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Addressing Spatial Inequality for Inclusive Development

Explore how spatial inequalities affect social and economic development, with a focus on regional disparities, labor market indicators, poverty rates, and government policies. Understand the impact of spatial divisions and the need for coherent spatial policies for urban and rural areas to promote inclusive growth.

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Addressing Spatial Inequality for Inclusive Development

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  1. Spatial inequalities Ivan Turok with Andreas Scheba, Justin Visagie ‘Confronting Inequality’ conference 28th September 2017

  2. Outline • Spatial inequalities are a symptom of social inequalities – “sorting effects” • BUT they also impact human, social and economic development • Where opportunities and obstacles come together & shape life chances • Social inclusion & cohesion or crime & instability • Segregated, fragmented settlements undermine productivity and growth • Government policy plays a big role in sustaining spatial inequalities

  3. Spatial scale

  4. Regional scale

  5. Persistence of regional inequality (GDP)

  6. Personal income tax generated

  7. Spread of income

  8. Labour Market Indicators Only 40% of working age people in rural areas actively participate in the labour market, and only 23% are in paid work. Meanwhile, almost 70% of working age people in the major cities are economically active and 50% are in work. Sources: QLFS 2015, own estimates

  9. Poverty levels are extreme in rural areas with four fifths of the population below a poverty line. This is almost double the rate of poverty in the metros. Sources: GHS 2015, own estimates

  10. The Treasury allocates more than double the funding per capita to rural municipalities than it does to the metros. This is partly because the metros have a tax base that enables them to generate their own revenues, unlike many rural municipalities. Sources: National Treasury 2016/17 Budget Review

  11. Two-thirds of households in rural areas receive a government cash transfer. This is nearly double the proportion in the metros. Sources: GHS 2015, own estimates

  12. Migration as a response - Poverty rates

  13. Poverty transitions: 2008-2014

  14. Rate of unemployment

  15. Spatial inequality within cities • Residential segregation – affluent vs deprived neighbourhoods • Physical separation of people from productive activity (‘spatial mismatch’ – jobs & housing)

  16. Distorted urban form

  17. 2001

  18. Location of formal economic activity(Source: Sinclair-Smith and Turok 2012)

  19. Why spatial inequality matters • Perceptions of unfairness, resentment – destabilising and dangerous • Reality that life chances are shaped profoundly by local environments and opportunities • Source of economic inefficiency, brake on growth • Wasteful use of land& not capturing the value • Costly infrastructure (eg BRT) • Costs on movement of people and goods

  20. Travel to work

  21. Urban expansion

  22. Spatial poverty trap

  23. Conclusions • Entrenched spatial divisions • No coherent spatial policy – regional, rural, urban • Mainly redistributive, not developmental • Ad hoc initiatives – SIPs, SEZs, Agri-Parks … • No coherent approach to urban land, infrastructure, housing, planning & environmental regulation • Rigid, prescriptive systems rather than enabling • Compliance culture, not problem-solving • Need to make cities function better

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