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The world has passed a significant threshold: it is now more urban than rural. Urban areas under 1 million in size are projected to absorb a population increase of nearly one half billion in the next fifteen years. These developments will give rise to demands for investments in infrastructure in thousands of cities and towns. Given the simultaneous move toward decentralization of fiscal responsibilities, the weak financial and technical capacity of local governments will become an increasingly serious constraint. Reaching large numbers of municipalities with relatively small investment needs...

Why is productivity higher in cities? Does urbanization cause growth or does growth cause urbanization? Do countries achieve rapid growth or high incomes without urbanization? How can policy makers reap the benefits of urbanization without paying too high a cost? Does supporting urbanization imply neglecting rural areas? Why do so few governments welcome urbanization? What should governments do to improve housing conditions in cities as they urbanize? Are innovations in housing finance a blessing or a curse for developing countries? How will governments finance the trillions of dollars of...