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The mystery of the lack of a positive relationship between growth and urbanization in sub-Saharan Africa has been raised in a number of studies. A recent paper by Barrios et al. (Journal of Urban Economics 60:357-371, 2006) provides a compelling explanation for why this occurs. Exploiting a new data source, they show how climate change, specifically the reduction in rainfall, has driven people from the increasingly impoverished countryside to the city. They also show that while this is an important factor explaining urbanization in sub-Saharan African countries it does not affect urbanization elsewhere. Their explanation for this important difference is differences in the patterns of rainfall, as well as the composition of soil in most subSaharan countries. In a word, geographical factors have dominated the unusual pattern observed in the world's most rapidly urbanizing continent. In this paper, we extend the work done by Barrios et al. to include more observations and more detailed geographic variables. We first replicate their results and extend the number of observations to more recent periods. Then we consider the effects of a range of specific country geographical characteristics, relying on data developed by other researchers. After discussing our results, we focus on the implications of our findings for policy formulation, particularly for sub-Saharan African countries. The results indicate that geographical circumstances place significantly more important constraints on maximization processes. In other words, urbanization in these countries takes place in a profoundly "second-best" world. We consider what this kind of context implies for the sequencing and implementation of economic reforms which would allow for an urbanization process that would be more conducive to economic growth.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Cities are the engines that drive national economic growth. By clustering complementary economic activities, intellectual and financial capital, and entrepreneurial energy, they raise labour productivity and create the potential for sustainable growth through urbanization as low-productivity rural labourers move to the cities. The backbone of a well-functioning city is its urban infrastructure-the network of roads, distribution of electricity, water supply and waste removal-which allows residents and firms to work productively under high-density conditions. We in India have come to appreciate the critical nature of urban infrastructure. The floods in Mumbai reminded us that even as we frame fundamental economic reforms, the biggest gap in India's infrastructure remains urban infrastructure. The whole world envies the congregation of brilliant, entrepreneurial people in Bangalore, but the city is dying a slow death owing to a congested and dysfunctional infrastructural system. This growing 'urban infrastructure deficit' needs to be corrected as quickly as possible, because growing cities are India's future. From one perspective, the urban infrastructure challenge is a challenge for public finance; in a federal system, it's a challenge also for intergovernmental finance. As this volume makes clear, large sums will be required in all countries to invest adequately in urban infrastructure and to operate and maintain systems once they are built. For some advocates of fiscal federalism, the only solution lies in transferring greater revenue-raising powers to local governments. However, what are needed are reliable revenue streams that can be dedicated to infrastructure support. Much of the financing for electricity distribution, water supply, sanitation and waste removal can

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.