Publication: Agglomeration, Urbanization and Employment Growth in Ghana: Evidence from an Industry-District Panel
Loading...
Files in English
351 downloads
Published
2019-07
ISSN
Date
2019-07-29
Author(s)
Editor(s)
Abstract
In this paper the impact of various agglomerative forces on employment growth in Ghanaian manufacturing is investigated, using data from two firm censuses, as well as population census and trade data. The study is the first to use nationally representative firm data that covers the formal and informal economy to investigate the impact of agglomerative forces on employment growth in an African economy. African economies are rapidly urbanizing, but this has not been accompanied by growth in manufacturing. A lack of agglomeration economies is one possible explanation for slow manufacturing growth and the attendant premature deindustrialization. The paper follows Combes (2000) in examining the importance of agglomeration economies on employment growth in Ghanaian manufacturing, finding that there is no evidence that population density is associated with faster employment growth. Other agglomeration economies do seem to play a role, although not always in the manner anticipated.
Link to Data Set
Citation
“Kerr, Andrew; McDougall, Bruce. 2019. Agglomeration, Urbanization and Employment Growth in Ghana: Evidence from an Industry-District Panel. Policy Research Working Paper;No. 8946. © World Bank. http://hdl.handle.net/10986/32130 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review(Washington, DC: World Bank, 2025-09-10)This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.Publication It’s Not (Just) the Tariffs: Rethinking Non-Tariff Measures in a Fragmented Global Economy(Washington, DC: World Bank, 2025-10-22)As tariffs have declined, non-tariff measures (NTMs) have become central to trade policy, especially in high-income countries and regulated sectors like food and green technologies. Although NTMs may serve legitimate goals, they could also sort countries and firms into or out of markets based on compliance capacity and differences in product mix. Documenting recent advances in the estimation of ad valorem equivalents (AVEs), this paper uncovers new patterns of use and exposure of NTMs. High-income countries rely more heavily on NTMs relative to tariffs, while low- and middle-income countries face steeper AVEs on their exports. Firm-level evidence shows that NTMs disproportionately affect smaller firms, leading to market exit and concentration. Poorly designed NTMs can harm productivity and welfare, while coordinated, capacity-aware use can deliver inclusive outcomes. Policy design, transparency, and diagnostics must evolve to reflect the growing role—and risks—of NTMs in a fragmented global trade landscape.Publication Monitoring Global Aid Flows: A Novel Approach Using Large Language Models(Washington, DC: World Bank, 2025-11-04)Effective monitoring of development aid is the foundation for assessing the alignment of flows with their intended development objectives. Existing reporting systems, such as the Organisation for Economic Co-operation and Development’s Creditor Reporting System, provide standardized classification of aid activities but have limitations when it comes to capturing new areas like climate change, digitalization, and other cross-cutting themes. This paper proposes a bottom-up, unsupervised machine learning framework that leverages textual descriptions of aid projects to generate highly granular activity clusters. Using the 2021 Creditor Reporting System data set of nearly 400,000 records, the model produces 841 clusters, which are then grouped into 80 subsectors. These clusters reveal 36 emerging aid areas not tracked in the current Creditor Reporting System taxonomy, allow unpacking of “multi-sectoral” and “sector not specified” classifications, and enable estimation of flows to new themes, including World Bank Global Challenge Programs, International Development Association–20 Special Themes, and Cross-Cutting Issues. Validation against both Creditor Reporting System benchmarks and International Development Association commitment data demonstrates robustness. This approach illustrates how machine learning and the new advances in large language models can enhance the monitoring of global aid flows and inform future improvements in aid classification and reporting. It offers a useful tool that can support more responsive and evidence-based decision-making, helping to better align resources with evolving development priorities.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication The State of Global Services Trade Policies: Evidence from Recent Data(Washington, DC: World Bank, 2025-10-28)The economic environment for services trade has changed dramatically over the past 15 years, driven by rapid technological progress that has expanded the possibilities for exchanging services. How has trade policy responded to these changes? How do policy stances in a wide range of service sectors compare across economies? With its unprecedented global coverage, the Services Trade Policy Database and the associated Services Trade Restrictions Index, developed jointly by the World Bank and the World Trade Organization, help address these questions. This paper makes three principal contributions. First, it offers an in-depth discussion of the current state of services trade policies and their differences across 134 economies and 34 services subsectors. Second, the paper reveals how recent (2016–22) changes in policy stances have seen progressive liberalization by lower-income economies but stabilization or even slight policy reversals in high-income economies. This dynamic differs fundamentally from the trend that unfolded after the Great Recession over 2008–16. Third, the paper shows the implications of policy changes over the past six years on services trade costs, and it showcases how the Services Trade Policy Database’s regulatory information can inform trade negotiations, regulatory analysis, and policy making. Alongside these contributions, the paper documents updates to the Services Trade Policy Database’s economy and sector coverage and explains the latest methodological improvements made to the World Bank–World Trade Organization Services Trade Restrictions Index.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Spatial Development and Agglomeration Economies in Services--Lessons from India(World Bank, Washington, DC, 2016-06)Although many studies consider the spatial pattern of manufacturing plants in developing countries, the role of services as a driver of urbanization and structural transformation is still not well understood. Using establishment level data from India, this paper helps narrow this gap by comparing and contrasting the spatial development of services with that in manufacturing. The study during the 2001-2010 period suggests that (i) services are more urbanized than manufacturing and are moving toward the urban and, by contrast, the organized manufacturing sector is moving away from urban cores to the rural periphery; (ii) manufacturing and services activities are highly correlated in spatial terms and exhibit a high degree of concentration in just a few states and industries; (iii) manufacturing in urban districts has a stronger tendency to locate closer to larger cities relative to services activity; (iv) infrastructure has a significant effect on manufacturing output, while human capital matters more for services activity; and lastly, (v) technology penetration, measured by the penetration of the Internet, is more strongly associated with services than manufacturing. Similar results hold when growth in activity is measured over the study period rather than levels. Manufacturing and services do not appear to crowd each other out of local areas.Publication Land and Urban Policies for Poverty Reduction : Proceedings of the Third International Urban Research Symposium Held in Brasilia, April 2005, Volume 2(World Bank, Brasilia, 2007)The first paper of this section (Durand-Laserve) documents how increasing pressures on urban land and the 'commodification' of shelter and settlement has increased 'market evictions' of families holding intermediate tide to property, although international declarations and pressures have contributed to reducing 'forced evictions.' The second paper (Mooya and Cloete) uses the tools of the New Institutional Economics to analyze the argument in Hernando DeSoto's path-breaking book, The Mystery of Capital, that full legal tide is the key to turning 'dead capital' in the form of informal property held by many low-income families into an economic asset and to detonating broad-based economic growth. The paper concludes that intermediate forms of tenure can have the virtues of full legal tide if properly constructed, and then examines the case of Namibia in this context. The third paper (Fernandes) documents and assesses the recent efforts of the Brazilian federal Ministry of Cities to develop a comprehensive approach for regularizing title throughout that country. In the fourth paper, Abramo gives a structural and theoretical over-view of informal settlement in Brazil. The fifth paper (Rakodi) looks at traditional land delivery systems in five medium-sized Sub-Saharan African cities, and concludes that policies and programs can build on their strengths.Publication Land and Urban Policies for Poverty Reduction : Proceedings of the Third International Urban Research Symposium Held in Brasilia, April 2005, Volume 1(World Bank, Washington, DC and Institute for Applied Economic Research, Brasilia, 2007)The first paper of this section (Durand-Laserve) documents how increasing pressures on urban land and the 'commodification' of shelter and settlement has increased 'market evictions' of families holding intermediate tide to property, although international declarations and pressures have contributed to reducing 'forced evictions.' The second paper (Mooya and Cloete) uses the tools of the New Institutional Economics to analyze the argument in Hernando DeSoto's path-breaking book, The Mystery of Capital, that full legal tide is the key to turning 'dead capital' in the form of informal property held by many low-income families into an economic asset and to detonating broad-based economic growth. The paper concludes that intermediate forms of tenure can have the virtues of full legal tide if properly constructed, and then examines the case of Namibia in this context. The third paper (Fernandes) documents and assesses the recent efforts of the Brazilian federal Ministry of Cities to develop a comprehensive approach for regularizing title throughout that country. In the fourth paper, Abramo gives a structural and theoretical over-view of informal settlement in Brazil. The fifth paper (Rakodi) looks at traditional land delivery systems in five medium-sized Sub-Saharan African cities, and concludes that policies and programs can build on their strengths.Publication Urbanization and (In)Formalization(World Bank, Washington, DC, 2013-02)Two of the great stylized predictions of development theory, and two of the great expectations of policy makers as indicators of progress in development, are inexorable urbanization and inexorable formalization. Urbanization is indeed happening, beyond the "tipping point" where half the world's population is now urban. However, formalization has slowed down significantly in the past quarter century. Indeed, informality has been increasing. This disconnect raises a number of questions for development analysis and development policy. Is the link between urbanization and formalization more complex than what had been thought? What does this mean for policy? The first core section of this paper asks what exactly is meant by formality and informality. The second core section turns to processes of urbanization and asks how these processes intersect with and interact with the incentives to formalize. The paper examines why cities attract the informal sector and the role that urbanization plays in growth and job creation through both the formal and informal sectors. Cities generate agglomeration benefits in the informal sector, perhaps more so than for the formal sector. The third core section is devoted to policy. At the current conjuncture, agglomeration benefits make a strong case for urbanization as an integral part of development strategy, but concerns about jobless growth and about urban poverty require a focus on the informal sector.Publication Urbanization and (In)Formalization(World Bank, Washington, DC, 2013-11)Inexorable urbanization and formalization have been the expectations in development discourse. Indeed, measures of urbanization and formalization have been provided and used as indicators of development. But while urbanization has proceeded apace in developing countries, formalization has slowed significantly over the past quarter century. These disconnect raises questions for development analysis and development policy. Why did one expect urbanization and formalization to go together in the first place? Is the link between urbanization and formalization more complex than what had once thought? What then explains the recent disconnect between urbanization and formalization? Is formalization a reasonable policy goal? May urbanization policies and formalization policies conflict? If so, what can be done to resolve the conflicts? These are the questions this paper addresses. The paper has three core sections. The first section asks what exactly is meant by formality and informality. The second section turns to urbanization processes and asks how they intersect with and interact with the incentives to formalize. The third section looks at policy. Each view of how urbanization feeds formalization has distinctive policy conclusions.
Users also downloaded
Showing related downloaded files
Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Doing Business 2014 : Understanding Regulations for Small and Medium-Size Enterprises(Washington, DC: World Bank Group, 2013-10-28)Eleventh in a series of annual reports comparing business regulation in 185 economies, Doing Business 2014 measures regulations affecting 11 areas of everyday business activity: Starting a business, Dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting investors, Paying taxes, Trading across borders, Enforcing contracts, Closing a business, Employing workers. The report updates all indicators as of June 1, 2013, ranks economies on their overall “ease of doing business”, and analyzes reforms to business regulation – identifying which economies are strengthening their business environment the most. The Doing Business reports illustrate how reforms in business regulations are being used to analyze economic outcomes for domestic entrepreneurs and for the wider economy. Doing Business is a flagship product by the World Bank and IFC that garners worldwide attention on regulatory barriers to entrepreneurship. More than 60 economies use the Doing Business indicators to shape reform agendas and monitor improvements on the ground. In addition, the Doing Business data has generated over 870 articles in peer-reviewed academic journals since its inception.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication World Development Report 2011(World Bank, 2011)The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.