The urban hierarchy in Africa: competition and complementarity

In the urban hierarchy, what do different types, or tiers of human settlement do and what are their competitive versus complementary relationships to each other? We specify a hierarchy model of settlements and, in novel work, estimate the spatial relationships between them econometrically for sub-Saharan African countries. The paper uses satellite data to determine the number and extent of settlements (based on built area), from mega-cities down to hamlets. Settlements in different tiers of size generally specialise in different activities. We model this by supposing three settlement types: agricultural, agro-processing and traditional manufacturing, and higher order activities including business services and modern manufacturing. We ground-truth this production pattern by tier for 8 African countries for which data are available. Given many dispersed agricultural settlements, the model predicts regular spacing of agro-processing settlements, and of fewer and larger manufacturing/service settlements. This pattern is driven by a competitive relationship between settlements of the same type (competing for production inputs and in output markets) and a complementary relationship between settlements of different type (producing different goods in an input-output structure). We then turn to looking at city growth from 2000-2014 for 27 African countries, defining tiers empirically by what best explains patterns of growth under forces of competition and complementarity. In examining the relationships across cities in different tiers, we find a larger neighbour in the same tier impinges on own size, or cities are in a competitive relationship within their own tier. On the other hand, proximity to a larger settlement of a different tier than their own enhances size, revealing a complementary relationship across tiers.