In this episode, Shruti speaks with Alain Bertaud about how Indian cities have evolved, utilities pricing, land use restrictions such as floor area ratio and floor space index, slums, charter cities, urbanization in Africa and much more. Bertaud is an urbanist, distinguished visiting scholar at the Mercatus Center at George Mason University, and senior research scholar at New York University’s Marron Institute of Urban Management. From 1980 to 1999, he was the principal urban planner at the World Bank. His book about urban planning is titled “Order Without Design: How Markets Shape Cities.”
SHRUTI RAJAGOPALAN: Welcome to Ideas of India, where we examine the academic ideas that can propel India forward. My name is Shruti Rajagopalan, and I am a senior research fellow at the Mercatus Center at George Mason University. Today my guest is Alain Bertaud. Alain is an urbanist and a distinguished visiting scholar at the Mercatus Center and a senior research scholar at the NYU Marron Institute of Urban Management. He was the principal urban planner at the World Bank until he retired in 1999. He is the author of the book “Order Without Design: How Markets Shape Cities.” We spoke about the evolution of Indian cities; the differences between Bangalore, Hyderabad, Ahmedabad, Chandigarh and New Delhi; restrictions on floor space index; urbanization in Africa; slums and much more.
For a full transcript of this conversation, including helpful links of all the references mentioned, click the link in the show notes or visit mercatus.org/podcasts.
Alain, welcome to the show. It is so good to see you.
ALAIN BERTAUD: Thank you so much for inviting me.
Evolution of Indian Cities
RAJAGOPALAN: I have been a big fan of your work. I have learned so much about urban planning, urban economics, life, culture, everything from your writings. I want to start with India. You have been visiting India for the last 60 years. You started going in 1963, your first visit to Chandigarh. What have you seen as the big change in the Indian urban landscape?
BERTAUD: I think that India has really taken a personality in between. When I arrived in ’63, there was still a bit an obsession with the British, with the raj. There was a nationalist movement, of course, which came to independence. At the same time, there was a mixed feeling that they had to follow something. Let’s say the raj was still relatively important, I think. Little by little, then I think India developed its personality, and I think there were many changes.
Of course, the most spectacular change was the change in the economy. That, you could see even in the streets. The difference was, in ’63, there was still very high level of poverty. You have much less now. I think, also, which I think is interesting for me, because I always visit slums, is to see the employment. You still have slums, but the employment of the slums is very different. In the ’60s it was really very marginal employment. You could not believe that people could make a living doing this type of recycling of refuse, of local refuse. Now when you go in the slum, you see even people with machineries and things like that. They are much more integrated in the economy.
RAJAGOPALAN: You’ve written about how India is very reluctant when it comes to urbanizing—not its people, but its policymakers. They’re very reluctant about increasing densities and things like that. On its own, through the transformation post 1991 and after liberalization, India now has close to 50 cities that have over 1 million population.
BERTAUD: That’s right.
RAJAGOPALAN: It’s much more urban than it was when you first visited, and also than it seems on paper. Now, what sort of model should India follow? Should it focus itself on making 10 or 15 megacities, huge metropolitan areas, which are like Mumbai and Shanghai? In the existing places where we already know people want to move, we start growing those out and also growing those in height. Alternatively, should we think about these 50 cities as already having a critical threshold of a million-plus people, and urban planners should really focus on these 50 cities as opposed to 10 megacities?
BERTAUD: I think that, frankly, India should abandon the idea of planning the growth of cities. They have done that since the beginning. They were not the only one, you know; Europe did the same thing. I think the United States is the only country which had no plan (because it’s a federal country) for the growth of cities. I think that this has been a mistake. People vote with their feet.
It’s certainly legitimate for India to have a policy where you pay attention to health and education, sanitation in smaller cities. If you see a discrepancy of level, that’s completely—but it should not be because they want those cities to grow at the expense of others. They say the people vote with their feet, which has happened.
Don’t forget that if Mumbai is now close to 16 million people, depending on the way you count, it’s not because it was planned for 16 million. It was planned for 5 million, or not even. There was a discouragement. People decide that going to Mumbai was better for them than going to a smaller town. I think we have to respect that because they have a knowledge, the people who migrate have a knowledge that we planners do not have.
RAJAGOPALAN: There is still a question of, not planning in that central way, but planning in the sense of demarcating public and private spaces, building roads, building sewage—or at least creating a grid where we know future roads and sewage systems will come. Should the focus be 50 cities that are over a million, or megacities where we just start increasing capacity very quickly?
BERTAUD: I think that you should focus wherever the people are, maybe including the cities which are not necessarily growing very fast. You have to look at, I think, discrepancy in services, especially the basic services. Each city has a capacity to manage itself. There is now—especially the level of education in India has enormously increased. I agree with you that India, I think in their regulation, has spent too much time trying to control what the private sector was doing on their private lot, and not enough what was happening in the public space, which is not directed by markets and therefore is entirely the responsibility of the local authority.
If you look at most streets in India, in urban India, you find that 50% of the area of the street is unused or misused. There are rubbles, there are people encroaching there, there are all sorts of things. I think the local authority has to try to make a better use of this public space. Then this is top down, where I am completely supporting grassroot movements, people voting with their feet.
I think that the local authority, rather than trying to tell people where to go by trying to direct them by investments, things like that, they should just concentrate on the public space and think about what is the best use of the public space. Widening the sidewalk or, on the contrary, creating a bicycle or motorcycle lane, maybe? They have also to observe means of transport. I think that many cities consider that trains, suburban trains for instance, or subway or buses are the only means of transportation.
In India, you have now more and more motorcycles, and you have rickshaws, which have always provided a very good service or complementary service to the thing. Very often the rickshaw and the motorcycle has been considered the enemy, where in fact they are part of the system. Now, I’m not saying that the rickshaw should replace the subway, I’m just saying that these are complementary things.
Ideally, even a trip in a large city, large conurbation like Delhi or Mumbai, probably most people will use two means of transport in one trip—taking a rickshaw to a station, or a motorcycle or an electric bicycle maybe to a station. I think that instead of trying to optimize the train or to optimize the subway, you should optimize transport, which is a different thing.
Transport, including—you have to realize that let’s say the need for transport, demand for transport is very different from somebody who lives in a slum and has a very low income, to an engineer who has a very good job. Both of them should be able to move around. You should not just concentrate on the very poor and neglect the other, but the other is also true.
Floor Area Ratio Restrictions
RAJAGOPALAN: From your work, I’ve also learned that the elevator is also a mass transportation system. Everything else that you mentioned is horizontal, which also has a lot to do with urban sprawl. It is when we have urban sprawl that you need a metro, and then the last mile is covered by motorcycles or rickshaws and shared buses and things like that. Whereas if you reduce urban sprawl and you increase the height limits or have no restrictions basically on the heights, then you automatically get another very environmentally friendly way of transportation. It’s already an electric vehicle; it is called an elevator.
This brings me to the other part of your work. You have written a lot about FAR (floor area ratio) restrictions or floor space index (FSI) restrictions. These are basically restrictions that the planners impose on land use, and how much floor space can be built per unit of land. It tends to be quite low in India. The reason it’s low is that the planners use all kinds of bizarre language. They want to control—I’m saying this in quotes—“excessive population,” “excessive density,” those sorts of things. They think it’s going to cause congestion and environmental degradation and so on.
Whereas what you find is, it is actually urban sprawl that causes environmental problems because everyone relies on private vehicles. It increases congestion in a much larger space, and it creates lots of air pollution and so on. How should Indian planners think about FAR as they move forward? Should they just remove these restrictions because they’re stupid and people will build as high as it is economically valuable, or do they make some sense in some cases?
BERTAUD: I think that they probably should gradually remove them. They have to adapt to infrastructure too. By the way, in India people think that if you have high-rise buildings, you will have higher densities. In fact, if you look at the density map of a large city in India, the highest density is in the slums, which are horizontal, because the slum dweller cannot trade off capital for land. Therefore, they consume very little floor space, but relatively more land-per-flow space than the middle class.
This idea that you have to restrict FAR just to avoid high density, because the density of Indian cities is relatively high compared to other cities of the world, I think this is a myth. It’s the opposite, in fact. I’ve given an example in my book, actually, of a suburb of Mumbai where you have a slum next to a middle-class housing. And the slum, which is horizontal, has a much higher density than the middle class, although the middle-class housing consumes much less land per person than the slum. I think that there are a lot of myths like that.
I think in India, there is also this myth of the village, which came maybe from the history of India, maybe from Mahatma Gandhi. They idealize—
RAJAGOPALAN: A romance with village life.
BERTAUD: —the village. It’s a romantic idea—which in a certain way, it was the same in England, that with garden cities was a bit like, “Let’s get back to the village where people are virtuous, get up early” and things like that. I think it’s a myth, but it’s very prevalent, and so there was a lot of resistance.
Now, one thing in India is that of course, if you build a high-rise building in an area which now is underutilized, you’ll have to adjust the infrastructure. Now, adjusting the infrastructure is much less costly than expanding the land that is urbanized. You’ll have to have a mechanism to have, let’s say, an impact fee or something like that where when people then install—let’s say more middle class will consume more water in an area which consumed before less water—you will have to adjust infrastructure.
Now, this is not very difficult. Some people think, “Ah, but in this street we have a pipe of this diameter; therefore we cannot have more water.” Well, it’s very cheap and easy to put a second pipe or replace a small pipe by a big pipe, whatever. It can be done very quickly. It’s not very expensive. Much more expensive to expand the city. I think that you should have a mechanism to do that and to recover the cost either through bonds, general public, or maybe through impact fee directly from user, saying in this area we increase the floor ratio by that much, or even we leave it free.
The idea that if you free the floor ratio, you will suddenly have a 100-story building is not true. As you go up, the price of construction goes up; the cost of construction goes up. Maybe you’ll have a skyscraper where some Bollywood actress will be, but in general, the Indian middle class will probably go into buildings which are six, seven, eight stories high and not towers, except in business district or things like that.
RAJAGOPALAN: Other than having impact fee, I think a good start in cities like Mumbai is to just start charging the correct price of water and electricity.
BERTAUD: Absolutely. Yes.
RAJAGOPALAN: It is hugely subsidized at the moment, which is causing a host of other problems. In fact, the only people who actually pay the real price are the slum dwellers.
BERTAUD: That’s right.
RAJAGOPALAN: They buy through private tankers and things like that. I think even just rationalizing to market prices is going to make quite a big difference in utilities infrastructure because then they can actually afford the capital investment, and that can be recovered.
BERTAUD: That’s right. There is underinvestment in water in all of India.
BERTAUD: And sewage and water, and indeed the pricing of water. This is when I was working there with a bank. My colleague engineers, the answer was always, “Water is a gift of God. How can we charge for it?” Again, this is a myth. The water from a river or a spring when it come out of the Himalayas is probably a gift of God. When it arrives in your pipe in Mumbai on the fifth floor, it is not a gift of God anymore. You have to pay for it. It’ll be okay to subsidize the consumption of the first certain liter per capita per day for the poor people. After that, you should have a price which corresponds to—
RAJAGOPALAN: Reflects the scarcity.
BERTAUD: —to reflect the scarcity.
BERTAUD: Including like you do that for electricity in most countries. I’m not sure—in India electricity is shared, but when you go above a certain consumption, you pay more per unit.
RAJAGOPALAN: Yes. In India, there’s a tendency to subsidize everything for the middle class in urban areas. Depending on the city, there are lots of electricity subsidies and therefore a lot of electricity theft. People who don’t have access to the formal arrangements need to get their electricity from somewhere.
BERTAUD: Then the electricity company has to go with a begging bowl to the government, and depending on the political situation, they get their bowl full of money or not. If it is not, then people will have scarcity of water.
RAJAGOPALAN: Is another way of thinking about FSI in terms of not having one single FSI or one single restriction—having mixed use the way you have in, say, New York City versus Mumbai? And having it closer to the transit stations, having fewer height restrictions or allowing higher buildings near transits as opposed to the rest of the city?
BERTAUD: Yes. Frankly, when we talk about FSI, we are talking about restricting the consumption of land versus floor. I think it’s better left to the consumer. Now, if people feel uneasy about it, saying, “Well, suddenly we’ll have a tower in the middle of nowhere.” By the way, I don’t think it’ll happen. If it does happen, then what you could do is progressively lift the FSI.
When you are talking about increasing the FSI around a subway station, for instance, or train station, yes, of course. Normally the price of land around those, the market should reflect that. If people are using the subway or the station a lot, and if you had a free market, you would have already a tall building there.
BERTAUD: You don’t need to say to the planner, “Oh, you need tall building there, not there.” You see, you don’t build skyscraper just because you like it or because planners or architects like it. You build it when the land is expensive.
RAJAGOPALAN: Yes, and you can recover the cost.
BERTAUD: And you can recover the cost. Yes. The price of land in a certain area is a good indicator of demand. What is bad, of course, is to hide the price by subsidies and things like that, or regulation.
Politically, it’s true that people are so much used to this FSI restriction that they are afraid, which is true in the United States too. We have the same problem. If there is any change, they are threatened by it. You could say politically that you could do it from selecting the area or things like that. It’s only as a political maneuver, let’s say. From an economic point of view, there is no reason to.
Now, I am not against regulation for safety or sanitation. The way a building is connected to water or to sewer has to be normative. There is a municipal norm for that. It should not be left to whatever you want. Those things have to be very strict.
RAJAGOPALAN: Yes. Also, land is different in a coastal areas as opposed to places that have earthquakes. There are, of course, reasons to restrict height.
BERTAUD: Exactly. Yes.
RAJAGOPALAN: It is not aesthetics, and it is certainly not economics.
BERTAUD: Yes. The only place really, I think, it is legitimate to restrict heights is around airports. You have fly zones. And there might be other reasons, environmental in other places. But in general, I think you should leave—and also for flooded areas, things like that, I think the job of the government is to give the correct information about the area which needs to be flooded, and that will affect the price. If it’s hidden, then when you buy land, you don’t know if it’s flooded or not.
Rather than restrict it, I think it’ll be better to have good local engineers. They can decide—they can show the areas which are likely to be flooded, and that will affect the price of land. That will lower the price of land, or it’ll increase the cost of insurance. Again, you should never hide—prices are signals. Sometimes you have very poor people or social cases. You want to compensate those high prices, but you should target them to those people. But to hide the price in general of things, you remove information. It’s like censorship in the press; it’s the same thing.
RAJAGOPALAN: Yes, and then other obviously unintended consequences and bizarre things happen.
BERTAUD: Yes. The market works if you have symmetrical information.
RAJAGOPALAN: Yes. In your paper with Jan Brueckner (this is on welfare costs of building height restrictions), what you’ve done there is a simulation based on assumptions of how cities that are outside of India generally tend to sprawl when there are FAR restrictions. And you use the model—first, you have the simulation model, and then you use that model for Bangalore, and you find that the welfare cost is in the range of 1.5 to 4.5% of household income.
You model the expansion of the city based on the distance from the city center when the height restrictions are no longer binding for construction. Is this a realistic way of modeling Bangalore, or should we be thinking about building heights based on GDP per capita or building heights in other tech centers like Hyderabad and Gurgaon?
BERTAUD: Every model is a simplification. If it’s a model which does not simplify, it’s unusable. In a way, what is interesting is that certainly now Bangalore is not a monocentric city. Trips are more from suburbs to suburbs, but however, we have found that even in non-monocentric cities, a city like Los Angeles or Atlanta, you find that you have a density gradient which is the same.
The density is lower in the center than it’ll be in a more monocentric city or a city which has a lot of amenities in the center, like Paris for instance, but you still have a gradient. Because the closer you are to the center, the more access you have to jobs. You see, when people go to cities, it is to have access to the maximum number of jobs. They want to change jobs.
And for firms, it’s the same thing. They want to have access to the maximum number either of consumer or employees, and they want to select, among all these available employees, whoever is most skilled. The closer they are, in a way, to the center—that’s why the land is more expensive, even if there are not that many jobs, because they have access to more jobs. In a way, the model again is a simplification.
You could build a model specifically maybe for Bangalore, but there’s no doubt that restricting the FSI means that you want people to consume more land for a unit of space than they would normally. That means you are pushing them to consume more land. Why should you do that? Because the people will not disappear. If they are forced to consume more land, they will go more into the suburbs, although they don’t want to, but because that’s the only solution.
The problem with planners is that they think people disappear. They think that if they provide only low-height buildings, then people who want to build high will just not come. That’s not true. They need the housing, so they will go to farther-away places. The model of Bangalore was calculated on that average. Again, of course it’s a simplification; every model is simplification.
Hyderabad and Ahmedabad
RAJAGOPALAN: What has Hyderabad done right that other cities have done wrong in India?
BERTAUD: Well, Hyderabad at a certain time—I don’t want to take the credit for what they did, but—
RAJAGOPALAN: No, you must.
BERTAUD: I remember I had worked there, but we were not discussing FSI at the time. One day somebody in Hyderabad, a planner, told me, “We are in competition with Bangalore. What should I do? What should we do to attract more people?” In Hyderabad, there’s a lot of potential; there’s a good university. I told him, “Well, remove the FSI,” and maybe they had already the idea of doing it. I don’t want to take credit for it, but I think that certainly this idea of competition with Bangalore was important, and they did it for some time. I think that they reinstated it eventually, but I think that that’s a good way to compete.
I’m not sure; after that I never visited Bangalore, so I don’t know. It’s possible that they were not able to invest in infrastructure sufficiently or redesign the street. You see, I think a very good example is in Ahmedabad, where there is a project for the restructuring of the center and the CBD [central business district]. It’s increased FSI enormously, but at the same time it’s widening the streets. It makes a lot of sense. They are starting—I mean, they have started some years ago. It takes time.
I think it’s very current to put FSI and infrastructure increasing slightly the public domain without land acquisition. You take the owner of the individual plot, saying, “We give you a very large FSI, even larger than you will use probably, but you live two or three meters so we have a wider sidewalk.” That, I think, is something which is quite feasible if it is clear. Again, it should not be done plot by plot because that looks like maybe corruption even, or it could become corruption.
You give a plan in advance. Say, “This is a rule from now on,” the plan is approved by the municipality or by the state, and then everybody knows what is the rule. There is no hanky-panky.
RAJAGOPALAN: Yes. I think the other thing Ahmedabad did right is anticipate the growth of the city.
RAJAGOPALAN: As the edge of the city was increasing or expanding, they started demarcating the public and private spaces in terms of the road grid before it reached the limit, which is very unusual.
BERTAUD: Of course, there was a law in Gujarat which allowed that, but I remember trying to work on it some 30 years ago, and the way it was implemented was not very satisfactory. So the law was there, but it was very slow. The planners who were doing it did not really understand this. Again, they were a bit too much anti-private sector. They thought that confiscating land from landowners was a good thing in itself. It was not doing very well.
Then there was the earthquake, a big earthquake in Gujarat. They decided to use this law of designing the street, separating the street, and they have to do it fast because there were people waiting in temporary housing. The Gujarati, they are very practical people; they managed to do it. In a way this disaster of an earthquake was—now, if you look at the satellite imagery around Ahmedabad, you see that indeed the city developed and the infrastructure developed as the city developed. That has a lot of, I think, positive effects. It increases supply of land, it should decrease the cost of . . . There are other aspects of course: the length of building permits. There are also some regulations on building itself, parking and all that, which should be revised. Probably there’s not a silver bullet in housing.
RAJAGOPALAN: Yes. There is no silver bullet.
BERTAUD: If you attack really the ten problems which are the most important in housing, then you can improve the situation. Again, Ahmedabad has shown that. That’s a town planning scheme.
BERTAUD: In Ahmedabad, it’s in fact land readjustments, but it’s those town plans. Sometime in India, I remember in Punjab, discussion in Punjab with people saying, “Well, we can do it.” And doing town planning scheme, you need a lot of people who are very skilled in doing it. You can read the regulation the way they do it in Gujarat, but I will compare it to looking at the score of a music and saying, “I take my violin, and I just have to read the score, and I will play.” You need to know how to play the violin. And so you need to train planners who know how to do a town planning scheme. Then it works very well. I think that now in Ahmedabad, the supply of land followed the expansion of the city.
RAJAGOPALAN: Let’s switch to a case like Mumbai. You’ve also written with your co-authors, like Bimal Patel and others, about how to avoid urban slums. And this is, once again, a question of just sticking to the basics like demarcating public versus private spaces, not thinking of population densities as a problem, instead welcoming them, building the infrastructure, removing height restrictions and so on. Now, that tells us a lot about how we can avoid future slums.
What is a good way to think about existing slums? Especially in India, like Dharavi has over a million people. The problem is not going to go away, even if we fix the height restrictions in the surrounding areas, and some slum redevelopment has to be done. I believe Adani, who’s currently in the news, has got that project. It’s basically almost a bilateral negotiation, but with a million people to redevelop. What is a good way to think about that?
BERTAUD: I’ve been visiting Dharavi, again, for many years.
RAJAGOPALAN: 60 years.
BERTAUD: Yes, and every time the municipality and the World Bank says, “Have a look and tell me what you think you should do.” Then there are lot of entrepreneurs also who had fantastic schemes where all the Dharavi people were getting into real estate and becoming rich or things like that. Every time I look at it, I put those numbers on a spreadsheet, I was never sure that the people of Dharavi will benefit at the end.
You are trying here—it’s a very complex society, Dharavi. It’s an entity. There are a lot of jobs. Those jobs are becoming now much more sophisticated than they were before. Before, again, it was mostly garbage recycling and very basic garbage recycling. Now you have literally industries. You have a supply chain there. If you disperse those people or even change their house—if somebody was on the ground floor, you put them in the fifth floor—can they do their job? During the time you do that, where would they go? Do they lose their job? Do they lose their connection, their network? I am never sure.
One thing we can do right now in Dharavi—and the government has been doing it, but maybe they can do more—improve the school, improve education, improve health, prevent flooding. Remove the garbage, and again, to remove the garbage, you have to adapt your collection to the streets of Dharavi. You cannot say, “Well, our trucks need eight-meter streets. If there are no eight-meter streets, we don’t remove the garbage.” You have to do something—wheelbarrows, probably, or something like that—but I think this is important to improve it.
Now, little by little, I think then you have to look at property rights. That will take much longer, very complex in Dharavi. And I think that in a way, improving the life of the people of Dharavi, if they themselves decide that they have made enough money and they move to another area, that will be fine. But anything which will force them out, I will be very, very reluctant to support it because, again, you should do no harm. Many people think that Dharavi could become a park or something like that. Sure, if you kick all these people out, the area will look better.
RAJAGOPALAN: It’s a billion-dollar park. That’s the revenue and value that place generates.
BERTAUD: Then you will have destroyed the life of people. You will push into poverty a million people. That’s not the goal of urban planning. It’s not to improve areas; it’s to improve the welfare of the people. You have to keep this welfare. And when it’s so complex—that’s why I think when a city expands, it’s very necessary to reserve area which will be more spontaneous, where, let’s say, tiny plots, the equivalent of slums there—but do not have enough of those, so you don’t have 1 million people in one go. You have a community of 300, 400 people. Then they can piggyback on the infrastructure of the wealthier, and things like that.
This is what they are doing in Indonesia, by the way. The Kampong, probably, in the suburb they do around existing villages—what would be the Gamtal in India. They reserve an area where you have an informal building which follows the demand. The problem with all those norms is that they are not demand driven. You see, the planners establish a minimum consumption. This minimum consumption is above a large part of the population. What do they do? They wait to become richer or they disappear.
They don’t disappear. They don’t go back to their village. They are condemned to informality; that means they don’t have any rights, really. You have to remove informality, not by bulldozing people, but by accepting that they are a section of the population which is poor and that the government does not have the resources to put them in public housing; that does not work.
You have to accept that those people are poor, and that for a time they’re going to live in conditions which are not very comfortable. But try to be sure that they have clean water, that the sewer works and that the garbage is removed. Then good education, better school and better health center. That I think should be the emphasis, not so much on the houses itself. That, they can build themselves, which are maybe not that comfortable, but you can always change the housing. If they have a good health and education, then they can go ahead.
RAJAGOPALAN: Yes, in India, we simultaneously have too much state and too little state, in the sense that the state is not there when it comes to public goods, services, infrastructure. There’s too much state in the sense of all the areas of the city, which should be demarcated for private enterprise and activity, the state will try and regulate every last detail. What ends up happening in India is that places like Chandigarh and New Delhi—which according to me are terrible cities, or terribly planned cities—are actually beacons of functional cities.
RAJAGOPALAN: Chandigarh is held up as the poster child for city planning. One, can you tell us a little bit about Chandigarh, because you were involved since your very first visit in Chandigarh? And then I have a bunch of questions about everything surrounding that.
BERTAUD: Yes. At the time, Chandigarh—it was in 1963. I was still a student at the École des Beaux-Arts. The studies were very long, eight years; I get a little bored in the middle. And I read the books of Le Corbusier at CIAM [Congrès International d’Architecture Moderne] conference, and Corbusier writes extremely well; it’s very punchy. I was convinced that this was the ideal city which was being built there. I decided to go there. I hitchhiked my way to Chandigarh.
BERTAUD: From Marseille.
RAJAGOPALAN: How did that happen? How does that work? What was the route that you took?
BERTAUD: At the time, through Turkey and Iran, Afghanistan, Pakistan.
RAJAGOPALAN: How did you cross the border?
BERTAUD: I crossed the border walking with my backpack. At the time, Pakistan and Afghanistan for some reason were in dispute. There were no trucks crossing. I just walked through. I had the backpack. I did a lot of walking, especially in Afghanistan. You see, again, this is a privilege of being born when I was born, long ago. When I arrive in Chandigarh with my backpack, but with a university education, they were very happy to give me a job in Chandigarh.
A student like me arriving now in Chandigarh will get nowhere, certainly never get a job. If I remember well, I think I was paid 30 rupees a month. Now, the rupee was a little more valuable than now, but I could live quite well on it. For me, the lesson was not the monuments that Corbusier built, but it was just that the city didn’t work at all the way—I was going to work every morning, and I had friends very quickly there, and we would go to restaurant or cafe to have a coffee together or something. Then I needed new clothes too. Going across like that, all my clothes were in rags.
I found that the only place really where I could find—and my Indian friends told me that—was in the slums, where in the former city of Chandigarh, in the shopping center, which was located in the middle of each unit, which is a big mistake. Again, it seems strange that nobody ever observed the city. Normally, the commercial area is along the road that people take to go to work, and here it’s just like if every sector is a self-sufficient city.
At the center, you have the shops, and many shops were actually, especially at the very center, was the government emporium, things like that, not really the shop where you find the thing you need. For me, it was a big lesson. And I discovered also the informal sector and how this spontaneous thing works. The restaurants in the slum, which were at the edge of the slum and of the former city, they were in competition. They were competing; they were eager to get clients. If the food was not good they would not survive. They have to survive, and therefore it was a good thing.
That was a lesson for me, and also that things didn’t work at all. This idea of the, again, the circulation was around the big avenue, but then no commerce was allowed there. Where, in fact, now I understand that they have changed the zoning, and because of pressure of the private sector, they are changing the zoning and allowing shops on this edge.
RAJAGOPALAN: Do you think the problem was a misunderstanding of how people really work in a city, or do you think it was a distaste for commercial enterprise, or is it a distaste for poor people? Because in India I see all three simultaneously. It’s like a very middle-class or elite enterprise, and everything is done to keep things for the middle class and elite as if the poor people can be pushed out or left out. They can be in the slums or in the periphery. What is it? Is it about private enterprise or poor people?
BERTAUD: Let’s say the idea of Corbusier—Corbusier liked geometry, and he liked symmetry and order. For him, order is symmetry, and so that’s what he built. Now, I think India reacted to it by seeing also a hierarchy. When you see the sectors, when you give your address in the sector, you could know what is your ranking in the hierarchy. The first sectors were for ministers, and after that, it was for top IAS officers and things like that.
That, I think, the Indian culture accepted very well, this hierarchy. Then the commerce, I think, it’s a naivety that each neighborhood is self-sufficient and like a village is isolated. Then if you are in a village, indeed at the center of the village, you will find usually the thing. If you are in a city, you will find commerce around the main street, and the main street can be very long because at the streets, people either take the bus—there will be bus stops every 200 meters. That’s where people will shop.
It’s an ignorance of the way a city works. Again, this idea that if a city was composed of a lot of small villages, self-sufficient, then it’ll be like administrating a village, which is relatively simple compared to a large city. This is a myth that still many planners—recently the municipality of Paris is promoting this 15-minute city; this is, again, the regression to the village.
If you go to Paris, it’s not to leave within 15 minutes of where you live. One must take a subway and get to the best work which is offered. Again, I don’t see a real conspiracy, let’s say, in this. I see just that some prejudices which exist in every culture and get a little reinforced by a physical form, which is they parachute from outside. They say, “Hey, that’s why.” Now, on the other hand, if you compare Chandigarh to Brasília, I think Chandigarh is much more successful because again, people don’t obey laws so strictly.
If people like Chandigarh, by the way, it’s because of course they provided a very effective infrastructure long in advance, at the expense of all the Indian taxpayers. It was not paid by the municipality. The taxes in Chandigarh didn’t reflect the cost of the sewer. They benefited from that, all the Indian taxpayers contributing to their sewer and their roads.
RAJAGOPALAN: It was also the capital of two states, Punjab and Haryana. The government locating itself there made a very big difference because of all the state activities this attracted.
BERTAUD: Right, yes. That created the first demand. Then, there was, especially at this time after the trauma of Partition, Punjab cut in two, so there was a political—I don’t criticize Pandit Nehru for subsidizing Chandigarh. I think, in a way, it was a way of creating national unity, saying that the Partition has been traumatic, but we can deal with it. I’m not criticizing that at all. I think that sometimes there are political necessities that we as technocrats cannot judge. The problem is that if everybody thinks, “Ah, well, every city should be like Chandigarh”—
RAJAGOPALAN: It’s a bad idea.
BERTAUD: —it’s a bad idea because the resources of the country are not there. Then, this rigidity of use, they were minimum. When I was there, actually, I was designing. I was really a glorified draftsman, frankly, because the models for housing were built by two British architects, Jane Drew and Maxwell Fry. We had the models. I had to adapt those plans to individual lots. Those were really plans that you find in London or Europe with the little kitchenette in the living room, which is not at all the way Indians lived, the way they cook, things like that, not at all like that.
When I asked why it was so different, some people told me, “It’s to modernize society.” They thought that you can use a physical building to modernize society. I don’t think that’s the way to do it. You modernize society by promoting education, especially for girls. That will modernize society. To use a house, a plan, to modernize society is not a good idea.
RAJAGOPALAN: It tells us how they view the world. It’s very consistent. The way they view the urban landscape and infrastructure is the same way they view people, is the same way they view the possibility of a physical structure like a house. It’s the lens of the planner; it pervades everything.
BERTAUD: Right, yes. The idea that by controlling everything you’ll have a society which is an ideal society, that means “ideal” as you imagine what is an ideal society. Again, we get back to the idea of Hayek that you cannot plan for something you don’t know. You don’t know what’s the priority of an Indian family who just migrated or arrived from Pakistan at the time, and were living in the other part of Punjab, and is moving.
The best is to leave them the maximum freedom so, in this specific situation, they can optimize their welfare themselves. What they cannot provide themselves is, for instance, clean water. That, you have to provide, and you have to provide it where they are, not where you want them to be.
New State Capitals
RAJAGOPALAN: One of the policy ideas which is routinely floated—every few months I’ll read something like this in the paper—is that the Indian state governments should move the location of their capital from the existing capitals to a new place. Two good things can come of it. One, they will have to put in the infrastructure to set up a new city. We know that government employees and politicians will work hard to have good infrastructure to the place where they need to be.
The second is the existing capital, always the best locations are given to government spaces and offices and all basically government business. That place is already well served by utilities. That can get freed up for private enterprise. Do you think this is generally a good policy suggestion, or this can also be achieved by just having better infrastructure in existing state capitals and things like that?
BERTAUD: I think two things you can say about it. First, if you feel that government is using land inefficiently in the center city—you could say that, for instance, for the government building of Maharashtra in the center of Mumbai—and you could say, “Well, why don’t you evaluate their real estate assets and act as an enterprise, saying we have those assets there, but we could be in a suburb of Mumbai.” I don’t think, by the way, creating a new city is a good idea because what do you do?
Let’s say that you create a new city for the government of Maharashtra somewhere. That means that you are going to develop infrastructure, heavy infrastructure in an area where there is nobody there, and therefore you are going to have less money for the infrastructure of the people who are already there in Mumbai. You cannot say that you have overspent infrastructure in Mumbai. You still have a deficit.
I think the best will be to do exactly what an enterprise does; they own real estate asset in the center, and they decide, “We could move to the suburbs. We will be better off because with this money we could build better building. We could buy computers or do all sorts of things.” I think it’s legitimate that the city government or the state government look at their real estate assets and whether those assets are justified and move to another place.
Building a new city is extremely costly in terms of cash flow. You have to build in advance. You have to have schools; people are not going to move if there are no schools. The schools have to be built before the people are there, and they are going to be empty for some time. You have to find schoolteachers who are experienced, and they will be sitting in those schools before the kids arrive because if not, it’s too late. You have to pay for that. It’s extremely expensive.
Why not move to a suburb, and that will be a new part of the city and things like that rather than a new city? In a way you could say that Gandhinagar now in Gujarat, it’s nearly a suburb now. It’s become a suburb of Ahmedabad, but when it was built, it was not; it was really a different city. It stayed empty. I will very often go to Ahmedabad where there were few streetlights working, where there were a lot of roads which were not paved. Then I will go to Gandhinagar to meet somebody. You had even streetlights working where there was absolutely nobody there. It was necessary because if you want to attract people, you need to have streetlights. Where the people were, you had no streetlights, and where they were not, you had streetlights.
RAJAGOPALAN: People go where the jobs are, basically.
BERTAUD: Exactly. Even all my colleagues that I met in Gandhinagar, in the evening, they went back to Ahmedabad. They were not living there. Now Gandhinagar has taken the life of its own that—I’m talking about 20, 30 years ago. Say the cost of the transition was enormous, this stock of infrastructure in areas where there is nobody. The Indian taxpayer paid for it, or the Gujarati taxpayer.
RAJAGOPALAN: No. I think you are absolutely right when you say they should be run like how a corporation would think. That assumes a hard budget constraint. We know that most municipal governments don’t have any revenue-raising capability other than the big cities in India like Mumbai, which means that everything is basically intergovernmental transfers. In that world, it’s very hard to think like a corporation when there is no hard or soft budget constraint.
BERTAUD: That’s right. Again, they have a begging bowl with central governments transfer, and in a way, the more successful they are, the more justified they are for having a bigger begging bowl. How do you cut this vicious circle? I don’t know.
RAJAGOPALAN: I would at least start with more fiscal federalism. It’s a chicken-and-egg problem. So I’m routinely told, “We can’t let municipalities and village governments raise their own revenue. They have no capacity.” But on the other hand, if they can’t raise their own revenue, they’ll never build capacity.
BERTAUD: Yes, exactly.
RAJAGOPALAN: Because every project just comes from the top, and so I still think India is not relying at all on property taxes or on any kind of user fees or service fees. To the extent that it relies on it in cities, they’re not rationalized to market prices.
BERTAUD: That’s right, yes.
RAJAGOPALAN: I certainly think more local government. I know there are incentive problems with local governments too, but I think India has too little local governments overall.
BERTAUD: Yes. Especially now that the level of education in India has changed very much. Again, that might have been true in the ’60s where really, again, where I could find a job in Chandigarh. There was probably nobody else. But it’s not true now. The level of education, they have a lot of very skilled people. There is no reason why somebody cannot be a very good administrator of a small town and then transfer again some responsibility for administering the—to have only transfer, it’s an incentive for failure because the more you fail, the more you have a case for having a larger transfer.
RAJAGOPALAN: Yes, absolutely. I want to switch gears out of India and talk about the rest of the world. The demographics are changing quite a bit, and we are in a very strange moment in 2022/2023. This is the time period when India, China and the entire continent of Africa have the exact same population, roughly 1.43 billion. Of course, how they move forward is quite different. China peaks this year, India’s population will peak in 2065 and Africa will peak in 2100.
This is a relatively large difference. In the next 80 years, Africa will add 2.5 billion people, which is just extraordinary. Now, given that most of the people in the next century will reside and come from Africa, and Africa has very low levels of urbanization overall, how does one think about Africa? If someone came to you today and said, “We need to train the next generation of urban planners in Africa,” what would you tell them?
BERTAUD: It’s an interesting problem. But in a way, what happened the last 20 years was not something which was planned: this idea of megacities or cluster cities, the conurbation of Delhi. Delhi was not something which was even thought. If it’s there, you have to manage it. The Chinese are managing their megacities too. I think Africa will have to do the same thing, although maybe the African cities are taking a different shape. I have not been to Africa for a long time now, and my experience is mostly in South Africa where I spent quite a bit of time, but not so much in west or east Africa.
When I look at Google Earth images of new development, especially in the corridor between Lagos and Abidjan, which is developing very fast, I see those conurbations, and I don’t recognize the model that I know. They have areas of not very high density but continuous urbanization. I don’t see any focal point here. I don’t know exactly all this type of urbanization work. I don’t see tracks of commuting or things like that. For me, it’s a bit of a mystery, and it’s possible that the form of urbanization in Africa will be different.
That’s why it’s all the more important that Africans be trained to look at their own country. It’s all good and well to go abroad to learn basic skills like GIS [geographic information systems], things like that, that’s fine. The model should not be our cities. The model should be the type of urbanization because it’s very different.
If I look also at cities like Bamako, again looking from Google Earth—this is my favorite pastime, to look at cities on Google Earth when I cannot travel—I see that there are many, many roads which are relatively wide compared to Asia, for instance. They’re well traced. Very often, it’s a grid and very low density, but you don’t see that much track of economic activity. It’s just a big camp. A bit, I would say, like a Burning Man development or something like that.
Again, if you are a planner there, certainly you have to stay there, observe things, not try to say, “Well, this is all wrong. It has to look like Copenhagen,” or something like that, and see what is the best way to provide mobility, physical mobility so people can get to their jobs, and especially basic infrastructure, power, electricity. Again, that might be—
RAJAGOPALAN: Clean water and sanitation.
BERTAUD: Clean water and sanitation, basic education and health. Don’t worry too much about housing, especially with the climate of Africa. Plus all Africans know how to build things. Don’t worry too much about housing, but worry about infrastructure. Study what is the economic justification of this agglomeration. Now, another thing about the corridor, Abidjan, Lagos, is that these are several countries. They tend to close their border from time to time. They have different currencies. Already in India, when you go from state to state, sometimes you have problems.
RAJAGOPALAN: Now they have reduced that.
BERTAUD: Yes. Now we have reduced, but before you had octroi. Actually, this removal of barriers between states, I think, was very instrumental in India to promote economic growth. Africa has to do the same thing, but between sovereign states, it’s much more difficult rather than in a federal state. Again, there is no silver bullet. There are many, many things to do, but I think that if carefully educated Africans look at their country and say, “We have to create our own model,” they will probably find something interesting.
Now, the other thing is migration. You have in Europe a lot of cities which are what I will call well-oiled machines. They’re working very well. You look at Copenhagen, Amsterdam, they’re well run. Then you look at the demography, those cities, they’re doomed in 20 years because you’ll have a proportion of young people to old people, such that you have to tax the young people so much to maintain the welfare of the older ones that they will revolt, I suppose. You need to bring younger people. You need migration.
Unfortunately, I think now migration is seen more as a generosity. It’s fine to be generous. I’m not saying they should not be compassionate. But I think that if the European cities want to survive, they have to manage migration. They should have a policy, when they have migrants, they should immediately train them in language, norms. The migrants could keep their culture, their way of cooking or food, that’s fine. But there are certain norms to live in a European city which have to be learned. They should be able to start working as soon as possible.
Where the policy now in many countries is, for the ones who are legal, is to wait first a long time before they can work. I think this is a big mistake. Migrants integrate much faster when they can work. They should also have training. For the countries which will have to rely on migrants to maintain their cities, they will have to spend money. A migrant is not a free good. They will have to spend money to host them until they have integrated.
In a way, it’s not very different from the migrants who come, say, in India from a small village and arrive in Mumbai. They have to learn a lot of things. They have skills in their village which are not very useful in Mumbai, but they have to look how to survive in Mumbai in terms of throwing the garbage out, spitting or a thing like that. It’s the same thing. The most successful thing Mumbai can do is to integrate those people as fast as possible so that they can be productive in Mumbai. I think that’s all migration. In Europe it would be the same thing. I am talking about Europe, of course. Japan, Korea and China soon. Now, those three countries do not want to look at migration.
RAJAGOPALAN: Even let’s say that the attitudes change and people are not so xenophobic, they start getting migrants from Africa, I still don’t see a world where 2.5 billion Africans who are not yet born can move.
BERTAUD: No, it’s not going to solve the problem. No. I was more thinking of saving Europe here.
RAJAGOPALAN: Oh, saving Europe, sure. No, absolutely. I have no doubt.
BERTAUD: Saving Europe, I think that they will be a benefit for Africa to have. The diaspora is useful. I have seen it in China, in particular, the diaspora has been extremely useful.
RAJAGOPALAN: In India too.
BERTAUD: Yes, I’m sure.
RAJAGOPALAN: When we think about 2.5 billion, let’s say half a billion are able to migrate, which is still extraordinary.
BERTAUD: No, even less. Probably less.
RAJAGOPALAN: Probably less. Even in those circumstances, 2 billion additional people is massive. It gets me thinking that in some sense, there is nothing called excess capacity in Africa. With these numbers and these demographics, everything is going to get used up. What is the first step? For instance, your work in Yemen, you talk about your first step was to demarcate the public versus the private and actually negotiate with locals and create a grid.
Then in the private spaces, people can figure out what it is they wish to do. Should that be the first step, that the African planners lay out the public-private demarcation? Then the second step is investment in water and sanitation, as you say, and so on? What are the really 101 principles, even without knowing the future with great certainty in Africa?
BERTAUD: Allow people to move where they want to move, to vote with their feet, decide where to move. Then when they are there, serve them with infrastructure. Serve them where they are, not by creating new cities in the middle of nowhere. It will really depend on Africans. Again, I think it’s good for Africans to learn some skills, maybe in foreign countries, which, again, computers, things like that. Eventually, they will have to go back and think cities again. What they have learned in our universities about cities probably is not completely irrelevant.
RAJAGOPALAN: We know this from the colonization and decolonization experiment. The good thing about colonial cities is they’re provided infrastructure, and they’ve invested in it. The problem is they were completely ill-suited for the way that the people in those countries actually wish to live. We see that in New Delhi—I grew up in New Delhi—and New Delhi just feels really awkward. It doesn’t feel like a functional city in any way.
BERTAUD: Yes, it’s a prestige city. The raj, the prestige of the raj.
RAJAGOPALAN: Of the raj. You were talking about this in the context of Chandigarh, but in New Delhi, you tell me your zip code and your street, and I can tell you what services your parents were in, down to not just whether they worked for the government or not, but were they in tax and revenue, or were they in customs or were they artists. We can almost pinpoint to that extent in the absolute center of Delhi.
Should Planners Be Outsiders?
RAJAGOPALAN: When you talk about Yemen, the lovely example you have, I think it’s pretty early on in your book, you talk about how demarcating public and private land was a complicated process. You were, of course, doing it literally with a couple of people and basic tools. The problem was not the lack of tools or computers in your instance, it was more the negotiating with the local people on what they consider or were willing to demarcate as public versus private.
There’s a lot of politics in this. How should we think about planners? Should they emerge from local people? But then they are part of the politics. Should they be like you, who came in from the outside, and therefore they get accepted as a neutral party?
BERTAUD: That’s right. I think that’s, let’s say, why the Yemeni let me do it, and including the municipality were very happy that I do it. Because they saw me as an honest broker in the sense that the land belonged to tribes there, and some tribes didn’t like others. I was completely ignorant of that. My ignorance was in fact my success in this sense, because they knew I was ignorant, that I just wanted to have streets so that people could move. And so that was an advantage.
To have an honest broker—that in a way is why some people are suggesting charter cities where you have an honest broker who will do that. That’s maybe a way to approach it. The only problem if you bring somebody from outside, if this outsider has a prejudice against, “Sana’a should have the Champs-Élysées” or something like that—“You should have one street which is 100 meters wide,” something like that. Because this happened too. I have been always trying not to project my own culture.
I’m very aware that I am living in a different culture, that my own taste is irrelevant, my own preferences are completely irrelevant. You have to bear that in mind, that your own preferences are irrelevant, to be an honest broker. But I think they will probably need that, but I’m not so sure. I’ve seen many UN experts or World Bank experts, and very often they project their own preferences and thinking that this is a universal law.
RAJAGOPALAN: It’s funny because so many people who are urban planners are trained in architecture and other disciplines which have aesthetics and art inbuilt into them.
BERTAUD: That’s right.
RAJAGOPALAN: There’s self-selection. People who become architects and planners—
BERTAUD: That’s right.
RAJAGOPALAN: —come in because they have an aesthetic view of the world, and then to have to suppress that is very odd. I guess the best we can hope for is that they have the same aesthetic view of the world as the rest of the people in that city.
BERTAUD: That’s right. Yes. Because on one hand, if you have a local person—in cities which are still where you have a lot of nepotism and things like that—then this person is always suspect and maybe even feel that it’s his or her duty to favor his kin; it’s virtue in a way to protect your family. But on the other hand, if you bring somebody from the outside, how are you sure that they don’t project their own aesthetic value on other people? I’ve seen that all the time in the Bank and in the UN too.
RAJAGOPALAN: Another suggestion people often make—charter cities tend to be islands or ports. They are rarely in the middle of the continent.
RAJAGOPALAN: Another suggestion is to have 20 charter cities along the coast of Africa, split it up depending on geopolitics and violence and things like that. Then at least the charter cities can be connected either by air or by sea.
RAJAGOPALAN: What do you think?
BERTAUD: Like the Hanseatic League or something like.
RAJAGOPALAN: Like the Hanseatic League except in a much larger area. So the African charter city Hanseatic League—is this something that just seems fantastical to you, or do you think this is worth pursuing or worth thinking about seriously?
BERTAUD: I think that it’s a very attractive idea because, again, the emphasis on the charter city is not so much on their infrastructure. It’s on the management of cities, which is probably the most problematic. Water supply, we know how to do it. What we don’t know is to collect taxes to finance the water supply. That’s a very attractive idea. Now, the problem is why a sovereign state will allow a charter city. And if the charter city is successful, the sovereign states will say, “Hey, that could be a source of taxation which is important.”
RAJAGOPALAN: There’s high risk of expropriation.
BERTAUD: There’s a high risk of expropriation. Now, you have free trade zones, which are, in a way, a kind of charter cities that exist. But there’s one charter city that a few people know about, which is Shenzhen. People think that Shenzhen was just a new city, the way you created New Delhi or Chandigarh. No, Shenzhen was created by Deng Xiaoping by putting a perimeter around Shenzhen, where it was only place in China where you had a free labor market, and it created a real estate market. It didn’t exist in China. Outside of Shenzhen, your salary was based entirely on the government, whatever your skill, and you’ll stay in the same job all your life. There was no mechanism to change jobs unless your cousin was high up in the party or something like that.
The genius of Shenzhen was it attracted enterprise and people who were ready to take the challenge saying, “I am skilled enough to succeed there.” It’s a bit like an immigrant going to United States or another country saying, “I’m confident that I’m skilled enough and my skill will be recognized.” In a certain way, it was a charter city. It was the first time also that enterprise had to pay salaries which will be sufficient so that people can buy or rent houses on the private sector.
Now, some enterprises at the beginning built dormitories, but they will charge separately the fee for the dorms because at the beginning there was not enough private real estate to meet the demand. Eventually, people moved out of the dorms, many of them in private real estate. Again, it was a charter city, but a charter city sponsored by the government itself. In a way, a bit like a free trade zone is sponsored by the host government itself.
RAJAGOPALAN: It makes perfect sense for a transition economy, like say India or China, where you don’t have exactly a sovereignty or a state capacity problem. There are some state capacity problems, but not in terms of providing border control and protection and an army and things like that. Then the real innovation is that all the terrible rules of the communist state or the socialist state are suspended in this area.
The trouble with Africa is not just bad rules. It is a fundamental lack of sovereign status of many of the countries that are perennially in conflict, and have weak or failed states, so that’s one kind of problem. The other is there is not anything within the sovereign state to control very tightly that you would allow a free passage in this tiny island. I was joking with someone the other day and I said, “For charter cities in Africa, I feel like NATO countries should get together and provide NATO security backing to 20 charter cities. Then it might work.” Because I don’t think the problem is skill or labor, I think the problem is if someone will guard them if someone comes to take it over.
BERTAUD: Yes, that will be difficult to accept.
RAJAGOPALAN: It will be difficult.
BERTAUD: Again, no country can release its sovereignty to other countries. Then NATO, I don’t think they would be ready to invest. I can understand the concern for security, for the perenniality, let’s say, of the charter cities. I think, again, the Africans will have to solve it themselves, get together and solve it themselves. We cannot decide for them. We can suggest, but I’m sure they will find it themselves. It’s important that they look at their own problem, again, not extrapolating from other countries but saying this is a reality in Africa.
RAJAGOPALAN: The other concern I have with charter cities is, when they do manage to get buy-in from the governments—and we know wonderful people in common who have worked on charter cities or are working on charter cities. The trouble is, it often involves a lot of corruption and a lot of cultural practices which seem unseemly to Americans or people in the developed world.
That is just the process of kicking off a new enterprise in those parts of the world. London was like that 400 years ago, but we have no appetite to deal with that in a sense, because the sense is, if there is corruption and if there are all these other practices, then the charter city loses its reputation. Do you think charter cities can succeed in these sorts of areas where there is going to be a lot of corruption, to be honest?
BERTAUD: Yes, well, they will have to try. I think the best way is to try and see. You try, you fail, you fail a little and then you modify. The important thing is to try things. Try ideas and test them, and then you will see. Failure is a possibility, and you should not be afraid. If you do things and you want always to succeed, you will do nothing.
RAJAGOPALAN: No, absolutely. I also think maybe charter cities will be better served if the advocates came from Africa because they will once again understand the cultural—even corruption is a culture, and they might just understand it better and be more willing to deal with it.
BERTAUD: Yes, it has to come—and even I would say sponsored by the state in which they are, rather than being an enclave completely. I think so. It’s possible that governments decide that it will give them prestige and resources to have a well-functioning charter city. It could happen. If it can happen in one or two countries, then others will imitate them after.
BERTAUD: The important thing is to try ideas more and more and see what succeeds.
Differences in Urbanization
RAJAGOPALAN: In terms of urbanization in Africa, different countries have had very different experiences. Now, I was looking at Ethiopia and Tanzania, and Ethiopia has double the population of Tanzania. They have comparable GDP per capita, but both have very similar structure of cities. They have one huge city, Addis Ababa and Dar es Salaam, and then they have five or six cities that feel very small compared to the size of the population. Then the rest is not urbanized. I’m sure there is differences. Everything is not a village, but there’s the countryside and there are some peri-urban spaces. What is going on with Ethiopia and Tanzania? For their income level, they should be much more urban than they are.
BERTAUD: Yes. Now, don’t forget, again, people vote with their feet. If Addis is large, it’s not because planners decided that it should be large. It’s probably because a lot of resources are spent in Addis, maybe power. But a lot of the population of Addis is coming from people who have migrated there from the village, so they have a reason for that. I don’t think it matters. We have to second-guess this thing.
I think then if we have a normative view of what cities should be—let’s say in Europe, if you compare France to Germany, you find in Germany a lot of small towns. Even the larger towns are not very large. Frankfurt or Hamburg or even Berlin are not very large. In Paris, you have one city of 12 million and the next city is Marseille, my own town, 1 million. It’s a bit like Ethiopia. We could argue why it is like that from Louis XIV, Napoleon, I don’t know, history probably. But it’s there, so you have to deal with it. You cannot say, if you are French, “Well, let’s take the model of Germany. After all, it’s better to have more smaller cities.”
You have to deal with it. Eventually, maybe if the country decentralized, there is more—maybe then there will be a change. I think it will be wrong. The same problem is in Mexico too. Mexico City, 20 million; in the next city, I don’t know, but it’s much, much lower certainly. And I think it would be wrong to say we are going to plan a new city so that less people will go to Mexico City because if they go there, they have a reason. You have not removed the reason because you don’t know what the reason is.
Countries which have a centralization tradition like France or Mexico are not going to change their culture overnight. It’s better to deal with their culture than to try to change it, especially change it by investing in infrastructure in an area where people will not go is not a very good way of doing it. I would not worry too much about it.
RAJAGOPALAN: That wasn’t my suggestion. It was more that it seems very odd that a country of 100 million people has only one very large labor market. That’s where it was like, that feels bizarre.
BERTAUD: You could try to find the reason. It’ll be very interesting. In the case of Ethiopia, I’ve been in Addis and I have no idea. I have not found anything which explains it either, but you have to deal with it.
RAJAGOPALAN: Yes. I’m not saying it’s a bad thing necessarily; it just strikes one as strange. In contrast, you have South Africa, which, one, it’s very urbanized. Of course, it has five to seven times the GDP per capita of Ethiopia, Tanzania. Of course, it has a couple of big cities, and it has about five or six cities that are over a million people. It just feels a little bit closer to our imagination of a country that size. What have they done right? You’ve spent a lot of time in South Africa.
BERTAUD: Yes. I’m sorry, but this is colonial heritage. I think in the case of South Africa, it was mining many of those sites. After they differentiate, you have a city like Bloemfontein, for instance, which was based on diamond mining. It attracted obviously people there. Eventually, they diversify. Durban was the port and diversified to eventually Cape Town. Joburg was, of course, a mining town and they diversify.
You could have the opposite example. In Colorado, there are many mining towns. When the mines were over, they disappeared. Maybe a large gold mine secured a population for longer. The advantage of South Africa was that their mines were not small. They had large sources. They maintain an economic activity for a long time, enough to differentiate.
RAJAGOPALAN: Yes. Also, I think, unlike places like Colorado, which have enough other cities that can provide services and infrastructure, that is not the case in South Africa. It’s really only the colonial cities that provided that infrastructure. That obviously acts as a lighthouse for people to come. Even the diversified industries, they need to set up somewhere which is relatively safe and has clean drinking water and so on. That might be going on.
RAJAGOPALAN: I have a couple of other questions when it comes to reconstruction, whether it is war or whether it’s natural disasters. We have the example of Syria right now, which has had this horrible earthquake after being torn by war. We observe that people are attracted to the same place over and over again, even after it’s been devastated. We have a long history of this going back a few hundred years, a few thousand years, even after big fires and natural disasters. People try to resettle in the same area.
What is a good way for planners to think about reconstruction, whether it’s in Yemen or Syria or these places which have been devastated, maybe some lessons? The Japanese seem to be pros at it. There’s clearly a way to do it that is working somewhere in the world, but in most places it fails.
BERTAUD: I think that what not to do is to say, “Destruction provides an opportunity to create an entirely new ideal city.” Then you build a utopian city. I think that you have to get back to property rights. Delineate, again, what is public, what is private, and then try to make sure that there are individual lots where people can try things rather than to have the government take over.
For instance, after the war, the city of Le Havre in France was entirely bombed out. The government decided to have a model city built there. The people were bombed out. They were still alive, but they put them in a former military camp. They waited more than 10 years before they could be relocated. They built a new city, but it was a bit of an ideal city for the time, megastructure. If you look at it now—by the way, it’s a UNESCO heritage. I think UNESCO heritage is given to cities which are following the plan because so few cities will follow the plan. Brasília and Le Havre are part of the heritage, not because they function well, not because they are beautiful, but because they follow the plan.
RAJAGOPALAN: It’s where nobody wants to live, so you can preserve it.
BERTAUD: That’s right. I think this is a big mistake. I think that if you manage to have a city with small plots where you have ownership of this plot, people will come there and invest. This is what I hope for Aleppo. I actually have a close friend who is from Aleppo, and we are often discussing this. I think that if they can manage to reconstruct the property rights of the lots of Aleppo, you will have investors and people coming there, but you have to secure those rights.
If the government says, “We’re going to have an urban renewal thing. We’re going to take it over and build a megastructure,” then nobody will go. Of course, allowing people to come back—what struck me, by the way, the construction of Germany after the war, is that people were already living there in caves sometimes. You see, women were taking bricks from broken buildings and stacking them to rebuild. The people were still there. They came back very quickly. The people have to be on the spot even if it’s difficult, if they live in tents. But it’s a big mistake, I think, to put them far away in a refugee camp.
They have to be on the spot, even during this stuff. That’s why you have to bring water and electricity right away, priority and property rights. The example that I’ve been using is, after the earthquake in Christchurch in New Zealand, all the center—well, not all; say 50% of the buildings in the center were wiped out. The government said, “This is an opportunity to have”—Christchurch was a very nice city before the earthquake, but they say, “We can do better. We can have perfect things, eliminate cars.”
They say, “We have to build a plan.” They ask the people there not to start building until the plan was ready, and always also is this expectation that the government might take over some lots; you didn’t know. A city has to survive, people who used to have a shop there have to survive, so they started building their shops in the suburbs. Suddenly, you have a new structure in Christchurch where the center is still empty and the city, they have suburbs where you have shops. It’s sprawled out, it’s a completely different city.
Now they’re asking people to come back, and it will take time. I think this looking for the ideal is a bad thing. I think a city evolves slowly and by trial and error. If you do an ideal plan and you are wrong—and the odds that you’re all wrong are probably 90%—then it’s a disaster for everybody. If the people come back to the center of Christchurch, and in one shop they build the types of things that nobody wants, they fail, but it’s only one lot which has failed. The risk for the city is very little. Where, if it’s a government that does it on a large scale and it’s a failure, nobody survives.
RAJAGOPALAN: Basically, the rules of reconstruction are the same as construction: Follow what the people want to do; be where the people want to be.
BERTAUD: Give them opportunity. Don’t say, “We are going to build for you something that . . .”
RAJAGOPALAN: How do you see cities post the pandemic? And I’m talking especially in the developed world, the sorts of places you and I live, where the central business district for many decades has not been industrial; it has been technology, the knowledge workers, finance sector and so on. Now that is shifting, because those people can now work from anywhere; Zoom has come in. How do you see the central business district in very developed countries, or even in developing countries which have some cities which have this huge knowledge talent cluster?
BERTAUD: It seems now—but again, it’s very close to the pandemic—that you have a tug of war a bit between some workers want to stay at home, and the firms themselves now—at the beginning they were happy to have their worker at home, and now they want them back. Not all firms, but many firms want them back. You have this tug of war. I think, again, here I’ll wait to see what will happen. What balance was the equilibrium?
My guess from observing cities for a long time is that even when you can work at home, at a certain point, you need to meet people randomly. If you work at home, you can spend some time in a coffee shop from time to time. That’s not a substitute for a big city. When you meet people in an office, you have also random meetings, people that come to visit somebody who works with you and say, “Oh, I work there.”
I think that here, that’s where you get ideas. Those random encounters are very important, and that’s something only a large city with a high density can provide. I think that especially for young people who are starting a career, they’re not completely sure. Things are going to change. Technology can change the nature of jobs. They will want to be very mobile, not only where they live but also where they work.
I think that a large city, which in the same place provides a lot of different opportunity, is the best place for that. I think that in the long run certainly the land use in the CBD will change. It will probably be more residential, but maybe also less retail, but more meeting places.
RAJAGOPALAN: More coffee shops, more restaurants, more churches.
BERTAUD: More coffee shops, more churches, more gyms, things like that. Because meeting people is really the function of cities. Tyler Cowen, when he interviewed me, asked me, “Tell me about a movie which is more urban to you,” and I said—
RAJAGOPALAN: You said “Casablanca.”
BERTAUD: “Casablanca.” After that, and I didn’t have chance to explain exactly why I chose “Casablanca.” After, people ask me, “Why do you say ‘Casablanca’? You don’t see Casablanca in the movie ‘Casablanca.’” I say, “Because it’s a place where people meet just in one cafe.” The people you meet there, some are scoundrels, some are heroes, some are neutral, some are corrupt. This is a city. All of them have to make a deal with each other. This is why to me it’s an urban place, because you meet people from different nationalities, different cultures, different objectives, but they all have to survive together. They don’t kill each other, if you notice.
RAJAGOPALAN: Yes. I was in the room when you gave that answer. My first thought was, you know the famous dialogue from “Casablanca”: “Of all the gin joints . . . ” and I was thinking, “You can’t say this in a suburb!”
BERTAUD: Yes. Right? Yes.
RAJAGOPALAN: You can’t get that famous dialogue in a village. You can only get it in Casablanca.
BERTAUD: That’s right. Yes.
RAJAGOPALAN: That kind of city. I remember that moment.
BERTAUD: Yes. You see that the city’s for meeting. Again, for the land use in center city, I think that that will be it. Because let’s say, I live in the suburb in a little town which was charming: four, five restaurants and two Starbucks. But I have to go to New York at least twice a week to recharge my batteries. Although I have a big enough network so I could work with people remotely, although I could meet people at the Starbucks in my town, I don’t think that it’ll be a substitute for what I can find in New York.
RAJAGOPALAN: In New York, one of the things that was changing even before the pandemic was the exit of retail or the demise of retail. I saw this when I still used to live there a few years ago. 9th and 10th Avenue, especially in the midtown area, all the retails started getting boarded up.
BERTAUD: Right. Yes.
RAJAGOPALAN: If the central business district starts diffusing or changes its land use and retail changes because of Amazon and warehousing, and now everyone wants everything at home, what do you think the cityscape will look like, especially in a place like New York, but even more generally?
BERTAUD: Again, it’ll lower rent for retails. You may have things which were not feasible, which become feasible. I was in Edinburgh not so long ago, in October, and I was struck in Edinburgh by the number of cafes and even little cafes where they could have maybe no more than 10 clients at a time. Apparently, this is viable in Edinburgh. I don’t think it’s viable in New York; you cannot operate a coffee shop if you have only 10 clients at a time.
It could be because the rents are lower. If the rents are lower because of all this retail space then maybe you would have other opportunities for pop-and-mom shops. You have that in Tokyo too. If you go in the small lane in the back of a block in Tokyo, you find those little shops, and they obviously survived. They are not subsidized; they survive, so probably because they have low rents. But again, the zoning in New York is so restrictive, it’s so absurd.
RAJAGOPALAN: You have to remove all that and allow the city to evolve.
BERTAUD: To evolve. And maybe the current crisis will convince them that it’s not a good idea to have a list of things you can sell in this specific shop, sell or repair—that’s the zoning also, what you can repair and what you cannot repair in a special shop.
RAJAGOPALAN: It says on the sign in many of these shops.
BERTAUD: Yes, right.
RAJAGOPALAN: Especially in the SoHo district areas and things like that, they will always give you much more specificity than you need in the name of the shop.
Level of Urban Planning
RAJAGOPALAN: The last question—and this is coming partly from the name of the book. The book is called “Order Without Design.” This is, of course, coming from Hayek’s quote where he says, from “Fatal Conceit,” “Order generated without design can far outstrip plans men consciously contrived.” The book is really the embodiment of that when it comes to cities. Now, Hayek cared about knowledge problems and incentive problems when it came to economics.
We have a similar issue when we think about planning, and what is the level at which one should plan. If the planning is too local, you have all kinds of incentive problems, like NIMBYism. Now, if you make the planning stage not so local—let’s say you move it to the district level or the state level as opposed to the local city level—then there are knowledge problems, because they may not know what the people want or how they live and so on. If the level is too high, then the planners lack the knowledge. If the level is too low, then incentives can become perverse. What is the right level at which we should think about planning? That’s the easy last question.
BERTAUD: I think that the planning is mostly for infrastructure, as you know, that I don’t think it’s a good idea for the state to say the shops should be there, the restaurants should be there. The infrastructure, there is no doubt, is top down, especially for a large city. If you design a sewer system for Delhi, you cannot ask people, “Do you want to manhole here, or here?” So it’s top down, but it’s top down while observing what is on the ground. It’s top down kind of like a parachute.
I have an example like that, strangely enough in Shanghai many years ago at the beginning, where there was a campaign to plant trees. The municipality of Shanghai had employees, and they were planting trees. People in the neighborhood were saying—many of them were former farmers probably—they said, “Those guys don’t know how to plant trees. They plant the wrong trees. They don’t water them, or they don’t put enough water.”
The municipality of Shanghai says “Okay.” They had already an administrative structure at the state level, which was, by the way, largely for political control, but it was still administering cleanliness and things like that. They say, “Okay, we will delegate. We have 1,000 employees in charge of trees. In each neighborhood, you will receive two employees who will come twice a week to plant the trees and maintain them, water them and things like that. They will be under your supervision. See, they are municipal employees. You are not paying those people; you don’t have to run a payroll. We will provide the trees, but you give the feedback. If they don’t do a good job, you tell us.”
Apparently, this thing works relatively well. You see, it was the center that administers the thing because in a city like Shanghai, you could not have a neighborhood hiring tree experts and things like that. You had also the advantage of buying trees in large quantities and things like that, but at the same time, you had a local control level for certain things which apparently worked well.
RAJAGOPALAN: China surprises me continuously. Of course, they have this problem of these large megacities and ghost towns where nobody wanted to move. Some bizarre top-down ideas. But sometimes it almost feels like for a communist country, they relied much more on market signals and where people wanted to move than even places like the United States or Europe.
BERTAUD: Well, you see, because the Chinese municipality, unfortunately for them, a large part of their resource is selling land use rights. Because they sell land use rights, they understand very much what is the value of land, much more than a mayor in an American city. At the local level, they understand these things very well.
RAJAGOPALAN: They converted after the reforms of ’78. They had the mayor CEO.
BERTAUD: That’s right.
RAJAGOPALAN: I routinely read how Chinese mayors thought of themselves as the CEO of the city corporation.
BERTAUD: I remember working in Sichuan in a, well, what China considered a small town. It was a town of 800,000. They were making flatscreens and they wanted to expand it. This industry had a problem of recruiting engineers. It was a small town. Collectively, Sichuan is a little outside; it was about three-hour drive from Chengdu. The mayor said, “We have to recruit engineers.”
Then he went to Shanghai in the area of the east coast, where most of the engineers in Guangzhou were, and he made a survey. The mayor made a commissioner survey: What would make you come to Sichuan? They said, “Well, a clean environment, good schools. We will not move to a place where the schools are not good. And a clean environment—we don’t want to breathe noxious fumes.”
The mayor immediately came back, and the city was on the river, and the river was muddy. The riverbank was muddy. He put some marina there; you could have a sailboat. He put (a bit like Manhattan now) something with trees, planted trees where you can run. He put some drastic objectives for the industries to reduce pollution, and it succeeded. It succeeded. Instead of trying to get the government to mandate people to come, or say if you graduate there, you will have a money incentive to come, he just took a survey of demand like a firm does. In fact, like a CEO.
I find many mayors in China with this very intelligent attitude trying to do things and with the ability to do things. When they decide, for instance, that on the bank of the river to put a park, linear park around the bank of the river—
RAJAGOPALAN: They have the capacity.
BERTAUD: —they do that. They do that fast, they do that well. They have fantastic landscape architects for some reason. They know how to plant things which have different colors, also, of the shade of the river. It’s really a skill that you use that way and for the benefit of other people. Now, everything is not perfect, far from it, but we have to recognize that they have some skills that we can learn from.
RAJAGOPALAN: That is a wonderful note to end on. Thank you so much, Alain. This was such a pleasure, and it’s always a pleasure talking to you. And welcome to Mercatus.
BERTAUD: Thank you so much. It was a pleasure for me because for many months I was starved of meeting people and the randomness of meeting people. I have plenty of it this time, these four or five days, and I think it’ll be reproduced from time to time. Thank you.
RAJAGOPALAN: Thank you.