Managing Decline:Shrinking cities in ECA

World Bank Group Urbanization and Spatial Development of Countries, Research Workshop

July 2015

Paula Restrepo Cadavid (Urban Economist)Soraya Goga (Lead Urban Specialist)Luis Eduardo Quintero (Economist)Sofia Zhukova (Operations Officer)Benjamin Steward (Spatial and GIS Specialist)Katie L. McWilliams (Spatial and GIS Specialist)

+ Mark Roberts (Advisor)+ Country Economists / Country Office Staff (Support)

Team

1. Justification2. Research Questions - Methodology3. Preliminary Results4. Challenges

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Azerbaijan

Kyrgyz Republic

Turkey

Europe & Central Asia(developing only)

Romania

Russian Federation

Ukraine

Important population decline (National Level)

Relevant to ECA because of…

+ Specific context: Soviet/communist legacy+ Population decline can have important consequences: city finances, O&M infrastructure, economies of scale..+ Poverty consequences (?): who is left behind? (Poor/Rich, Young/Old)+ Most studies have been done in US + Western Europe + Many focus on specific case studies (Detroit)+ (WB) how to work in shrinking areas?

In addition…

1. Justification2. Research Questions - Methodology3. Preliminary Results4. Challenges

Global Spatial Development of Cities WB Program:

”Building integrated data sets on urbanization and spatial evolution of cities”

What is the scale of urban decline in ECA countries? PHASE 1

Urban System, Growth/Decline, Regional trends in urban decline

How can countries/cities better manage decline?

PHASE 2What are the policy options? What others are doing & what lessons can be learned?

ECA: Managing Urban Decline

CITY

Economic

SpatialDemographic

Census, other oficial data

GDP at regional level+ NL at city level

Night LightsGHSL (To be developed)

VERY IMPERFECT DATA!!!

Methodology: three dimensions

Approach tested in the Ukraine Urbanization Review

And extended to 6 pilot countries…

1. Justification2. Research Questions - Methodology3. Preliminary Results4. Challenges

Country PeriodTotal Population Change (implied

annual)

Urban Population Change (implied

annual)

Percentage of population in cities losing population

(in last year of period)

Percentage of cities losing population

Percentage of cities losing

population (>30 K)

Bulgaria1989-2001 -1.00% -0.77% - - -

2001-2013 -0.58% -0.56% 68.19% 93.56% 92.59%

Ukraine1989-2001 -0.46% -0.45% 83.55% 80.13% 83.66%

2001-2013 -0.57% -0.27% 75.67% 82.31% 84.97%

Belarus1989-1999 -0.13% 0.48% 26.52% 21.10% 22.58%

1999-2015 -0.58% 0.43% 26.56% 64.40% 48.39%

Albania1989-2001 -0.52% 2.10% 11.34% 17.39% 6.67%

2001-2011 -0.52% 1.84% 40.76% 56.52% 46.67%

Georgia1989-2002 -0.76% -1.37% 96.46% 94.44% 88.88%

2002-2014 0.23% 0.45% 6.92% 31.48% 0%

Kyrgyz1989-1999 1.17% 0.99% 16.94% 66.67% 33.33%

1999-2013 1.40% 1.49% 7.75% 23.81% 22.22%

Turkey1989-2000 1.76% 2.90% - - -

2000-2012 1.59% 2.66% 7.28% 17.11% 7.25%

Demographic: different scale of urban decline accross countries

VERY PRELIMINARY RESULTS DO NOT DISTRIBUTE

We found countries in which most cities are shrinking; few agglomerations growing (largest)

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Small Town(<10k)

Mid sizetowns (10k

- 20k)

Large towns(20k - 50k)

Small cities(50k - 100k)

Mid sizecities (100k

- 500k)

Major cities(> 500k)

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Bulgaria

growth 2001-2013

While in others the situation is less drastic…

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Mid sizetowns (10k -

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Large towns(20k - 50k)

Small cities(50k - 100k)

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Major cities(> 500k)

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Kyrgyz Republic

growth 1999-2013

80 percent of cities in Ukraine are shrinking!!!

Regional variation in urban demographics (Ukraine)

Economic dimension: As Economic data at city level is scarce… we use NLs as a proxy for economic activity

We tested this relationship using regional GDP + NLs data…

Found that in 6 of the 7 countries NLs are significantly and highly correlated with GDP

(1) (2) (3) (4) (5) (6) (7)

VARIABLES Albania Belarus Bulgaria Georgia Kyrgyz Turkey Ukraine

Log NL 1.04*** -0.12 1.26*** 0.79*** 0.81*** 1.41*** 0.82***

(0.07) (0.11) (0.08) (0.11) (0.07) (0.10) (0.05)

Constant 1.57** 11.53*** -6.12*** -0.21 1.42* 0.39 -0.28

(0.65) (1.34) (0.75) (0.96) (0.77) (1.19) (0.59)

Observations 120 35 308 49 35 182 135

R-squared 0.77 0.05 0.62 0.45 0.62 0.54 0.47

Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

NUTS3 data are used except for Georgia, Turkey, and Belarus.

Use NLs intensity to identify economic trendsaccross the territory

Spatial dimension: NLs urban footprint trends

Based on Spatial & Econ dimension, create typology:

Thriving core,expanding area

Dimming core,expanding area

Thriving core,shrinkingarea

Dimming core,shrinkingarea

These are the results for Ukraine;

Expanding Footprint &dimming core(16 percent)

Dimming core & shrinking in footprint(48 percent)

Thriving core & expanding in footprint(35 percent)

Same for another country (Bulgaria)

We add the demographic dimension (Spatial vs. Demo)

Ukraine 1996-2010

Declining all aspects (Green):Econ, Demo, Spatial

Sprawled decline (Black):Econ, Demo decline,

Growing Spatially

We add the demographic dimension (Econ vs. Demo)

Thriving decline (blue & red): Population decline but Growing light intensity (core)

Preliminary conclusions

[Preliminary results – Work in Progress]

(1) Heterogenity between countries: some experiencing an importantdemographic decline affecting a large proportion of urbanpopulation and cities (Ukraine & Bulgaria), others much lower(Kyrgyz, Georgia)

(2) Heterogeneity in spatial, economic and demographic patternsaccross countries

(3) Hypothesis: Different types of shrinking cities (Sprawl, absolute, thriving…): shrinking not necesary bad – towards a new equilibria?

23.81% 56.52% 64.4%31.48% 93.56%82.31%17.11%

1. Justification2. Research – Questions Methodology3. Preliminary Results4. Challenges

Challenges

• Differences in defining cities, changes in admin boundaries over time (Turkey)

• NLs specific

– Small cities: few observations (Urban threshold) - Georgia

– Regional variation of light elasticity (Ukraine), what are theconsequences?

– Debate of using NLs as proxy for economic activity (going down to citylevel)

Next steps: robustness (urban threshold, typologies) + GHSL + roll out for theremaining ECA countries

Thank you very much!