policymakers demonstrate

402 Stef Proost and Jacques-François Thisse
policies that ignore the urban environment in which jobs are created and
destroyed are unlikely to be able to deliver their full potential. Similarly, if international
immigration policies must be coordinated at the EU level, migrants
typically have an impact on particular local economies. Moreover, understanding
how land capitalization works might help finance local public goods and
services, thus alleviating the need to reduce city budgets because of macroeconomic
fiscal constraints. In a nutshell, as Cheshire et al. (2014) argue, ‘urban
policy informed by economic insights can help improve policy-making for individual
cities and urban systems as a whole’, hence the whole economy.
2. All regions benefit from the agglomeration effects arising in large cities
through interregional and interpersonal transfers. For example, in 2012, the Îlede-France
(Paris) produced 30.1 per cent of French GDP but received only 22
per cent of the disposable income. In other words, 8 per cent of the GDP is
redistributed toward other French regions. Greater London’s share of the GDP
in the United Kingdom is 23.1 per cent, while its share of the UK’s disposable
income is about 16.7 per cent. In Belgium, the contrast is even more striking.
The NUTS-2 region Brussels-Capital produces 20.6 per cent of the Belgian
GDP but receives only 10.3 per cent of disposable income; thus, more than 10
per cent is redistributed towards the other two regions of Belgium. Very much
like some American cities, Brussels attracts high-income commuters as well as
poor residents.
3. Urban policies are probably more important for economic growth and
social cohesion than regional policies. This is in contrast with the EU’s role in
designing regional policies and its absence from urban policies. Social tensions
between urban neighbourhoods are strong and income discrepancies within
large cities are wide, and both are growing. Investments in human capital and
housing are needed to counter this evolution, but they will not be sufficient.
Several aspects of urban policy suffer from the fragmentation of policy areas.
This holds for public finance, spatial segregation and housing. Urban transport
is characterized by many negative externalities, but the present policy orientations
are far from optimal, as they do not address the most important externality,
that is, congestion. Even though more work is called for, we understand better
how cities work and what policies they need. By contrast, due to the relative
absence of in-depth studies of the subject matter in Europe, we still have a fairly
poor knowledge of what the effects of people’s mobility across the European
space-economy are and could be in the future.
4. For the research agenda proposed in chapters 8 and 9 to be carried
out, we need data that are often available in the US but not necessarily in
the EU. First, for comparative studies across cities to be meaningful, member
countries should agree on the same geographical definition of what a
metropolitan area is, as in the US where the concept of ‘statistical metropolitan
area’ is widely used. Similarly, local data about employment, transport,