Interventions to Manage Urban Congestion

zone for electricity above those of the surrounding community and allowed additional generation in the zone to ensure that there is sufficient power for the firms inside. The Bangladeshi government has also secured banks and emergency services within the zone.

Third, the ability to partner with local universities helps maximize the human capital spillovers. Both Coyol and Tangier have linkages with local universities, offering training programs, degrees, and internships to locals. Chittagong has no such programs.

The advantages of human capital spillovers can only be achieved with high-skilled labor. Thus, focusing on high-skilled exports is another element contributing to the success of a SEZ. Coyol and Tangier both have specialties that require high-skilled labor. Coyol focuses on medical devices, while Tangier focuses on high-tech products, among other things. In comparison, Chittagong specializes in garment manufacturing. Low-skilled work provides jobs, but it does not create the opportunities for human capital accumulation through work or education, and the economic benefits are lower.

Interventions to Manage Urban Congestion

The discussion that follows focuses on place-based interventions to manage urban congestion. Improvements in transport, housing, and land expansion have the potential to lower urban costs and support the transmission of agglomeration externalities.

Urban Transport

Poor transport is a drag on the economic performance of a city, reducing the connectivity of firms to workers, of firms to other firms, and of firms to consumers—and with it both the livability and the productivity of the city. Reductions in transportation costs, such as those arising from road investments or improved public transit, can help increase connectivity between business and residential areas, improving mobility within the city and reducing commuting costs (see Fujita and Ogawa 1982; Lucas and Rossi-Hansberg 2002; Glaeser and Kohlhase 2004; Srinivasan and Bhat 2005; Liu 2005; Owen and Phillips 1987).

Quantity Changes: Lower Cost and Better Accessibility Transport is not directly consumed, but rather facilitates activities such as working, shopping, or enjoying leisure whose benefits are hard to measure. Hence, the direct benefits are often seen as reductions in the total cost of reaching a destination, including both monetary costs (such as the gasoline consumed by the vehicle during a trip) and the cost of time. In turn, this cost of time will include various elements (such as the duration of trip, the discomfort of a particular mode of transportation, traffic conditions, not leaving at a preferred time, and reliability) (Small 2012). These costs, in turn,