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Triumph of the City

Page 28

by Edward Glaeser


  But different cities have found different ways to attract talent. In some cases, either raw political power or sensible probusiness policies attract skilled people. Tokyo became one of the largest cities in the world in the seventeenth century when the Tokugawa shogunate made it Japan’s de facto capital. Three hundred years later, it continues to attract that country’s best and brightest. Hong Kong and Singapore have thrived by establishing themselves as bastions of economic freedom and the rule of law in an often disorderly part of the world.

  In other cities, like Boston, a long tradition of higher education continues to bear rewards. In Minneapolis and Atlanta, local universities also serve as anchors for their urban economies. In other areas, skilled people come for the quality of life—the pleasures that define Paris and that a sheikh hopes will boost Dubai. Finally, a city with enough other attractions can, as Chicago has, gain an advantage by lowering barriers to new construction so that it becomes a cheaper place to live than its competition.

  In this chapter, I review the paths that different cities have taken to success. Not only is there no one formula toward urban eminence, but also the sources of success are often highly nation specific. Certainly Detroit could do very well if it—like Tokyo—became the capital of a highly centralized country with an abundance of nationally funded universities, but how exactly can that unsurprising piece of information help Mayor Bing? The Rust Belt can benefit more by a nuanced understanding of the idiosyncratic sources of Tokyo’s or Singapore’s strength, so as to guard against blind imitation and draw the locally appropriate lessons from far-flung urban success stories.

  The Imperial City: Tokyo

  In 1590, the warlord Hideyoshi unified Japan. When he died, his ally Tokugawa Ieyasu replaced him as master of Japan, and his new castle home, Edo, became the country’s effective capital. The powerless emperor continued to live amid the cherry blossoms of Kyoto, but the real business of government went on in the city that came to surround the Tokugawa shoguns.

  The shoguns’ power over Japan was much greater than that wielded by contemporary European monarchs in their own countries. As much as half of Japan’s rice revenue ran through the shoguns’ hands. The more centralized a nation’s government, the larger its capital city, because people are attracted to power as ants are to picnics. Well-functioning democracies manage to provide political rights even to people who live far away from the corridors of power; dictatorships generally do not. As a result, the largest cities in dictatorships, which are almost invariably the capitals, contain, on average, 35 percent of their countries’ urban population. The largest cities in stable democracies contain only about 23 percent of their countries’ urban population. By the end of the eighteenth century, Edo had a million people, making it one of the two or three largest cities in the world.

  The Tokugawa shoguns were ousted in 1868 as the Meiji Restoration reestablished imperial power, but that did little to reduce Edo’s size. The Meiji emperor moved his court from Kyoto to Edo, renaming it Tokyo, or Eastern Capital. The ancient shogun’s castle became the imperial palace, as it remains today. From 1868 onward, Tokyo has been the political center of a successful, politically centralized country, and that ensures the city’s success.

  After the restoration, Japan grew as it opened itself to trade with the West. Even before Meiji, Japan seems to have been well educated, and that helped make its transition to industrialization fast and effective. Since 1945, Japan has been one of the world’s great economic success stories, even when taking into account its “lost decade” of economic stagnation in the 1990s.

  Even in 1960, when Japan was still poor, its people were remarkably well educated. At that time, the average income in Japan was lower than in Argentina or Chile and about half the average income in France. But the average Japanese male had 7.4 years of schooling, substantially more than in France, the Netherlands, or Spain. That education was the springboard for the country’s economic takeoff, and it ensured that Tokyo would be a skilled city. The powerful capital was bound to attract more than its share of Japan’s stars.

  In the 1980s, when Japan seemed endowed with perpetual economic growth, experts attributed its success to any and all of its idiosyncrasies, including the government’s aggressive support for particular companies and entire industries, like electronics and automobiles. Japan’s Ministry of International Trade and Industry (MITI) had long financed and otherwise supported many firms. But despite the fact that MITI employed far more experts than any city or state economic development agency could hope to hire, it usually picked losers rather than winners. Industrial policy is not always a mistake—I’ll discuss Singapore’s success later—but MITI’s failures stand as a warning to urban leaders who want to play venture capitalist. Japan’s economic strength reflects the skill of its workers and entrepreneurs, not the expertise of its government’s economic planners.

  However, the power of the government’s Tokyo-centered bureaucracies helps explain why the nation’s capital became so large. It was useful for firms to be physically close to MITI if they wanted the agency’s support. It’s still valuable to be near the Japanese Diet and the vast bureaucracy. As in other highly centralized nations, like France, the most talented young Japanese often start their careers working for a government agency like MITI, gaining contacts that serve them well throughout their lives. Talent clusters around power, and Tokyo became a vast agglomeration of politics, business, and pleasure.

  Tokyo’s physical structure reflects this reality. At the very center of the city lies the emperor’s palace, which is surrounded by acres of land inaccessible to lesser mortals for all but one day each year. Outside the palace grounds are vast governmental buildings—the brains of the nation’s sizable public sector. The business districts and Tokyo’s urban playgrounds, like the Ginza shopping sector, are a little farther out. The city is Washington and New York rolled into one.

  But Tokyo’s size is manageable, and in many ways it provides a model for many of Asia’s growing megacities. Japan’s bureaucrats may not be able to beat private venture capitalists, but they wisely allowed Tokyo to grow tall, and they built a superb public transit system. The streets are clean and safe. The silk curtain of Japan’s insular culture remains relatively difficult for outsiders to part, which ensures that the city will never rival New York or London as a mecca for worldwide talent, but Japan has an abundance of smart, well-educated people. As long as they keep coming to Tokyo for proximity to each other and the nation’s government, Tokyo will remain one model of a successful city.

  The Well-Managed City: Singapore and Gaborone

  Much of the world suffers under awful governments, and that provides an edge for those cities that are administered well. Some of the most prominent examples of that fact are the former outposts of the British East India Company, Hong Kong and Singapore. While Tokyo grew great because it was the center of a growing country, Hong Kong and Singapore have been successful because they were places apart, politically separate from the large nations next to them. They succeeded by offering businesses a better government than nearby states, with fairly applied rules that favored investment. Their political institutions attracted the human capital that made them great.

  The success of the British East India Company also owed much to its ability to attract and empower talent, like Thomas Stamford Raffles. Raffles was the son of a slave trader who was born at sea off the coast of Jamaica. His father died bankrupt when Raffles was fourteen, and Raffles joined the East India Company as a clerk. Ten years later, he went to Malaysia as assistant secretary to the company’s local governor, and he immersed himself in all things Malay. After helping lead the British conquest of Java during the Napoleonic wars, Raffles was given authority in Indonesia, where he displayed an odd but quintessentially English combination of impressive amateur scholarship, moral mission, and buccaneering ambition.

  Raffles’s History of Java, written in 1817, still reads well. He was passionate about flora and fauna, keepi
ng a sun bear cub as a pet. He later became the first president of the London Zoo. Despite his father’s occupation, Raffles banned trading slaves, as well as opium. Most important, he negotiated the deal that gave his employer the right to build a trading post on an island named Singapore, or Lion City, off the tip of the Malay Peninsula.

  Over the next 140 years, except for its occupation by the Japanese during World War II, Singapore was a shiny sapphire in Great Britain’s crown. The island’s location, in the straits between Malaysia and Sumatra, made it an ideal port at the center of Asia’s sea lanes. That port and the rule of law enforced by England attracted tradesmen of the Chinese diaspora who had fled their own country’s chaos.

  In 1850, China’s Guangdong province exploded in rebellion, and 25 million people may have died in the bloody conflagration that followed. Twelve years later, while the war was still ongoing, Lee Bok Boon left Guangdong for the safety of the British-managed Straits Settlements, which included Singapore. His family prospered, and his great grandson Lee Kuan Yew was educated at Raffles College in Singapore and then Cambridge. When the Japanese occupied Singapore, Lee became a teenage entrepreneur selling tapioca-based glue. After World War II, he worked as a lawyer and became a leader in the fight for independence from Britain. Initially, Singapore separated from England to become part of Malaysia, but in 1965, irreconcilable differences between the puritanical, intellectually ferocious Lee and the pleasure-loving, aristocratic leader of Malaysia led Singapore to become an independent city-state.

  As the island’s first prime minister, Lee faced vast challenges. His 217-square-mile domain had a population of 1.9 million but no natural sources of food or water, and it was surrounded by two hostile giants: Malaysia and Indonesia. If Raffles himself had been betting on the success of the tiny city, he would have demanded long odds. But it turns out that a city on its own without any rural hinterland can not only survive but thrive.

  In 1965, incomes in Singapore were about one fifth of those in the United States. Yet over the next forty years, the city-state’s economy averaged more than 8 percent growth per year, among the highest rates in the world. In the 1960s, Singapore was a poor shantytown where indoor toilets were a rarity. Today, Singapore is a glistening First World city with one of the highest per capita gross domestic products on earth.

  Singapore’s success reflects the remarkable ability of a dense agglomeration of smart people to innovate and thrive when blessed with a remarkably competent public sector. Lee followed an incongruous but extremely successful combination of free-market capitalism and state-led industrialization. He inherited Raffles’s penchant for paternalism, subsidizing savings, fining people for misbehavior like spitting, and heavily taxing alcohol. Singapore is happy to profit by attracting foreign gamblers to a massive new casino complex, but it doesn’t encourage its own citizens to bet. They must pay more than $70 just to enter the casino.

  Singapore—like Japan—invested in education. In 1960, the average adult in Singapore had only three years of schooling, less than the average adult in Lesotho or Paraguay and less than half the Japanese figure. By 1995, Singapore’s thirteen-year-olds led the world in the Test of International Math and Science, and Singapore has routinely been a top performer since then. Those test scores reflect a national commitment to home-grown human capital, but Singapore’s skills also reflect an influx of foreign talent drawn by sensible policies and reliable legal institutions.

  Singapore’s industrial policy seems to have been more successful than that of Japan, probably because Lee Kwan Yew was playing educator more than venture capitalist. By moving his population into garment manufacturing, then electronics, and then biomedical production, Lee pushed them to acquire new skills.

  In places like Ireland and Israel, factions have wasted decades fighting over land. Singapore’s success illustrates the irrelevance of acreage. The city-state grew wealthy not just despite its lack of land, but probably even because it had so little space. Precisely because Singapore had so few natural resources, Lee had to adopt sensible policies that would attract international capital. A large literature now documents the perverse tendency of natural resource windfalls to harm countries by allowing corrupt, inept, or destructive politicians and policies to endure.

  Much of the Third World has long been mired in corruption. Lee understood that First World investors wanted rule of law, not backroom bribery, and he lifted Singapore out of the Third World by giving them just that. Lee protected judicial independence. To keep his bureaucrats honest, he gave them high salaries and even higher penalties for malfeasance. Inspector Clouseau in The Pink Panther implausibly explains his larcenous wife’s expensive furs by saying that she is very frugal with the housekeeping. In Singapore, Madame Clouseau’s spending would be enough to convict the inspector, for an extravagant lifestyle is sufficient to prove a public official’s guilt. “Clubber” Williams, the New York police officer with the yacht and country home, would never have been able to get off by claiming to be a successful speculator in Japanese real estate.

  Singapore’s rule of law has long been complemented by excellent infrastructure, particularly its port. The World Bank rates Singapore as having the world’s best logistics for trade and transport. Good infrastructure and the rule of law helped lure foreigners who brought their skills to the island, and Singapore makes it especially easy for them to come by maintaining a superb airport and national airline.

  Singapore attracts expatriates, in part, with a quality of life that is remarkably high, given its minute land area, absence of natural resources, and sweltering location right on the equator. While New York City could readily import water from upstate via the Croton Aqueduct, Singapore has no hinterland and inherently lacks water. Until recently, it had to import much of its water from Malaysia, but it has overcome this problem by building desalination plants and a $3.65 billion Deep Tunnel Sewerage System, which was named Water Project of the Year in 2009 because of its “contribution to water technology and environmental protection.” The system runs for thirty miles, sixty-six feet or more below ground, removing sewage and then recycling the wastewater.

  You might expect traffic jams in the world’s second most densely populated nation, but Singapore’s streets are fluid because it adopted congestion pricing in 1975. Lee Kwan Yew’s initially simple system has constantly evolved, and today toll-collecting arches electronically charge cars throughout the city. Every car must have a transponder attached to a source of funds, and as a result, driving around this dense Asian city is easy. Buses move quickly on the uncongested roads. For longer distances, the city’s rail network is safe and fast. Commute times run around thirty-five minutes, despite the fact that housing is often far away from the city center.

  Singapore’s streets are safe, clean, and often tree lined. Lee Kwan Yew understood that the Lion City could keep its green space only by building up, and as of 2009, forty-two of its buildings rise above 490 feet, more than triple the number in either London or Paris. Americans visiting Singapore can be forgiven for wistfully wondering why our own cities don’t seem so well managed.

  The success of Botswana’s capital, Gaborone, in southern Africa, is less extreme than Singapore’s, but it may be even more remarkable, given the troubles that have afflicted so many of its neighbors. The two cities have both relied upon rigorous management to rise above the squalor and corruption that typify so many cities in the developing world. When Botswana became independent from Great Britain in 1966, it was one of the poorest places on earth. Over the next thirty-five years, it may have experienced the second-fastest GDP growth of any country, and it is now one of the two or three most prosperous nations in sub-Saharan Africa. Gaborone was founded in 1965, but it now has around two hundred thousand people, about a tenth of the country’s population.

  Botswana’s success rests on good governance and natural resources. The country’s first president, Seretse Khama, who led the country for fourteen years, was a traditional tribal chief and an Ox
ford-trained lawyer. Like Lee Kwan Yew, Khama fought corruption, kept taxes low, and protected property rights. In much of Africa, gifts of nature like Botswana’s diamonds have led to civil war, but Botswana has used its natural resources to fund investments in physical and human capital. Between 1965 and 2000, the average years of schooling in Botswana increased from 1.34 to 5.4 years, which makes it one of the best-educated places in sub-Saharan Africa.

  Gaborone’s growth has paralleled Botswana’s, increasing more than tenfold between 1971 and 2001. Its modest, modernist skyline was built at the country’s edge, next to the railway line that leads to Pretoria. Its public transportation functions well, and it is well linked to the outside world. And Gaborone is home to two of the campuses of the University of Botswana, the country’s primary source of higher education.

  Like much of Africa, Gaborone has suffered terribly from AIDS, but the government’s response to the plague—delivering free antiretroviral drugs to everyone—has been humane and moderately effective, raising the life expectancy substantially for those with HIV. No one is going to confuse Gaborone with Paris, but it is a striking success among African cities, primarily because its government is effective. In the world’s poorest places, success above all reflects decent political institutions and investment in education, and that’s what has made Gaborone a well-functioning city.

 

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