Metropolitan Concentration in Developing Countries

We examine the economic, political and cultural determinants of urban concentration in developing countries using a sample of 53 countries. We find that as countries develop, urban concentration, measured as the largest city's share of the population, at first increases and then decreases. We also find that foreign investment influences concentration in a similar way since foreign investors tend to locate in the main city at low levels of development but are willing to locate outside the center in more developed countries. Political and cultural factors such as lack of democracy, government instability and religiously and ethically homogeneous populations all contribute to high levels of urban concentration. For many developing countries these non‐economic factors have led to primate cities whose size far exceeds what would be justified by economic considerations.