Transition report 2023-24

Aljaž Peteh Aktualno

“Rome wasn’t built in a day

Housing is highly path-dependent. Once established, cities are rarely abandoned; urban systems and city rankings are relatively stable over time; and local economic specialisations and regional political traditions often span centuries.

Housing is deeply embedded in infrastructure systems, from road networks to utilities. Large-scale infrastructure projects take years – decades, even – to complete; and once in place, that infrastructure depreciates slowly. Historical buildings, bridges and sewer systems and the layout of road networks are often testimonials to the distant past. When cities were first established, their locations were often dictated by natural advantages such as access to ports and rivers. However, those cities remain important today, despite their respective advantages no longer being as relevant as they once were.

Eastern parts of many former industrial cities (such as London and New York) are more deprived, as those with means escaped pollution from industrial chimneys. These spatial patterns of wealth and poverty persist, even though the pollution that helped to shape them has largely waned. While the spatial distribution of pollution is a result of interaction between industrial locations, wind patterns and city-specific topography, the correlation is robust to the addition of a large set of controls, such as access to public amenities and the distance to waterways.

Historical place-based R&D policies also have lasting effects: even in present day Russia, Science Cities (which were created in Soviet times) are more innovative and productive, and are home to more highly skilled and betterpaid workers, than localities that were similar to them at the time of their establishment. In addition to physical remnants, historical institutions (such as urbanisation regulations, zoning laws or policies affecting the provision of public goods) can also have long-lasting effects on cityscapes.

In many economies in the EBRD regions, secondary cities continue to play a more important role than in other economies, largely reflecting policy choices during central planning – building towns around large state-owned enterprises, in some cases specifically with a view to avoiding the front lines of the Second World War, without due regard for transport costs or environmental considerations.

For additional information click here to read the full article.