Political sources of urban concentration in Latin America

Latin American nations are highly urbanised around a small number of megacities that account for the majority of these nations’ productivity and population. Scholars of urban planning and economics argue these cities may be overly large, leading to environmental, transportation and housing issues that depress growth and increase economic inequality. We use fine-grained satellite data from 1992–2018 to document urban concentration in Latin America. We argue political decentralisation creates incentives to distribute urban populations more evenly throughout the territory. Our results demonstrate a strong empirical relationship between political decentralisation and lower urban concentration. We link our findings to literature on economic geography, political institutions and urbanisation, with broader implications for the politics of economic growth.