In his foreword for the World Development Report 2009, World Bank president Robert B Zoellick notes that world economic activity is highly uneven -- half of the world’s production fits within 1.5% of its land area. Should there be a deliberate effort to spread out economic activities for the sake of equality? “Dispersing production more broadly does not necessarily foster prosperity,” states Zoellick.
Such high level of concentration occurs within countries. For example, Cairo accounts for only 0.5% of the land area of Egypt but produces more than half its GDP. In Brazil, the three South-Central states make up 15% of the country’s land but hold more than half of its population. If you add all the people in North America, European Union and Japan, it comes to fewer than 1 billion, less than 20% of the world’s population, but these countries produce more than three-quarters of the world’s wealth.
The World Bank report suggests that the common assumption of diseconomies of scale in large cities is overdone. On the contrary, economies of scale prevail and account for much of the advancement throughout the world.
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