Internal and international influences on urban change

David Satterthwaite takes a closer look at drivers and influences of urban change.

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27 May 2020

David Satterthwaite is senior fellow in IIED's Human Settlements research group

A view over a large township

In Cape Town, many low-income workers live in the Cape Flats, an area with few amenities and a long commute from employment opportunities (Photo: Erik Baker via FlickrCC BY-NC-SA 2.0)

Urbanisation is one of the most significant changes taking place globally and within low- and middle-income nations. But understanding what causes or influences it and the spatial distribution of urban populations is complicated. Many (local, regional, national and international) factors and their interactions need to be considered, often in the context of rapid urban population growth.

We need to examine how urban change is influenced by national economies and their connections (and trading relations) with neighbouring nations and the wider global economy.

This includes investment decisions made by national and local enterprises and investors. But also the 80,000 multinational enterprises and 240,00 foreign affiliates that control such a significant share of the world’s economy. They are responsible for almost a third of global production (PDF)

And, of course, urbanisation is shaped by each adult resident’s decision of whether to stay or migrate – and if they move, to where. City governments seek to attract investment that generates employment, incomes and demand. Generally, a successful city would attract (and retain) more migrants than less successful cities.

Cities are heavily influenced by population/workers, enterprises and public sector demand, for goods and local producer and consumer services, and for premises and accommodation and services. And, for workers, good access to labour markets.

Cities are shaped by the standard and range of housing options available to low income groups, and the provision of water, sanitation, drainage, solid waste collection and other public services.

How housing costs influences urban change

For successful cities, there are all the changes driven by wealthy groups, of which there is an unprecedented number in many cities. Their demand for housing has dramatically ramped up city house prices (PDF).

Housing affordability can be measured by the ratio of the house or flat price to a person’s annual income. Affordability is considered to be up to 3:1. So someone earning £40,000 a year could afford a loan to buy a £120,000 house or flat. But now many cities have ratios of 5:1 and some have 10:1 or more. External investors add to the pressure – buying housing as an investment (‘financialisation’ of housing) and often leaving the housing empty. 

The result is large numbers of workers who cannot afford to live anywhere close to their workplace, including those working in key services and even workers from middle income groups. Ironically, this includes the very people the wealthy rely on for many services (see the movie Parasite!)

I remember a conversation I once had with a senior civil servant who was complaining to me about all the unemployed people living in informal settlements and how they should go back to what he assumed was their village home.

So I asked him: "Do you have a maid?" Yes. "Do you have a cook?" Yes. "Do you have a gardener?" Yes. "Do you have a security guard?" Yes. "Do you have a driver?" Yes. "Please ask each of them where they live..."

We met a week later, and he smiled and said: "Now I get your point". Of course, all his service providers lived in informal settlements. His high quality of life and a large part of the city economy depended on them.

With most cities in the global South unable to provide affordable housing, citizens live in informal settlements and suffer very poor living conditions and insecure tenure. But many of these settlements, especially those closer to employment opportunities, are also becoming unaffordable for low-income groups

Political influences on changing urban geographies

Then there are all the powerful national and local government influences on the size and spatial distribution of the urban population. These are often overlooked, including the political and policy changes with long-term influences and those arising when governments do not meet their responsibilities – for water, sanitation, drainage, all-weather roads, health care, schools, electricity….

Most government policies have significant influence over the spatial distribution of the urban population – but some unintentionally.

There are government policies or practices that have spatial goals (such as move the national capital) or strong, intended spatial consequences (such as decentralisation, infrastructure and services in particular locations to attract new investment). There are also government policies or political changes with powerful spatial consequences – determined by how and from where governments draw their revenues and where they spend or invest.

Getting political independence also brought profound changes, not least in the countries where colonial rule had heavily restricted the population’s right to move to and live in urban areas. 

National government support for decentralisation is another influence, providing city governments with more powers and resources to meet local needs and attract new investment. These in turn influence the scale and geography of new investment and the locations where enterprises open up, expand or contract.

It is ironic that so many national governments claim to want to lessen the primacy of their largest city yet fail to support decentralisation, which is one of the best means to do so. Another means is through extending high quality transport and communications and electricity to poorly-served areas. 

Government support for urban centres also comes in the form of the local demand for goods and services generated by their staff. This includes the local government bureaucracy. It includes professionals working in public services – such as schools, hospitals and wider health-care systems, police, emergency services, water supply, sanitation, solid waste collection and management. 

When added together these represent a sizeable chunk of city jobs, incomes and demand, especially for regional and national capitals (to be covered later in this series).

New roles and responsibilities for climate change

So far, climate change has had little discernible influence on changing urban geographies. There are also increasing numbers of programmes for adaptation or building resilience. But there are also increasing numbers of extreme weather disasters to which climate change contributes with devastating impacts on cities.

Are these shifting the spatial distribution of investments away from cities at high risk from such impacts?

The risks to global supply chains are now well recognised. But enterprises also face disruption if flooding prevents their workforce getting to work. There are the migrants coming to cities from areas devastated by extreme weather.

At some point, increases in frequency and intensity of extreme weather hitting cities will change the planet’s urban geography. Even more so without mitigation so urgently needed to avoid dangerous climate change. And transnational corporations may simply move their offices or the factories making their products, even though this devastates the economy of the cities and the workers they leave behind. 

COVID-19 and urban change

Then there is the impact of COVID-19 on urban development. It is difficult to predict what influence this pandemic will bring to what urban governments, resident populations and workforce and enterprises and investors do.  

We do not know how and when it will be under control and what human and economic costs are still to come, although we already see huge numbers without incomes and at risk of starvation, as well as death from the virus itself.

It is likely to bring political change – that will be much influenced by how well (or badly) governments and international agencies respond and continue to respond. Then how quickly and well the economy bounces back and restores livelihoods. 

How well will governments keep providing food and incomes for all those with no income source? How will the pandemic shift attitudes towards the need for universal coverage of good quality health care and ambitious programmes to provide public services in informal settlements? 

Will there be more restrictions on mobility within and between nations which will damage many urban economies and residents’ livelihoods?  Where and in what will private investment go; will it change the geography of global cities? And can what is done in restoring or rebuilding also keep the planet on track for avoiding dangerous climate change?


Recent blogs in this series have heard from community leaders in informal settlements, and researchers who have worked closely with them, as they reflect on COVID-19 and the local responses to it.

The next blog comes from Antarin Chakrabarty of the Department of Housing & Urban Development in Odisha, India. It describes a successful state programme to provide work and incomes to migrants that can be deployed when crises such as COVID-19 hit.

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