Cities have been the centers of global trade and economic dynamism for more than 2000 years, but this is always neglected when we design trade policies. Interesting article by Alan Berube on Project-Syndicate.

More than 2,000 years ago, before the emergence of the nation-state, the Silk Road connected Xi’an, Baghdad, Istanbul, and hundreds of other cities through trade. In the Middle Ages, Zanzibar and other East African cities served as trading hubs for Asian merchants. And the Hanseatic League, a confederation of market towns, facilitated trade between coastal European cities between the thirteenth and seventeenth centuries.

… In short, cities make trade possible. But the United States and other advanced economies have traditionally neglected this when designing trade policies, consistently favoring blunt instruments like tax and monetary policy over “bottom-up” approaches that support the distinct comparative advantages of cities and regions in global markets. By contrast, China considers city-building a crucial aspect of its export policy.

In the meantime, most cities in the west tried very hard to look “pretty”:

…American cities have relied on vanity projects – such as stadiums, casinos, convention centers, and shopping malls – to stimulate economic growth. But, while such projects may attract limited out-of-town revenue, they are more likely to recirculate local money. At the same time, they fail to capitalize on rising demand in global markets – for which the growth of emerging-market cities is largely responsible.

More here

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