Urban Development Factors and Economic Sustainability: A Systematic Literature Review

Abstract

The process of rapid urbanisation provides significant opportunities for economic growth, which, however, do not necessarily translate into long-term economic sustainability, but depend on a variety of factors. The focus of this paper is to critically analyse the relationship between key factors in urban development (population growth, urban area expansion, infrastructure investment, economic development and traffic congestion) and economic sustainability, and also to investigate the mediating role of infrastructure quality. The paper is based on the literature that underpins a doctoral study of the city of Riyadh in Saudi Arabia, and presents a theoretically grounded explanation for the impact of urban development on sustainable economic outcomes, based mainly on the literature of sustainable development theory, infrastructure-led development perspectives, urban growth theory, the interaction between transportation and land use, institutional perspectives, and smart growth principles. The review contends that urban development is not only about the growth of population, land area, investment and economic activity. Instead, it is the ability of urban systems to transform growth pressures and investments into systems of sustainable infrastructure that is the key to sustainability contributions. Population growth could create opportunities for the labour market, as well as opportunities on the demand side, but at the same time, it puts pressure on urban systems. Likewise, spatial fragmentation and inefficiencies in infrastructure could emerge, both as a result of urban expansion, and in response to a lack of coordination. While infrastructure investment is the backbone of productivity and connectivity in general, it does not necessarily lead to sustainable results, as the quality of the infrastructure is a precondition for the sustainable economic outcomes of investment. Traffic congestion is a negative externality which can diminish productivity and raise transaction and mobility costs. Four major gaps have been identified, namely: lack of integration of several urban development factors in one single framework, lack of theorisation about infrastructure quality as a mediating variable, lack of representation of rapidly changing Middle Eastern cities in previous studies, and methodological limitations. To illustrate the suggested conceptual model, the paper claims that the quality of the infrastructure serves as a transmission mechanism between the processes of urban development and the economic sustainability. The review serves as a basis for future empirical studies, especially in fast developing cities like Riyadh.