From Baghdad to London: Lessons from one thousand years of urbanisation in Europe and the Arab world

Interesting article on “historical urbanization and the difference b/w European and Arabic cities:”:

bq.. _Baghdad was a wonder of the world in the year 800 while London was an economic backwater. By 1800, London was the largest city in the world while Arab cities languished. Recent research attributes this ‘trading places’ to institutional differences: Arab cities were tied to the fate of the state while European cities were independent growth poles._

Why did the Industrial Revolution begin in northwestern Europe? At the turning of the first millennium, Europe was a backward part of the world economy with low levels of urbanisation and income. But between 1000 and 1800, Europe surged from a backwater of the world economy to its most dynamic region. Understanding this development is a major challenge for economists and economic historians.

p. The article talks about trust…

bq. There were striking differences between the two urban systems that reveal interesting insights into the socio-political situation in the two regions. Cities in the Arab world were on average much larger than those in Europe, and the size of the “primate” city – the megapolis such as Baghdad, Damascus, Cairo or Istanbul – was much bigger; a fact that is *indicative of a predatory state and low trade openness.* Europe, on the other hand, developed a very dense urban system, with relatively small principle cities. Big cities in Europe were quite often located near the sea, being able to optimally profit from long-distance trade, whereas the largest cities in the Arab world were almost all inland.

Pakistan is a classic example of a predatory state, with the urban population in large dense clusters, and the capital famously 15 minutes away from the rest of the country, whether by rail, economically or socially.

bq.. The sociologist Max Weber introduced a distinction between ‘consumer cities’ and ‘producer cities’. Using this classification, Arab cities were – much more than their European counterparts – consumer cities.

The classical consumer city is a centre of government and military protection or occupation, which supplies services – administration, protection – in return for taxes, land rent and non-market transactions. Such cities are intimately linked to the state in which they are embedded. The flowering of the state and the expansion of its territory and population tend to produce urban growth, in particular that of the capital city.

p. A lot like Pakistan today.. most of the large Pakistani conglomerates with their finger in every possible pie flourished under heavy government protectionism.

bq. Arab cities at this time were, by contrast, heavily influenced by strong, predatory states that could, and oftentimes did, impose a heavy tax or military burden on the cities in their realms. Under these predatory regimes it was typically only the capital city thrived, with this honour shifting from Baghdad to Damascus, Fez, Cairo and finally to Istanbul.

In Pakistan, it’s only the capital city which really thrives. The cities actually producing goods of economic value get the short end of the stick considering the amount of the tax revenue which gets collected from them and goes off to feed the federal center. Islamabad spends over 10 times per capita on itself than the rest of the country, even cities like Lahore with a much larger population (10 million) have about the same budget as Islamabad!

Islamabad has a official budget of 26 billion rupees this year , for a population of approx 1 million people – which works out to be 26,000 Rs per person.

Karachi has an official budget of 37 billion rupees for 2008, with about 18 million residents – 2,055 rupees per person! Heck, it practically qualifies as a rounding off error in the Islamabad figure! All the other cities of Pakistan range from the Rs. 100 to 5000 per capita range, while Islamabad sucks in all the money, aloof from the rest of the country.

In Karachi’s case it’s particularly galling, as depending on what figure you look at, the city generates anywhere from Rs. 450 billion to 600 billion in revenue! Really puts the development of Pakistan in perspective – where you have a predatory state siphoning off all the money than it’s hard for the rest of the country to develop, outside of the areas favored by the predator.

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