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Where Is the Geography? World Bank's WDR 2009

The World Development Report, a flagship report of the World Bank, is a document written by economists who treat politics as an inconvenient reality, though it is a thoroughly political document. The 2009 edition of the WDR, Reshaping Economic Geography, is critically discussed here, first, from a geographical disciplinary perspective. This article then demonstrates how the report erases politics by drawing on two national experiences, India and China, highlighted in the document as global hotspots of growth. The Report effectively promotes a checkbox style to development, exhorting policymakers to see themselves as managers of "portfolios of places".


Where Is the Geography? World Bank’s WDR 2009

Anant Maringanti, Eric Sheppard, Jun Zhang

The World Development Report, a flagship report of the World Bank, is a document written by economists who treat politics as an inconvenient reality, though it is a thoroughly political document. The 2009 edition of the WDR, Reshaping Economic Geography, is critically discussed here, first, from a geographical disciplinary perspective. This article then demonstrates how the report erases politics by drawing on two national experiences, India and China, highlighted in the document as global hotspots of growth. The Report effectively promotes a checkbox style to development, exhorting policymakers to see themselves as managers of “portfolios of places”.

Anant Maringanti ( is with the Department of Geography, National University of Singapore, Singapore, Eric Sheppard ( is with the Department of Geography, University of Minnesota, Minneapolis, MN, USA and Jun Zhang ( is with the Department of Geography, National University of Singapore, Singapore.

or each of the last 31 years, the World Bank has commissioned a World Development Report (hereafter the Report), which sum up its considered position on a particular developmental theme. Each edition of the Report now takes two years in research and production. It employs hundreds of staff and consultants, and increasingly involves extensive consultations with academics, bureaucrats and representatives of civil society. Although it has no direct bearing on policy, the Report is often cast as a do it yourself (DIY) cookbook for policymakers. To the extent that it signals the World Bank’s public relations and intents, it is a marker of ideological shifts within the multilayered international institution – a sort of weathercock.

Engaging the World Bank’s Reports

To discerning academics, however, the Report is riddled with inconsistencies and omissions.1 Increasingly, it appears that the inconsistencies and omissions in the Report are not incidental but effectively constitute a strategy to draw in academics and practitioners into broadening circles of engagement year after year. Rather than conditionalities atten dant upon structural adjustment loans, it is through knowledge production that the World Bank extends ideological hege mony. Small wonder, then, that the production and dissemination of the Report extends across all spatial scales, from international fora to muni cipal level consultations.

The report is a document written by economists who treat politics as an inconvenient reality, and yet it is a thoroughly political document. In this commentary, we will first engage with World Development Report 2009, entitled Reshaping Economic Geography, from a geographical disciplinary perspective, and then demonstrate how the Report erases politics by drawing on two national experiences, India and China, highlighted in the document as global hotspots of growth.2 The Report effectively promotes a checkbox style to development, exhorting policymakers to see themselves as mana gers of “portfolio[s] of places” (p 199). Our claim is that the Report explains the (temporary) unbalanced growth achieved by some successful countries such as China mainly as a consequence of benign forces of agglomeration, migration, and specialisation, while overlooking the role of “forced” cheap labour and the political processes fuelling it. Such overlooked dri vers of growth legitimise unbalanced growth, while unfairly redistributing the costs of crises to poor and marginalised groups (migrant workers and their places of their origin).

From Flat Earth to Flat Earth

Given that the development problematic has been about geographical inequalities in well-being since its inception, it seems strange that the 31st edition of the Report is the first one to place geography at the centre of multilateral development policymaking. Yet, it is only in the last 15 years that mainstream economics has taken a significant interest in the geography of economic activities – once Paul Krugman adapted some mathematical tools to incorporate space into microeconomic theories of imperfect competition (an achievement recognised with his recent Nobel Prize). Now, geography seems to be all the rage. For the last 10 years, some of the most prominent United States (US) develop ment economists have been debating the role of geography in economic development, also at several meetings convened by the World Bank. The 2009 report is titled Reshaping Economic Geography, whereas the 2010 Report, Development in a Changing Climate, will ask how unexpected physical geographic changes may attenuate development.

The central proposition of the current Report is that spatial economic inequalities are an inescapable feature of economic development, at all geographical scales. Yet, spatial inequality is not necessarily bad; government policy should pay attention to how such geographies can be reshaped to maximise market efficiency and thus economic growth. The Report is


parsed as triads: Three D’s, three I’s, and three scales. The D’s are the “dimensions” of development; the Report’s geographical concepts (density, distance and division).3 The I’s are the policy “instruments” highlighted (institutions, infrastructure and interventions). The three scales are local (metropolitan hinterlands within a country), national, and international (the continents, subdivided into 17 blocs) regions. The report is also divided into three sections (“facts”, “analysis”, “policy”), each with three chapters (one for each D). The first two sections lay out the “stylised facts” and underlying economic principles, by explicating the three D’s; the third section applies the three I’s to each of the three scales. The Report advocates “an I for a D” (p 24): One-dimensional problems (only one D) can be tackled with a single instrument (institutions); two-dimensional problems also require infrastructure; and only the most intractable, three-dimensional, “predicaments” require all three – institutions, infrastructure and interventions.4

Unlike some proponents of untrammelled capitalist globalisation, notably the New York Times columnist Thomas Friedman, the report baldly announces that the world is “not” flat, but it proclaims that that is “okay”. It argues that the concentration of economic activity, into cities, industrial districts, countries and world regions, takes advantage of the efficiency of “scale economies”. It also claims that while this initially triggers increasing income and wealth disparities, between core and peripheral regions, these will dissipate as capitalist economic development proceeds. Insti tutions will treat all places equally; improved infrastructure will reduce geographical economic disadvantage; and people will move from poorer to richer places, enhancing their well-being in the process.

The story of development underwritten by this Report is all too familiar: The narrative offered by the global North to the global South since US economist Walter Rostow published The Stages of Economic Growth: A Non-communist Manifesto in 1960. It views all places as being on the same, teleological, development path; capitalist globalisation, underwritten by free trade and appropriate government actions, will enable less developed countries to catch up with more developed ones. In this view, inhabitants of the poorest countries and regions should not only think of the richest ones as providing an image of their potential nirvana, but also must learn from them about how to achieve this. Over the last 30 years, ans wers to the “how” question have changed dramatically, from stateled development to neoliberal globalisation, and now to re-regulation and intervention. But neither the goalposts for develop ment (high per capita gross domestic product (GDP); long life; democracy; education), nor the places constituted as possessing the expertise about how to get there (mainstream economics departments, Washington, and the international financial institutions), have moved.5

‘Economic Geography’?

The Report elaborates on what it terms the “economic geography” of this narrative: the shifting spatial patterns of production, communication, migration and wealth. Focu sing on the “local” scale, the Report argues for a common development path for sub-national regions as well as nations, and it is urbanisation.6 “Inci pient” urbanisation in the global South should be encouraged by “institutions”, whose spatial neutrality accords each loca tion the same chance for urban growth. Urbanisation should be encouraged in those lucky places where cities do arise, using “infrastructure” to accelerate rural-urban migration. Ruralurban migra tion is argued to both enhance economic growth and reduce rural-urban inequality, enabling cities to take advantage of scale economies, and people to abandon poor rural villages. The large slums that characterise places like Mumbai are problematic, but no more so than were the slums once found in Victorian London. Mumbai is considered to have achieved advanced urbani sation, but plagued also by social and cultural “division”. Thus, sele ctive “intervention” will be necessary to reduce urban poverty and accelerate the moderni sation that eliminated London’s slums. Such policy instruments will enable any third world country to complete its phase of increasing spatial inequality and enter that of decreasing inequality, just like the US and other wealthy countries.

The Report includes extensive empirical documentation based on recently

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published and commissioned academic research, lavishly illustrated with fourcolour maps and graphs that offer compelling visualisations of such trends. Nevertheless, the inspirations for the narrative are long-standing neoclassical theories of regional economic development and Marshallian theories of agglomeration economies, which have been around since the 1950s. These theories treat territories as separate, quasi-autonomous units of ana lysis (cities, regions, countries), hypothesised to be subject to identical “laws of economics”. According to such laws, the economic interactions between places, but for cultural division and government intervention, typically accelerate econo mic convergence (i e, they reduce economic inequality, even as places specialise in different economic activities). Many of the stylised facts motivating the theoretical arguments and policy instruments are derived by graphing trends in the features of a large number of such places against some measure of development, and assuming that this spatial trend can also be interpreted as a historical prediction; along which poor places can move as they become more wealthy, if they successfully implement the policies.

It is noteworthy, however, that this theoretical paradigm (for all its popularity in mainstream economics) has been roundly criticised since the 1960s – criticisms that the Report neglects to investigate or mention. Within economics, powerful theories were developed by giants of post-1945 European economics who questioned this Panglossian narrative. Nobel laureate Gunnar Myrdal’s theory of cumulative causation, and Nicholas Kaldor’s laws of economic growth, offered persuasive arguments as to why regional convergence is unlikely. Kaldor argued that industrialising cities and regions will accelerate ahead of other regions because industrialisation boosts productivity; Myrdal pointed to a host of mechanisms that function as what he dubbed “backwash” – connections between core and peripheral regions, co-evolving with the growth of the former, that undermine economic development possibilities in the latter. Throughout the 1960s and 1970s, economists and sociologists such as Raul Prebisch, Samir

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Amin and Andre Gunder Frank applied such thinking to the international scale by such, crafting dependency and worldsystem theoretic explanations of third world underdevelopment. Yet none of these gets a mention in the Report, except for a footnote acknow ledging Kaldor’s disagreement – and dismissing it because he “failed…to provide the technical solutions” (p 297).

Empirically, the Report overlooks an extensive body of geographical and sociological research since the 1960s, showing that the selective nature of migration – younger and more forward-looking individuals are typically over-represented in migrating populations – implies that places of outmigration tend to lose exactly those energetic individuals who would foster innovation and growth there. A consequence of this is that migration enhances spatial economic inequality.

The best empirical test of the proposition that spatial economic inequality decreases in wealthier countries would be the US: a rich country with relatively unrestricted markets and mobile populations and firms. Yet, there is significant evidence challenging the claim of the Report that the US is experiencing decreasing econo mic inequality. The answer depends on geographic scale – something not systematically discussed in the Report: Generally speaking, the smaller the scale the wider the inequalities. Yamamoto (2008) shows that spatial economic inequalities have widened in the US at more local economic scales during the past few decades. Our own investigations indicate that spatial economic inequalities within US cities are much greater than those between US regions, and are widening. The Report also assumes an initially flat world: that “institutions” can enable any place to prosper at the earliest stages of development, failing to recognise that there are always inherited geographical inequalities.

Influential Area of Scholarship

Within the discipline of geography, economic geography has been one of the most influential areas of scholarship since the discipline took a theoretical turn in the late 1950s. This research – its theories, questions asked, conceptions of the economy, and empirical research – now departs substantially from the economic geography discussed in this report (cf Sheppard and Barnes 2000). First, geographical research has shown that how one theorises space affects explanations of how the economy works. The theory of space utilised by the authors of the Report is a form of methodological territorialism that makes no attempt to draw on geographical theorisations of scales and spatial connectivity.7 It is further assumed that the spatial organisation of activities can be reduced to a set of nested spatial containers (world regions, countries, sub-national metropolitan hinterlands), although it is common knowledge, for example, that “local” economic regions often stretch across national boundaries.

The Report recognises that cities connect into inter-urban networks (of increasingly global scope), but believes that such networks can be managed by drawing a “local” region around them (p 199).

Gaps in Scholarship

Beyond such gaps in its understanding of economics and directly pertinent empirical research, the Report makes no attempt to examine the geographical scholarship on economic geography – restric ting itself to what many now term “geographical economics”. Only six citations are to geography journals, in a 25page bibliography; five are authored by card-carrying economists and the sixth was published 40 years ago. Of the 250 or so individuals thanked for their contributions, comments, guidance and support at the end of the Report from all over the world, two are geographers (as far as we know).8

Second, geographical research, some of it using the same mathematical tools favoured by economists and prioritised in this report, deduces that a spatially extensive capitalist economy engenders, rather than mitigating, social and spatial inequality, and that some standard principles of economic theory (profit maximisation, equilibrium, comparative advantage) do not hold (cf Plummer and Sheppard 2006). One implication of this theorisation is that there is no single best trajectory to “development”, even if we can agree on what that term means. Third, geographical research, drawing on cognate scholarship in environmental science, sociology, political science, anthropology and feminist studies, has demonstrated that nature, culture, identity and politics are bound up with economic processes, implying that theorisation of the economy, and of development, cannot be reduced to or even begin with a purely economic theorisation. Fourth, empirical research has gone beyond the kind of extensive statistical analysis favoured in this report, to deploy the multi-method, intensive case study research designs necessary to sort out cause and effect and the role of geography in economic processes (cf Sayer 2000). Finally, geographers have sought to understand those many economic activities, in diverse places, that cannot be captured by the market exchange model favoured by mainstream economics – and, indeed, that may function very differently from the capitalist logic through which such exchange is theorised. Particularly in the global South, much economic activity is not simply capitalist, and is not necessarily improved by integrating it into markets (cf http://www.communityeconomies. org/; Marglin 2008).

‘Hard Core’ Beliefs

To be clear, more academic scholarship lies behind this document than any 20 major research articles; scholarship that typifies the particular standards of rigour characterising mainstream economics. Yet every community of scholars develops what the Hungarian philosopher of science Imré Lakatos once called “hard core” beliefs – a world view that necessarily results in a selective approach to knowledge production, from which other sources of knowledge seem invisible or problematic – and is subject to blind spots. Perhaps, the lacunae in the Report reflect a blindness to research that does not fit the methodological individualist and rational choice framework of mainstream economics.

But then perhaps something deeper is at work. The Report sets up China as a model that can be emulated by India; a discursive move that obscures facets of develop mental politics in both China


and India. In what follows, we attempt to take issue with that move.

Erased Politics: India and China in the Report

A trip on National Highway 321 east from Chengdu in Sichuan province to Shenzhen in Guangdong is a journey through economic development. Migrating workers who travel these highways often leave their families behind. But they also help their families escape poverty and propel China through the ranks of middle-income countries. As they travel eastward, they leave an agrarian realm in which they receive few benefits from working in proximity to others. Instead, they enter the realm of “agglomeration economies”, in which being near other people produces huge benefits (Report, p 13).

The World Bank lives up to its name through a resolute global gaze that scours the global political map; processing evidence selectively to suit the current thinking in the institution. For example, the World Bank’s 1993 report on the “East Asian Miracle” was an attempt to “assimilate” a stylised account of the State’s role in the experience of the so-called newly industrialising countries (NICs) into the neoliberal world view (Berger and Beeson 1998). In light of increased attention to the failures of, and protests against, structural adjustment, as if recognising that things had moved too far in the anti-state direction, the 1997 Report (The State in a Changing World) turned to Africa to make the case for a greater role for the State. Paradigm maintenance is necessarily a delicate balancing act. Statements, evidence, sometimes entire sections of the Report are at such odds with others that the lay reader is tempted to pick on whichever end of the stick he or she feels sympathetic to, whereas the academic reader is kept busy picking at the contradictions. To illustrate how such seeming inconsistencies and silences can be functional to such a hegemonic project, we re-examine this report’s repeated references to India and China.

During the last decade and a half, China has demonstrated scorching rates of growth, emerging as the “world’s factory”. India, a close competitor in growth rates, has begun to nurse ambitions of taking its share of the global manufacturing currently located in China. Reminiscent of the early 1990s, when “crouching tigers” were the rage, academics and popular commentators alike have had a field day word playing with “dragons” and “elephants”. These commentaries conceal more than they reveal about the state of affairs (or affairs of the state). In the interest of brevity, we restrict ourselves to a few key propositions in the Report regarding China and India, deriving from general principles enunciated in the Report, and functioning to bolster its overall claims. This geographic focus, and our substantive focus on export processing zones, cities land markets and migration, should not be construed as implying that there is little else to the Report. It reflects in part the Report’s stylised account of the Chinese success and in part our own expertise. It enables us to illustrate and give depth to our arguments against the overall approach of the Report.

The Report is enthusiastic about China’s special economic zone (SEZ) strategy as a successful, spatially targeted intervention (see, particularly box 8.10), speaks warmly of the fluidity of Chinese labour markets, and suggests that rural-urban and rural-SEZ migration is a win-win for migrants, places of origin and places of destination. Further it suggests that liberalised land markets and institutionalised private property will catalyse the eradication of slums and urban poverty (see discussion of Shanghai and Mumbai, pp 226-7). In India, by contrast, it highlights two important barriers to labour mobility, and recommends targeted interventions to deal with urban inequalities.

This narrative makes no mention of either the structural conditions under which China and India embraced pro-market reforms or the pathways each traverses. It merely uses the two to illustrate its case for good and bad policymaking. We lay out these structural conditions, which provide a better basis for comparison, since this studied silence shapes how similarities and differences in their trajectories can be read.

It is a common perception among many observers that China embraced neoliberalism through enduring authoritarianism, whereas authoritarian tendencies in India, institutionalised during the internal Emergency in the mid-1970s, have been steadily undermined by coalition politics, the characteristic feature of India’s thriving democracy. Expressed often as a contrast, this framing makes it difficult to tease out considerable

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commonalities. Even along their different developmental trajectories, India and China share many common features in their reform experience; a comparison that yields quite different lessons from those espoused in the Report. In both cases, during the past two decades and a half, the devolution of fiscal responsibility has financia lised highly politicised processes of spatial competition, in which local elites have enhanced their power in cities that are increasingly hostile to rural migrants. This has undermined the ability of rural migrants to claim rights to urban residence, and to decently paid employment, negatively impacting both their well-being and that of the places they have left.

Fiscal Reform in China

The 1994 fiscal reform in China centra lised much of the revenue collection, yet kept expenditure responsibilities decentralised.9 The main sources of revenue remaining under local governments’ command are land leasing and discretionary control over the hukou regime for migration.10 Over the last two decades, market-oriented reforms and economic growth have dramatically intensified faction-based political struggle in the party, enhancing the role of money in political power. At the individual level, party leaders perceive strong incentives to boost short-term local revenues and to produce visible “image projects” such as the development of infrastructure, often at the cost of the weak and marginalised groups. Such projects enable local party leaders to accumulate some “hard evidence” of political performance, enrich themselves, and accumulate funds to bribe higher level leaders and lubricate political ties. Overall, local party-states enjoy firm control over their jurisdiction and compete with each other. But their mandate comes from the central party rather than from the people in their jurisdiction.11 If we recall in this context that the party state in China has generally been biased against the rural over the last three decades, but for episodic interventions to improve living conditions in the rural areas and attempts to integrate rural migrants better into cities, it would appear that pro-market reforms in China have only gone to reinforce that bias.

These tendencies – interregional competition, devolution of fiscal responsibility

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and financialisation of governance and the rise of a new elite from the bureaucratic and political classes are not manifestly diffe rent from the manner in which structures of governance have been reshaped in India. During the late 1960s, municipal govern ments were effectively re-engineered such that executive action, directly accountable to state governments, overrode the elected body. In many instances local elections were simply not held, for several terms. Although state governments became more assertive in their relationship towards the central government during the 1980s, revenue sharing arran gements between states and central govern ments remain heavily biased towards the centre, while the relationship between state governments and municipal bodies is worse. For municipal bodies, the main source of revenue is property tax and an assortment of local taxes. Under such circumstances, financial and political devolution since the 1990s have passed on fiscal responsibility (and vulnerability), first to state governments and then to local bodies, to varying degrees. Further, since 1993, through an initial experimental implementation in select cities under a United States Agency for International Develop ment (USAID)-supported project titled FIRE-D (Financial Insti tutions Reforms Expansion – Debt) followed by system-wide implementation, state and local governments have adopted zero-based budgeting. Under these circumstances, land in India, over which the state has an enormous control, has become commodified. As real estate markets soared, cities have become hostile to permanent migration by workers, while conditions in rural areas have progressively deteriorated as many of the services previously provided by the state were privatised.

Relative Location

While histories of specific policy tools may differ, China and India share a relative location in global markets in which their competitive advantage perforce remains cheap labour and privileged access to land

– whether via state agencies or social power (in many cases, power through capacity for physical violence). Development depends on spatial strategies that keep large numbers of people perennially on the move, and underpaid.

Let us now see how the Report addresses this reality. Shenzhen is featured as the most successful SEZ and city in China.

Propelled by the forces of agglomeration, migration, and specialisation, and helped by its nearness to Hong Kong, China, Shenzhen has grown the fastest of all cities in China since 1979, when it was designated a special economic zone. (p 13).

The Report attributes Shenzhen’s success to residents who are “the best-trained professionals in the country, attracted by high salaries, better housing, and education opportunities for their children” (p 224), going on to stress that it was helped along the way by its proximity to Hong Kong. Such a reading of Shenzhen’s success is consistent with the Report’s general obser vation that “[l]ocation is the key: poor location is the main obstacle to success” (p 254), implying that “spatially directed interventions” must “exploit geographic advantages rather than try to offset them” (p 254).

More Complex Story

However, even a cursory examination of official statistics reveals a different, more complex story. Shenzhen’s 8.77 million permanent residents in 2008 included 2.28 million hukou-residents (26%).12 A census on 15 April 2008, by the Shenzhen Floating Population and Rental Housing Management Office, revealed that Shenzhen had

12.3 million floating population, 11.5 million of whom had stayed over six months, and 88% of whom came to Shenzhen seeking a job. Over 87.5% of these workers are between 16 and 44 years old, with 99.8% lacking profe ssional qualification of any kind. Of the workers, 88.5% agricultural-hukou hol ders; only 1.79% held a bachelor degree or above, and 73.2% held a degree of middle school or below. Conforming to national patterns, only 3% of Shenzhen’s floating population resided in purchased houses, 36% in dorms, and others in rental units. Only 32% were living with family members.

Contrary to the impression created by the Report, Shenzhen’s competitiveness stems largely from this high percentage of floating, temporary population. This workforce is not participating in a liberalised, fluid labour market, but is subject to a cautiously manipulated hukou system that channels temporary migration and maintains a state of “incomplete urbanisation” (Chan 2009). The hukou reforms in China thus, do not signal abolition of restrictions on migration and the emergence of a “fluid” labour market (contra pp 15354 in the Report). Rather, they mainly devolve responsibility for hukou policies to local governments, giving them new tools to keep people from becoming permanent migrants in cities. Such restrictions help keep labour costs low. Even with the recent “labour shortage” before the economic crisis, the estimated average manufacturing wage in China in 2007 was only $0.76/hour, about 3% of the US wage and 25% of Mexico’s (Standard Chartered Bank 2008).

Similarly, Shanghai, praised in the Report for its land market institutions, has in fact been the remarkable leader of what may be called the Chinese “land enclosure” movement. With revenue from land leasing now the single-most important source of local extra-budget revenue, especially fees from commercial and residential land leasing, (e g, Lin and Ho 2005; Yang and Wang 2008), land-related issues arising from state expropriations or acquisitions have become the top cause of rural grievances and protests (Zhu and Prosterman 2007). A large number of farmers, uprooted by such land grabs, have flooded the labour market, further reducing labour’s bargaining power. Low compensation costs enable local governments to offer land to industrial investors (such as General Motors) at extremely low prices, as part of a “race to the bottom” regional competition (Tao and Yang 2008). To make up for reduced transfer fees on industrial land, and to generate extra-budget revenue for their own use, local governments in coastal regions commonly charge very high transfer fees on commercial and residential land tracts. Such practices drive up industrial investment and residential and commercial property prices, further excluding migrant workers and ordinary urbanites from housing ownership in the city where they work.

In short, increased labour mobility in China is due to a system whose fluidity and flexibility is primarily for powerful local politicians and investors. For migrant workers and their places of origin, and for the majority of ordinary urban residents, its inflexibility is a lose-lose situation. This state of


affairs may be represented by the Report as temporary, but this is hardly any consolation for those enduring forced mobi lity and imper manent residence. The economic crisis has triggered the “deportation” of some 20 million migrant workers back to their rural homes, having lost their jobs and without access to their pension contri butions – few qualify for the latter, under the rule that pensions are payable only after 15 years of contributions (Bradsher 2009).

Indian Case

Looking at the Indian case through the same prism of (labour) mobility, loca tional (natural geographic) advantages and agglomeration economies, the Report observes that India has not been as successful as China in locating SEZs strategically (p 254). It notes, however, that many SEZs developed by the private sector are quite successful. The reality, again, is much more complex. India began experimenting with SEZs in the 1970s, when a number of export processing zones (EPZ) were licen sed across the country. While many of these failed to achieve their stated goals, some EPZs did succeed in fuelling growth in such sectors as jewellery and software exports. By 2002-03, over 55% of total Indian jewellery exports originated in these esta blished zones, but there is little evidence that they have contributed in any significant way to surrounding areas. In 2001, the government of India started converting these EPZs into SEZs, the main difference being the far greater number of tax concessions, flexibility in labour control and permitted economic activities in SEZs. Whereas EPZs were more like isolated industrial estates, SEZs are more like whole townships which are to be inte grated with the regional economies in which they are loca ted through infrastructure and employment provision and generally have a regional multiplier effect.

Within short order after the government of India enacted the Special Economic Zones Bill in 2005, literally hundreds of appli cations for SEZ creation were submi tted to the government of India by various state governments, and proceedings for land acquisition began. Some propo sed SEZs were stopped in their tracks by protracted, at times violent, protests (cf For those that did take off, academic researchers, activist groups and think tanks have extensively documented the real estate frenzy that was not only the consequence of the SEZ policy but its source. The locational choices of SEZs in India have been driven by a variety of contingencies and political pro cesses in which ambitious civil servants, revenue officials, local politicians and transnational middlemen played the most prominent roles. These in turn stem from the devolution of fiscal responsibility described above. Hard put to raise revenues, and with land being the main resource available for government agencies to participate in capital markets, state governments had been aggre ssively trying to acquire land from small and marginal farmers under the antiquated Land Acquisition Act of 1894. Faced by angry protests, governments have gradually shifted to a position where it is now argued that SEZ promoters should directly deal with the peasants and offer them market prices for the land.

The implicit suggestion of the Report is that SEZs in India could benefit from spatially targeted interventions to reap the benefits of geographical advantage, as was done in China. However, as demonstrated above, the success of Shenzhen cannot plausibly be explained exclusively in terms of locational strategy. Rather, in China, as in India, designating SEZs to raise placebased competitiveness has been a highly politicised process, in which the interests of local elites typically trump the wellbeing of mobile migrant populations.

‘Barriers to Labour Mobility’

The Report identifies two main realms of policymaking as barriers to labour mobi lity in India (Report: 163): That expli citly seeking to increase rural employment (e g, the National Rural Employment Guarantee Scheme; NREGS), and that which implicitly discourages migration into cities by not atten ding to the needs of migrant workers (through restricting welfare servi ces such as housing and food subsidies to long-term residents). Against this reading, it is worthwhile noting that the census data on ruralurban migration in India reveals a paradoxical situation: although the rate of urbani sation and the absolute numbers of urban populations have increased, the growth rate of urban population in India

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has declined; from 3.9% in the 1970s to 3.1% in the 1980s and 2.7% during the 1990s. Kundu (2003) suggests that this decline may not be due to decreased labour mobility. In subsequent elaborations, Kundu has in fact argued that it is due to the hostility of urban elites to certain types of economic activities and the migrant workers likely to undertake them. This hostility, Kundu argues, arises from the fact that growth in formal employment in India has tended to mainly concentrate in high wage sectors leading to demands for a better quality of life for employees in such sectors. Further, he suggests that in the scramble to become “global centres of the future”, cities are attempting to give the market access to land in preferred sites; simplifying the legal and administrative procedures for changing land use, and displacing “low-value” activities. As a result, low-income and slum areas are effectively being pushed out to the peripheries of the city. The impli cations of the manner in which the Report identifies an “implicit” policy realm that retards mobility ought to be seen against this backdrop. The Report’s view in this regard is in fact, closely related to its oddly circumscribed view of what agglo meration economies can imply for mobile populations. The Report correctly points to the hostility/indifference of local governments to migrant workers (p 163), and rightly argues elsewhere for better property rights and tenurial security for residents, suggesting that property owners have a sense of responsibility and participate in the betterment of commu nity affairs (p 206). Taken together, these can be read as the Report’s concern with tailoring policy to the migrant population’s needs. However, there is no acknow ledgment here of the asymmetric power relations between property-owning and non-property owning populations – that in turn maps onto sedentary and migra tory populations. As demonstrated above, a large percentage of migrant workers are in no position to acquire property or enjoy tenurial security in the cities they have ente red, both because the elites in the cities expect them to return to their places of origin and because urban pro perty is simply too expensive.

Responding to the pincer like situation that rural workers have been facing – degrading conditions in rural areas even as

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cities are increasingly hostile to new migrants – social movement actors across India launched a concerted and coordinated campaign in 2003 which forced the newly elected United Progressive Alliance government in 2004 to introduce the NREGS. This provides 100 days of guaranteed unskilled employment in rural areas, in rural infrastructural works, in any financial year. Media reports since the introduction of the programme indicate that in many areas of the country, the NREGS, described by the Report as retarding labour mobility, has enhanced the confidence of rural workers, who have intensified their demands for higher wages. In failing to reference the politics behind the NREGS, the Report effectively disavows such struggles and their (however limited) success in winning a modicum of rights and thereby a “spatial” advantage for migrant workers. Representations in the Report of this policy and practice as ill-conceived effectively erase not only the (emotional and physical) injuries that becoming mobile entails for large numbers of people, but also the responsiveness of governments to democratic pressure.

In conclusion, we wish to reiterate that this commentary is not about disciplinary cavilling. Nor is it about demonstrating that the authors of the Report deliberately indulged in cherry-picking. While we all think selectively, in the case of an organisation as influential and well resourced as the World Bank, institutional or intellectual blind spots have global implications

– setting the norms for thinking about and practising development. Because of the status of the Report, any presumptions on the part of the World Bank that there is only one respectable, economic, theory of development have global resonance. A failure to rigorously examine, compare and engage across alternatives neatly simpli fies policymaking into “an I for a D”, but at the cost of failing to provide thoughtful and relevant policies. These costs are likely to be particularly pernicious at the local scale. During the past few years, World Bank and International Monetary Fund officials have begun to leapfrog over the national scale to work directly with sub-national (provincial, state and metropolitan) government agencies and politicians. Through highlighting the “local” scale, this Report legitimises such “behind the border” interventions; scales at which institutional actors are illequipped to challenge the presuppositions behind the World Bank document.


1 Since 1990, the Report has received considerable scholarly attention. While many limit their comments to the theme and content of the Report, since the Asian financial crisis, many have also focused on the sociological aspects of the actual practice and politics of knowledge production in the World Bank. For example: Broad (2006) examines how the incentives in hiring, promotion and publishing, as well as selective enforcement of rules, discouragement of dissonant data, and actual manipulation of data, are all fair means in an enterprise of “paradigm maintenance”. Wade (1997) examines how the Report itself is constructed and how it reveals struggles and schisms within the World Bank. Moore (1999) demonstrates how the World Bank’s apparent return to the State reflects a manoeuvre to maintain the hegemony of neoliberalthinking.

2 Although titled the World Development Report, the document often focuses on particular geographical regions. Exemplifying and providing stylised representations of places is thus an important discursive strategy of the Report.

3 Throughout, we use double quotation marks to designate terms used in a particular way in the Report.

4 Density refers to the value of economic output per hectare; using the idea of scale economies, the Report argues that higher density is more economically efficient at the “local” scale, and can be achieved through urbanisation. Distance refers to the economic cost of mobility across a country (faced by people, commodities and capital); it makes markets less efficient, so governments should act to reduce distance costs to enhance factor mobility. Division refers to barriers to movement, particularly international barriers, which need to be eliminated because they also undermine market efficiency. Turning to policy instruments, institutions refer to “spatially blind” policies (e g, taxation, property rights, public services); infrastructure refers to state investments to enhance spatial connectivity (reducing communications costs, easing migration); interventions are spatially targeted policies designed to favour particular places. Interventions are seen as the black sheep of this triad: A necessary evil, to be used only on those rare occasions when the playing field of spatial competition is uneven, and in ways that avoid compromising (marketpromoting) institutions and infrastructure investments.

5 Serious questions have been raised even in these places of expertise about the environmental sustainability of this nirvana, given the selfevidently unsustainable nature of the US lifestyle, but this Report explicitly sets these issues aside – an odd move for a Report that purports to be about geography, a discipline that puts nature-society relations at the centre of its concerns.

6 Although the Report covers other scales, for the purpose of this essay we choose this scale; the one favoured by much geographical scholarship.

7 Methodological territorialism means taking territories as natural, autonomous units of analysis – much as microeconomic theory treats individuals as natural, autonomous economic agents (methodological individualism).

8 Geographical economics is used for research that examines geographical phenomena using mainstream economic theory.

9 Local governments can claim about 50% of the revenue of commoditised housing development (65% in Shanghai) through both land and tax revenues.

10 The hukou system refers to the household registration system in China which circumscribes rights to individuals to specific places. Rights to services, etc, in this system are not portable. This means, once you leave the area in which you are registered, you are both illegally residing in other places and are denied any entitlements.

11 See Pierre F Landry (2008) for a detailed discussion.

12 Statistical Communiqué of Shenzhen Economic and Social Development 2008; http://www.sztj. com/main/xxgk/tjsj/tjgb/gmjjhshfzgb/200903 243520.shtml


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