by: Mila Freire, Mario Polese
Connecting Cities with Macro-economic Concerns examines the
influence of local public services on the economics of cities. The
relationship between economic development and urbanization is
indisputable; less clear, however, are the ways in which cities
directly contribute to economic growth and employment creation. Current
economic thinking holds that the ability of cities to create wealth
depends on 'agglomeration economies.' This refers to the
geographic concentration of industries and people which enables
economic actors to come together, interact, and become productive.
However, this ability to promote productive interaction depends on
several factors, one of which is the provision of local public
The book argues that the quality of local services significantly
influences the productivity of a city, and of its business firms.
Inferior local services increase the cost of interaction, erode the
effects of agglomeration, and diminish wealth-creation potential. This
study attempts to assess the costs of inferior local public services to
firms. Based on surveys conducted in five cities - Belo Horizonte
(Brazil), Montreal (Canada), Puebla (Mexico), San Jose (Costa Rica),
and San Salvador (El Salvador) - it examines the complex issues
surrounding local service provision, and illustrates how inferior local
services affect firms and, in turn, the ability of firms to contribute
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