undoubtedly be one of the most important development and demographic issues
of the coming decades. And in urban areas, the growth and development
of the informal sector, as well as its role and limitations for labor absorption
and economic progress, will assume increasing importance.
Before examining conditions in developing-country cities more closely, let
us first consider the potential advantages offered by cities. Urban areas have
played a highly constructive role in the economies of today’s developed countries,
and they offer huge and still largely untapped potential to do the same
for developing countries. A detailed look at the informal sector in developing
cities will give an idea of its potential as an engine of growth. We also consider
in more detail what has been different—and what has gone wrong—with urban
development and the excessively rapid pace of rural-urban migration in
many developing countries. We conclude with a look at constructive policies
to help cities foster successful urban development while at the same time giving
more balanced treatment to development in rural areas.