Speculative claims about Australia

by on March 8, 2006 at 6:58 am in Economics | Permalink

Why do some countries keep all their people in a small number of large cities?

A good example of the relationship between climate variability and human population size is provided by Australia.  It is unique among the larger nations in consisting of either very small settlements or large cities, for the middle-sized towns that predominate elsewhere in the world are almost entirely absent.  This is a consequence of the cycle of drought and flood that has characterized the land from first settlement.

Small regional population centers have survived because they can batten down the hatches and endure drought, and large cities have also survived because they are integrated into the global economy.  The resource networks of towns, however, are smaller than the region affected by climate variability, making them vulnerable to swings in income.  Typically, what happens is that, as a drought progresses, the farm machinery dealership and and automotive dealership close down…When the drought finally breaks, these businesses do not return…instead people travel to larger centers to buy what they need, and in time end up moving there.

The Australian example shows that climate variability has in fact encouraged the formation of cities: Today it is the most urbanized nation on Earth. 

That is from Tim Flannery’s The Weather Makers: How Man is Changing the Climate and What It Means for the Earth.  A few passages make me wince, such as the romanticization of 18th century Scottish highlanders, but mostly it is the best popular science book on its topic.

My IRT ("introspective regression techniques") support Flannery’s implicit prediction.  Think about all that empty desert in Saudi Arabia, although I wonder why the rather wet Uppsala is so dull.  Opinions?  Do we see concentrated population in major cities where it is driest and where the weather is most variable?  I don’t recall that Ades and Glaeser mention this factor, but surely it deserves more study.

Peter March 8, 2006 at 9:46 am

Part of the Great Plains in the United States have seen a similar growth pattern in recent decades, with the cities growing even as rural areas and small towns slowly depopulate. It’s quite a strectch, however, to attribute this pattern to climate variability. Changes in farm economics are a more signficiant factor.

rmark March 8, 2006 at 10:25 am

Earlier movement into the Great Plains may also have resulted in
overpopulation, for the farm techniques of the time,
with migration out being a natural result. Rain does not follow the plow.

Anthony March 8, 2006 at 12:09 pm

Jane Jacobs,, in her “Cities and the Wealth of Nations” (which may be her weakest work), explains that in an era of floating currencies, each currency area (country) has a tendency to concentrate into one big city. The reason for this is that currency fluctuations are driven by changing economic fortunes of the manufacturers and other large economic actors in the major cities, and so the cities receive most of the benefit of exchange-rate adjustments, while smaller cities and towns not on the same business cycle get clobbered by exchange rates moving in directions which don’t benefit them. Eventually most large economic actors end up in the big city, and the population follows. Large regional centers become economic “colonies” of the large city, but may remain to service large populations or resource concentrations.

In large countries, this tendency takes a long time, but there is still a tendency towards concentration. In smaller countries, or countries which have other centripital social forces, this can become quite pronounced. In Europe, the economies of London, Paris, and Milan dwarf those of the regional cities, while in Ireland and Greece, the populations of the capital cities’ regions is one-third to one-half the total population of the nation.

Jim Bim March 8, 2006 at 1:57 pm

Horror of suburbia? Please explain this horror. Is it the room to have a house with a yard? (The affordability of that lot?) Is it the accessible shopping to buy the things you need/want?

Patrick March 8, 2006 at 5:06 pm

A significant feature of Australia is that it was settled so recently. Significant areas were first farmed after World War 2.

The path dependence of the settlement pattern is surely significant: Rural areas that first gain significant population during the 1940s and 50s will naturally choose distances appropriate to long distance car and trucks, rather than horses.

Furthermore, Australian rural wage rates have always been near the highest in the world. Far more so than the mexican dominated rural workforce in the USA for example. Hence Australian farming is highly mechanized, with significantly fewer people per hectare.

shawfactor March 8, 2006 at 7:37 pm

You are ignoring the fundamental facts about Australia.
Firstly it was settled relatively recently. Using six good harbours to to settle six colonies.
The original settlements have now gone on to become the six major cities.
Which are still the administrative centres and are slap bang in the middle of the fertile land in each state.

Most land has never been intensively farmed hence has had little need for a major localcentre. There are few middle sized cities in Australia because there never were. The existing largish middle sized cities are all pretty much the result of current or past mineral booms.

Aussie guy from the country

Stephen March 9, 2006 at 5:34 am

There is not much remarkable about Flannery’s comment on Australia’s high level of urbanisation today – it was one of the most urbanised countries a century ago.

While undoubtedly population share has shifted to the cities, Australia was always relatively highly urbanised. In 1911 60% of the population lived in urban areas, today it is 90% urbanised (see ABS Yearbooks).

I do not have long term trends to hand but according to the UNDP, 37% of the world was urban dwelling in 1975 – Australia 86% urbanised, OECD 67% urbanised. In 2003 48% of the world was urbanised – Australia 92%, OECD 76%.

Flannery is also prone to hyperbole – Australia is not the world’s most urbanised nation. Countries as diverse as Iceland, Belgium, Singapore and Uruguay are all more urbanised than Australia, with others like Argentina, Israel and Luxembourg pretty close.

High growth in agricultural and mining productivity mean less demand for labour in rural areas. Aging population (retirement to coastal urban centres), structural change (growth in the services sector as an employer) and improved infrastructure (better roads and vehicles mean rural dwellers can access amenities at larger towns) have also contributed Australia’s trends.

Flannery’s general comment also flies in the face of the fact that mid size Australian towns have shown strong growth rates, especially in coastal areas but also in major inland “sponge cities†.

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