourse to say something like “Mumbai permits a maximum FSI of about 4, New York permits 12.” But this is not quite accurate – Indian urban FSI limits tend to apply citywide, or at least in very large swaths of the city, whereas North American FARs apply at the level of the individual block; little of New York permits residential FAR 12, largely just the avenues and two-way streets on the Upper East and West Sides, and the vast majority of residential land permits FAR 1.5-3.
In this way, Indian zoning is more like traditional European zoning, which assumes high uniform density, with FARs of about 2.5-3.5 in the larger cities. It’s not quite the same because Parisian zoning prefers regulating height to regulating FAR, and Indian urban housing in the recently-built formal sector is much more likely to be tall-and-thin (as in, say, Vancouver) than mid-rise-and-thick as in Europe, but in terms of the pattern of density, India unwittingly tries to be Europe.
What’s true is that housing construction rates in India are lagging. A report by Knight Frank looked at new housing completions (“launches”) in the eight largest cities in 2018 and 2019. Relative to 2011 census population, in 2019, housing construction per 1,000 people reached 6.4 units in Mumbai, 8.9 in Pune, 4 in Bangalore, 1.4 in Delhi, 2 in Hyderabad, 1.6 in Chennai, 1.4 in Ahmedabad, and 1.3 in Kolkata. Maharashtra liberalized its zoning in the late 2010s, boosting Mumbai FSI from 1.33 to about 4, and this might be why Mumbai’s housing growth rate was not so bad (that is, it’s about comparable with that of Ile-de-France or Stockholm County and still lags Seoul and Tokyo), but elsewhere growth rates are extremely low. Government-funded housing heavily favors rural areas even more than their share of the population, but Mumbai rents are such that privately-funded housing should be viable at much higher rates than 80,000 units a year (in a city of 12.5 million).