Source: TW
The infrastructure woes of Bengaluru & mega cities point to an important issue: cost of urban infrastructure goes up as a square of the population and cost per person goes up linearly with population. A lot of the extra GDP enabled by cities is consumed by infrastructure. This is why cities like Hong Kong have very high GDP per capita but average incomes and consumer living standards are not as high as the GDP would suggest.
China has built massive urban infrastructure & funded it by suppressing wages for her workers. Do we want that in India? On the other hand, it is fairly cheap on a per person basis to provision adequate infrastructure in smaller towns and villages. Developing a lot of smaller towns is a lot cheaper & allows citizens to enjoy higher real incomes/lower taxes compared to mega cities. 🙏
Bengaluru, Mumbai, Chennai etc are all much bigger in population than cities like Hong Kong or Singapore and are more populous than Israel, Finland, Estonia etc. That makes managing them much harder even in an ideal corruption free world. Simply the consequence of extreme size.
Source: TW
Actually, this is not true and a widely held misperception. The cost of infrastructure per capita drops sharply with concentration. Bengaluru certainly needs infra investment, but cheaper to fix it than a dispersed rural area.
- Sanjeev Sanyal
Thank you for starting this debate Sanyal-ji. Let me present some evidence to show per capita infrastructure costs go up with population as we get to larger cities.
Tokyo is the largest metro region in the world (population of 36+ million) and I will start with that. Tokyo is the world’s most expensive place to build in terms of cost per square meter. We can convert that to cost per person as well and that is my first piece of evidence that per capita costs rise with population as cities get large.
Tokyo Is The World’s Most Expensive City For Construction [Infographic] In the run-up to a unique Olympic Games once again marred by dramatic cost overruns, Tokyo was named the world’s most expensive city for construction. Forbes
Second piece of evidence is to look at median rent as a percentage of median income. As cities get large, rents not only go up they also consume a higher proportion of the incomed earned in the city which implies more of GDP is consumed by infrastructure.
- Here is a list of best cities in the US for having the lowest rent to income ratios. The list is dominated by small cities with population about 100K which seems the optimal size for this metric. I have long used 100K population as the ideal city size.
- Here is a list of major urban areas in the US with the highest median rent to median income ratios. All the big cities are well represented here with New York, the densest city, costing 80% or median income as median rent! See the bottom table in page.
The metric median rent to median income also should be normalized by rent per square foot and that will show even more dramatically that bigger the city the higher the rent per square foot, which means people get to live in tiny homes while spending a big part of their income.
My ideal city size weighs in about 100K people and at that size the cost of infrastructure per person are probably the lowest which shows up in their low rent to income ratio.
Why do cities get more expensive per person as they grow bigger? I can think of some explanations.
- Population density shows up in competition for land and with land supply limited in large cities, prices go sky high. That influences every other cost and high cost of living means both higher wages and more of those wages consumed by rent.
- Second, coordination costs go up. Dense large cities have a lot of stakeholders that need to weigh in for any infrastructure project and those coordination costs go up dramatically with population density.
- Third, high population metros require very high infrastructure cost transport options. Tokyo metro is an engineering marvel with some stations that have 6 layers below ground & each underground layer likely adding cost exponentially!
@sanjeevsanyal -ji I rest my case to support the argument that per capita infrastructure costs go up with high population.