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Abstract
The aim of this article is to present a critical view of the theoretical toolboxes developed in urban economics to explain urban city size. The article starts with the consideration that, during the 1960s and 1970s, the question of optimal city-size tended to be expressed in a misleading way. The real issue is not an “optimal city size” but an “efficient size”, which depends on the functional characteristics of the city and on the spatial organization within the urban system. Economies of scale exist up to a certain city size. However, urban development generates conditions leading to structural readjustments which lead to new economic advantages. These structural adjustments may be either sectoral transformations towards higher-order functions, or the emergence of external linkages with other cities. The article provides recent empirical evidence of the role played by urban functions and city networking in explaining urban equilibrium size. The empirical analyses reported here witness the importance of the structural adjustment of cities needed to achieve a higher equilibrium size.
Notes
†A first version of the paper as presented at the special session on “Urban Europe” organized within the 51st ERSA Conference, held in Barcelona, 30 August to 2 September 2011.
Alonso (Citation1971) stressed the mistaken tendency of many authors to look for “optimal city size” only by minimizing the location cost function. As he argued, this would be sensible only if output per capita were constant (p. 70).
On this theory, see, among others, van den Berg et al. (Citation1983) and Camagni et al. (Citation1985).
Carlino (Citation1980) provides a criticism of Chinitz’ analysis, and demonstrates on a sample of 65 American towns that economies of scale, both internal and external to the firm, play a role in the definition of urban productivity.
This meant in a conceptual way, rather than chronologically, in that the Christaller model dates before the optimal city size theory (Christaller, Citation1933).
Richardson (Citation1972) has already suggested replacing the concept of optimal city size with an efficient interval of urban size in which urban benefits are greater than location costs.
Camagni (1993) theorized the concept and applied it to urban systems. The same concept has already been applied to many fields, such as the behaviour of the firm, and macroeconomic organizational behaviour. For a review of the concept, see Capello and Rietveld (Citation1998).
See, among others, Chesnais (Citation1988) and Teece (Citation1989).
Parameters and estimations are available from the author upon request.
The trend of our location cost curve differs from the traditional location cost curve of Alonso. Also our more macro type of cost function, where the social cost to the environment and the social disamenities associated with urban size are contained, has an increasing shape, but only from a certain urban size. Before that level, other mechanisms, which are not considered in Alonso's micro-economic type of location cost curve, take place and allow small cities to increase their size without paying in terms of the economic, environmental and social diseases that physical growth may imply.
For the conceptual model, the methodology, the data and the detailed econometric results, see Camagni et al. (Citation2012).
