PRIORITIES IN URBAN RESEARCH

By Melvin K. Bets and Benjamin Chinltz

The authors a r e members of the staff of the Economic Study of

the Pittsburgh Regional Planning Association.

IN THE BUSINESS WORLD, if a product finds a market the seller is not likely to divert his attention from selling to philosophize about what his cust- omers really want. The problem is assumed away; if the product sells, it satisfies real needs. When the economist observes the business world, he is inclined to go along. Not so when he begins to inquire into his own product and his own market. The grants may be pouring in from all directions; he is flooded with consulting assignments from public and private agencies. He has all he can do to keep his head adore water. Yet he goes about with a strong feeling of anxiety about his value to society. This is the kind of in- trospection we are to engage in.

When we canvassed urban planners and related practitioners in our area about their goals we encountered a set of attitudes toward urban problems that we had not anticipated. We found ourselves driven, ult imately , to put this question: does a public outlay in a particular area have to be justified in terms of its likely effects on the competitive position of the area in relation to other areas, or is it sufficient if we can show that the expenditure will reduce the costs, monetary and/or non-monetary, of producers and/or consumers in this area ?

There is a lot of confusion on this point, and we as economists, are part ly to blame for it. Two quite unrelated problems have been thrust upon us and we haven ' t taken enough trouble to educate our clients sufficiently on the dis- tinction between them. The confusion can be illustrated by the following quotations from the CED statement, "Guiding Metropolitan Growth": First,

" T h e heart of our problem is the use of land and of other economic resources. particularly public revenue resources, in our metropolitan areas in the most efficient manner ."

We think this is a fair s ta tement of the urban problem. We see no mandate here for an investigation which leads to recommendations on ways and means of accelerating the aggregate or even the per capita growth of income and employment in particular metropolitan areas at the expense of each other or at the expense of non-metropolitan areas. The competition between urban areas is certainly not a mat ter for national concern and it would appear to be out of scope for the urban economist.

Yet the same CED statement, and on the very same page, says the follow- ing :

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"The existence of any urban area at a particular place, and its growth or decline, depend on the expansion or contraction of opportunities for employ- ment and investment. If this is understood, a community will usually desire to take the governmental steps which can help maintain and increase such op- portunities."

To be sure, this is what the community would like to do. But is the pr imary responsibility of the urban economist to increase the efficiency of the metropolitan economy or to create employment opportunities in particular places ?

The confusion of purposes is encouraged by these two facts of 1ire. First, most urban economists are working for a particular area rather than on the problem of urban efficiency per se. Second, the economist is expected to come to grips with employment and income in the area as a whole, if only to arrive at totals used in subsequent allocation to parts of the area. The result is that he gets involved with the question of what is making a particular area grow slower or faster than the nation or other areas and, ultimately, with specific measures to improve an unfavorable rate or maintain a favorable one.

To put it mildly, the urban wave caught the economics profession unpre- pared. Cities have been growing for centuries and their problems along with them; yet all of a sudden it seems if they can ' t grow anymore unless we study them right away. As a consequence, research in this field emits all the over- tones of a crash program. But the researchers have had to make do with an inheritance of old tools that scarcely do honor to the tasks at hand. Under the boom conditions, the temptation is to bend the tasks to the tools. But to do so may distort the function of the urban economist.

What kind of new equipment do we need most urgent ly? We believe that improvements in our ability to appraise the organization and functioning of the metropolis should get the first priority. This implies intensive research into every major aspect of urban life. We want to be able to evaluate urban institutions in terms of their efficiency in the use of resources in meeting urban needs. We can have as much confidence in our prospects for sa t i s fac tory performance in this field as we can in any field of science which can command a substantial research effort. But the path of least resistance for economists leads elsewhere today-toward preoccupation with the size of metropolitan area and their rates of change in size.

We have much to learn to improve our methods of projecting national ag- gregates. We have still more to learn if we are to improve our success with regional projections. Our ignorance is greatest in the intra-regional field. Even within the narrow confines of projection, our needs are greatest precisely where our capacities are weakest. The conclusion is obvious: we c a n n o t afford at this stage to become enmeshed in the explanation of regional aggre- gates at the expense of progress in the intra-regional field. For us, personally, it is a painful position to take since we are regional rather than intra-regional specialists, but the t ruth will out.

We object to the preoccupation with regional aggregates for still another reason. Our hunch is that even after we have succeeded in identifying the

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levers which can be manipulated to influence the aggregate growth of an area, these will be few in number and their manipulation will have modest effects. By contrast, our faith is that the leverage of public policy in improving the internal pattern is considerable. Hence, if we want to maximize the yield of our efforts, we should be putt ing more of a fixed budget into the analysis of the organization of the metropolis and less into an analysis of the factors af- fecting its aggregate size.

Finally, if we think of ourselves as working for the national welfare, rather than for the welfare of particular areas, the prior claim of intra-urban analysis is clearly established. Each of us can be working to improve the efficiency of a particular metropolis and our total output will be approximately equal to the sum of the parts. This cannot be true of our separate efforts to advance the relative growth of particular areas.

As we said before, we share this confusion of purposes with the urban planner himself. We put it to them this way : suppose we told you flatly that you are powerless to alter the observed trends in population, money income, and employment : wouldn' t you still be free to perform your pr imary mission? Surprisingly many were downcast at this prospect. Significantly they pointed out tha t get t ing projects approved on that basis is an uphill battle against heavy Odds. But this did not account entirely for their attitude. The predilec- tion for growth was all too evident. Here is a typical case: a planner was asked to work on a program for improving the Central Business District in a depressed city in mid-Pennsylvania. H i s reaction: " A plan for the CBD is the last thing in the world they need I"

Here is another example. Recently one of us participated in a broad discussion of trends in the location of industry and the differential growth of areas. He speculated on the likelihood that areas which have been growing rather slowly or have actually been declining might make an about face and grow at an accelerated rate. The planner in the group asked: "Well, h o w did the Pi t tsburgh renaissance get go ing?" . He assumed that Pi t tsburgh has reversed a long term relative decline. Of course, nothing could be fur ther from the truth. I t has become a more at tract ive place to live and work. But there is little indication that this effort at making the city more attractive has affected its growth trend.

We can help to clear the air on this issue by directing more of our talents to the core of the urban problem. If we stick to our knit t ing our clients will, too. If they say to us, give us projections, we should say to them, how do you intend to use them ? Eventually, it will become clear that they need our help more urgent ly in the task of organizing the metropolis to function more efficiently.

What does an Urban Renewal Coordinator have to know? What does a City Planning Commission have to know ? What does a Transi t Commission have to know? These are questions which most "projectors" have not exerted themselves to answer. Now, we do not insist that every individual researcher has to perform both funct ions-- the specification of variables and their projec- tion. But some of us should be on both sides of the table, because the failure

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of the policymaker and the economist to define a working relationship in realistic terms has all sorts of undesirable consequences. For one thing, the urban policymaker, despite his initial willingness to allow the economist to define his own task, is often disillusioned with the final product. He wasn ' t able to specify better what he wanted but he knows that what he got is not going to help him too much. On the other side, the economist finds it very difficult to allocate his research resources. Should he t ry to provide a very detailed pro- jection of industries at the expense of large margins of error or should he aim for a very aggregative projection with a small margin of error? Should he stress employment, a measure he kind of warms to, or land use, which makes him uncomfortable just to think about it ? Should he aim for accuracy in per capita income or in the income distribution? Should he try to project the number of households or the kinds of housing people will demand ? He has to make choices but he has no system of priorities. Because he couldn' t get his client to specify priorities, he pret ty much committed himself to forecast everything and now he is in trouble.

We are prepared to subject our position to the following test although we are not quite sure how the test will come out.

Suppose we were to itemize our dissatisfactions with the pattern of metro- politan development, i.e., with the organization of the metropolis. This in itself is a formidable task which presupposes a lot of the thinking which we claim hasn ' t been done yet. But let us assume for the moment that we can draw up such a list. Having done so, we could pose this question: how many of these sore spots could have been avoided by planning, given the con- ditions which were known at the time when the Critical decisions were made? I t goes without saying what we think the outcome of such a test would be, but we are open to a demonstration that lack of foresight has been the critical deterrent to rational decision-making on the urban scene. The mere carrying out of the test would fall into the category of research activity for which we are suggesting a high priority.

There is no question in our minds what urban planners would offer as an answer. They would insist that the major problem is lack of information about the future. To take the other position would imply a confession of inadequacy or of impotence which they are as reluctant to make as anyone would be in their boots.

We don ' t encourage the urban planner to recognize his inadequacies by assisting him in assuming the role of a prophet. Implicitly we are agreeing with him that prophecy is the one ingredient he lacks to make him perfect. We offer him a product which he can then use as a smoke screen. He can say to the populace in effect, " I f you think we have problems today, consider how much worse mat ters will be in thir ty years." He is not effective in solving today 's problems, but by assuming the garb of a prophet, a garb which we are willing to make for him, he can prosper.

We surely need to provide a basis for more aggressive public action on the urban level. There is a lot of inertia to overcome. There are vested interests. There is a general distrust of public planning. And, nobody likes

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to pay the price. How do we lay a foundation for action? Surely not by closing our eyes to the dir t and gr ime at our feet and peering into the clouds. This is escapism. Religion is prophetic but it also prescribes for the present. Prophecy without prescript ion is completely innocuous.

We want to emphasize in closing that we are m e r e l y questioning the sys tem of priori t ies which has developed in urban economics, in general. Obviously, our complaint is ei ther not fair or not re levant in many instances, In Pit- tsburgh, for example, our mandate calls for a hard look a t employment pros- pects as an objective, completely separate f rom and of grea ter importance than, the whole question of metropol i tan development. Surely many more economists than we are aware of are addressing themselves to the core prob- lems of urban economics. The Penn Jersey Study seems to be appropr ia te ly oriented, as fa r as we can tell. But we have the s t rong feeling that the overall allocation of resources has been less than optimal.

DISCUSSION

By Dick N e t z e r

ANY CALL FOR A R E T U R N TO F I R S T PRINCIPLES is likely to put the caller 'one up ' . Bers and Chinitz most engagingly and cogently make a modified appeal for a re turn to essentials in the application of economic analysis to urban affairs. To one who is, if anything, more of a fundamenta l i s t in these ma t t e r s than are our protagonists , the appeal is more than welcome.

In operat ional terms, wi th reference to what regional economists working with urban policy have actual ly been doing in past few years, the paper ' s distinction between concern for allocation of resources w i t h i n metropol i tan areas in an opt imal fashion, on the one hand, and the mercanti l is t -cure-numbers- game concern with growth in par t icular places, on the other, is surely well- taken. Similarly, in these terms, the indic tment of u rban economists cannot be shrugged off. But my own feeling is that if we do go back far enough to t ru ly first principles, we will find that the authors are exercised about special ra ther than general cases and that in concept a t least we need not reject all concern with the total size and shape of a region 's economy.

F rom my viewpoint, the u l t imate first principle here is that of compara t ive advantage. We do most cer ta inly operate within the f r amework of a free t rade national economy and, to some extent , in a free t rade world economy. In such an environment , resources are likely to be used most product ively in a region when the region specializes in those act ivi t ies for which i ts compara- t ive advantage is g rea tes t or its compara t ive d isadvantage least, or put t ing it another way, the oppor tuni ty costs of the pa t te rn of resource allocation will be minimized. And in a broad sense, any change in resource allocation which enhances the efficiency of the metropolis will enhance its compara t ive advantage.

Note that this says nothing a t all, in itself, about the size of a metropolis or its fu ture ra te of growth. Given the relat ive endowments of other regions, the net balance of compara t ive advantage of our metropolis, its efficiency, and the welfare of its residents may be increased, and opportuni ty costs over-all

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may be decreased, if it were to shrink in size. This may indeed be the case for P i t t sburgh or for the mid-Pennsylvania ci ty desirous of an improved CBD.

But focusing on compara t ive advantage in the general case does not neces- sar i ly preclude growth through g rea te r success in competi t ion with other areas. I t seems likely that in a wide range of circumstances, shifts in land-use pat- terns, for example, which make the communi ty internally more effficient--and a more comfortable place for those commit ted to the area- -wi l l improve the a rea ' s over-all compet i t ive position and s t imulate a more rapid growth rate. The displacement of cer tain types of industrial land use in Manha t tan ' s CBD by office, distribution, and service uses be t te r able to exploit the special ad- van tages of these locations is a case in point. Developments pointing in the same direction for the area immedia te ly north of Chicago's CBD and on the southern f r inges of the CBD make the point even more strongly, for fewer toxic side effects, which bear upon how comfortable life is, are involved in the Chicago example.

As indicated, I have no patience with the mercant i l i s t approach to inter- regional competition, which underlies so much of the work done recent ly in urban economics. The techniques (e.g. localization quotients) and even language (e.g. basic-nonbasic) f requent ly have a nas ty r ing to the f ree t rader who is a citizen of the United States, as well as of the State (or metropolis) in which he resides. But m y impression is that Bers and Chinitz have gone overboard. The urban economist working for a region can legi t imately seek to answer the question, " H o w can we best compete?" , just as his counterpar t working for a corporation does, without necessari ly subt rac t ing f rom the general welfare. The point is that the ci ty should s tar t , as the authors suggest , with an "analys is of the guts of the metropol is ," just as the corporation first of all should look to its own production function. And I agree, too, that the leverage of public policy is considerable here. Moreover, I can cite cases in which concentrat ion on what public policy can do to the internal pa t te rn has had a decided impact in improving the compet i t ive position.

The inferences I draw agree with the r emarks of our speakers, regarding the relevance of the classical economics of resource allocation to urban com- munities, but I would broaden this to view resource allocation on a somewhat more global scale, somewhat analogous to classical international economics. I too am uncomfortable with modern economics, in a substant ive sense, applied to the urban scene; I hasten to add that there is no dispute as such with modern technology in urban economics, only with emphasis on the wrong pro- blems.

The job of the urban ecomosist, then, as I see it, is a classic one--con- t inually to impress upon policy makers tha t resources are limited, that hard choices mus t be made often involving the discard of a t t rac t ive al ternat ives, and that every decision and choice has i ts costs. In short, we have to be practi- t ioners of the dismal science. And this involves concern with the guidance that can be afforded, in urban policy decisions, by the price sys tem and the marke t mechanism, within the sphere in which the marke t can give us answers. This sphere includes not only those aspects of public and pr iva te action to

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which direct application of pricing devices is feasible--such as a broad range of t ransportat ion problems--but the possibilities f o r indirect guidance f rom market calculations in other areas. I t would seem ent i re ly feasible, for example, for the one-in-twenty urban economists who has thought about zoning--inciden- tally, was the ratio developed f rom survey techniques?--to develop schedules of "social diseconomy" charges either to supplant or to help guide the yes-or- no process of zoning.

For despite our dissatisfaction with urban economic studies as tools for policy action, we do have to retain our balance. As noted, some studies have specific mandates which require them to get involved w i t h what may, in a larger sense, be secondary matters; only a ve ry large s tudy--say Penn-Jersey --can do all of the crit ically important things we would want done. I suspect that things are looking up, in general, and that support is more readily avai- lable for studies more direct ly at tuned to public policy actions. Perhaps my position is a based one, for this is exact ly what the current three-year program of the Regional Plan Association is all about. We are translat ing the Vernon study findings into ve ry detailed and specific intraregional results, as an input for the policy formation process; the policies we concern ourselves with are those which hopefully will increase the region's efficincy in the broad sense. So, inevitably, my answer to the question does economic research help?--is, yes, it will.

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