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OntheUrbanAgglomerationandEconomicEfficiency

Author(s):KoichiMera

Source:EconomicDevelopmentandCulturalChange,Vol.21,No.2(Jan.,1973),pp.309-324

Publishedby:TheUniversityofChicagoPress

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OntheUrbanAgglomerationand

EconomicEfficiency*

KoichiMera

InternationalDevelopmentCenterofJapan

Introduction

Itisoftenarguedthattodayslargemetropolitanareashaveexceededthe

optimalsizeand,therefore,developmenteffortsshouldbedirected

towardsmallerurbancenters.1Thisargumentisfrequentlybasedonthe

propositionthattheeconomicreturnfrominvestment,eitherprivate,

public,orboth,inlargemetropolitanareasislessthanthatinmedium-

andsmall-sizeurbancenters.Thepurposesofthispaperare(1)todemon-

stratethatthispropositioncannotbesupportedbyanyavailableempirical

analysisandthat,intermsofeconomicefficiency,eventhelargestmetro-

politanareaintheworldislikelytobelessthantheoptimalsize;and

(2)topointoutthatthereisale