What is Urban Resilience? Pt. 2

It has been pointed out to me that my last blog post, ‘What is Urban Resilience?’, spent a great deal of time on the phenomenon of resilience, and little time on what is peculiar to resilience in the urban context, beyond a brief discussion toward the end on taxation of urban industries. This criticism is entirely ‘fair and balanced.’

However bad a communicator I may have been, though, I believe that at the least my ‘Problem 1’ is indeed an issue that has particular pertinence in the urban arena. This is because urban areas exist in the first place at least partly because of the concentration of intermediate goods and services. This concentration is one of the three families of agglomeration economies described by Alfred Marshall, and the only one that the New Economic Geography seeks to model. (The other two are ‘thick’ labor markets and knowledge spillovers.) A large number of intermediate industries by definition imply that any exogenous demand will have greater local knock-on effects — a higher value of a in the Keynesian model. Moreover, it is only with high values of a that the break points and sustain points even (1) emerge as discontinuities (i.e., exhibit radical jumps up or down in output), or (2) separate from each other. Rural economies — at least in the model — are much more likely to exhibit outputs that linearly reflect the exogenous demand; whether that demand is recovering from a low point or coming down from a high point makes no difference.

Regarding ‘Problem 2’ from the past post, there too I would argue that the discussion was more germane to urban economies than rural ones. The third and least easily modeled Marshallian agglomeration economy — that of knowledge spillovers — goes to work in areas of dense social interactions. It might be argued that it is just this sort of networked flow of information, ideas, and experience that allows urban societies to anticipate future market developments and technological innovations, and make adjustments for them. In this view then, it is no accident that urban areas tend to be politically ‘progressive’ while rural ones tend to be ‘conservative.’ Urban economies rely more heavily on public goods (e.g., public spaces in which to share knowledge, IT and transportation infrastructure to convey it, public schools and universities to generate and disseminate it, etc.), which require the ongoing commitments of economic and political institutions with long time horizons — i.e., forward-looking institutions.

So maybe we have an irony: urban economies may be best equipped to anticipate future crises and handle ongoing ones upto an undefined break point. But thereafter, rural economies tend to be less affected, and show greater short-term resilience as the exogenous factors that precipitated crisis creep back above the level that originally triggered collapse in urban areas. At this point, when urban agglomeration economies essentially cease to function and dispersal, not concentration, is the order of the day, rural areas may find themselves relied upon to a far greater extent relative to good times. Rural-urban linkages may become critical to urban industry survival.

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