World Development Report 2009

Geography matters for development. Yet economic geography - that is, consideration of the "spatial" aspects that determine economic growth and the welfare of people - is seldomly taken into account in crafting development policy. In low and middle-income countries, as in rich countries, economic activity is increasingly concentrating in certain locations. However, this concentration is accompanied by sizeable—and increasing— disparities in living standards across villages, towns, cities and regions. Paradoxically, in a world which is rapidly globalizing, one of the most important determinants of well-being is still where a person is born: in which country, in what province within the country, and whether in a city or the countryside.
The 2009 World Development Report "Seeing Development in 3D" will argue that the concentration of economic activity is inevitable and even desirable for economic growth and the reduction of poverty. However, the large disparities in welfare levels between locations that often accompany this concentration are neither desirable nor inevitable. Motivated by the small differences in welfare observed in high-income countries despite the greater concentration of economic activity in these countries, the report examines whether convergence in the welfare of people across locations is a natural outcome of development, or whether there are policies governments can put in place to accelerate welfare convergence as economic activity concentrates.