## Tarik Gooptu: Address Global Inequality by Focusing on Cities – IMF Finance & Development Magazine | July 2019

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**Canonical URL:** [Tarik Gooptu: Address Global Inequality by Focusing on Cities – IMF Finance & Development Magazine | July 2019](https://www.imf.org/en/publications/fandd/issues/2019/09/tarik-gooptu-inequality-and-cities)

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## Bibliographic details
- Authors: Tarik Gooptu
- Published: September 1, 2019

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### Overview
- Author and context:
  - Tarik Gooptu is in his second and final year of the master’s of philosophy in economics at the University of Oxford; originally from Washington, DC; bachelor’s degree from the University of Michigan in economics and political science.
  - F&D essay contest runner-up; opinions expressed are those of the author and do not necessarily reflect IMF policy.
  - Date on page: September 2019.
- Central thesis:
  - Tackling within-country inequality requires addressing barriers to upward mobility in cities.
  - Efficiently planning public transportation investments to target metropolitan communities with low connectivity is a crucial step to reducing disparities in upward mobility.
  - Smart urban planning, enabled by public–private partnerships, can convert cities into drivers of global economic convergence in living standards.

### Why focus on cities?
- Key demographic facts:
  - 55 percent of the global population resides in urban areas—an increase from 30 percent in 1950.
  - The global urbanized population is projected to increase to 68 percent by 2050.
- Core arguments:
  - Rapid urbanization and severe intracity inequality make cities the appropriate focus for policies addressing inequality.
  - Existing research shows within-country Gini indexes are highest as population densities increase, and cities tend to disproportionately reward people in the top income percentiles.
  - Cities draw people primarily from the top and bottom of the income distribution, leading to polarization under current global economic restructuring (skill-biased technological change, automation, outsourcing).

### How lack of connectivity drives inequality
- Mechanism:
  - Agglomeration economies provide benefits from proximity (reduced transportation costs) but uneven connectivity within cities prevents all residents from accessing these benefits.
  - Underinvestment in roads, buses, train lines, and subways can cut off districts from jobs, education, and services.
  - Higher mobility costs—longer commute times and lack of affordable transportation—are barriers to upward mobility for lower-income urban residents.
- Policy implication:
  - Local governments and the private sector can collaborate to improve access by building better public-transportation infrastructure targeted to low-connectivity metropolitan communities.

### Misallocation of public resources: Rio de Janeiro case
- Facts and effects:
  - Rio’s bus rapid transit (BRT) system was planned and funded via a public–private partnership and framed as necessary for the 2016 Rio Olympics.
  - Major daily traffic flows run from lower-income neighborhoods (north and west) to downtown Rio (South Zone and part of the North Zone), where 60 percent of Rio’s formal employment is concentrated.
  - The BRT allocated routes to an upper-income residential area instead of improving access from low-income neighborhoods to the city center.
  - The city cut spending on health and police after going over budget on Olympics expenditures, worsening health and safety for the poor.
- Lesson:
  - Misallocation of infrastructure and public resources can perpetuate or worsen intracity inequality when routes and investments do not reflect citizens’ demand for access to jobs and services.

### Successful planning and limits: Curitiba case
- Successes:
  - Curitiba’s BRT planning (Institute for Research and Urban Planning of Curitiba in the 1970s) used a public–private partnership model (Urban Development Agency of Curitiba and private bus companies).
  - Outcomes: a low-cost, fast, and efficient means of transportation, running on green energy, operating successfully for 35 years; integrated transit provided access across the expanding city.
- Limitations:
  - By 2012, Curitiba failed to integrate its growing suburbs into its BRT system, cutting off low-income residents while upper-income residents switched to cars.
- Implication:
  - Policymakers require continual, proactive planning and up-to-date data (including origin–destination surveys) to match infrastructure to evolving population needs.

### Policy recommendations and bottom line
- Targeted actions:
  - Plan public-transportation investments to prioritize metropolitan communities with low connectivity.
  - Use public–private partnerships to fund and operate transit systems, allowing creative approaches to cost burdens.
  - Employ available economic data and origin–destination surveys to identify where populations need connections and what services they demand.
  - Maintain proactive, ongoing integration of expanding suburbs and changing urban patterns into transit planning.
- Multiple benefits:
  - Improving access to public infrastructure allows low-income residents to benefit from agglomeration effects—jobs, schools, hospitals.
  - Well-planned public transportation can lower inequality and help reduce cities’ carbon footprint, addressing both inequality and sustainability as many megacities face heavy pollution.
- Conclusion:
  - Addressing lack of mobility in cities is an efficient way to tackle inequality within countries; with effective planning and partnerships, growing cities can serve as sources of economic convergence rather than divergence.

*Source: Tarik Gooptu, “A focus on cities can improve upward economic mobility,” F&D Magazine, September 2019.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2019/09/tarik-gooptu-inequality-and-cities_