Why poor people stay poor *

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Abstract
In essence, the urban bias hypothesis is that the main reason why poor people stay poor in developing countries is as follows. Small, interlocking urban élites – comprising mainly businessmen, politicians, bureaucrats, trade-union leaders and a supporting staff of professionals, academics and intellectuals – can in a modern state substantially control the distribution of resources. In the great majority of developing countries, such urban élites spearheaded the fight against the colonizing power. Partly for this reason the urban élites formed, and have since dominated, the institutions of independence – government, political parties, law, civil service, trade unions, education, business organizations, and many more. But the power of the urban élite, in a modern state, is determined, not by its economic role alone, but by its capacity to organize, centralize and control. Hence urban power in developing countries – by comparison with early modern development in England in 1740–1820, or somewhat later in continental Europe – has been out of all proportion to the urban share in either population or production. Rural people, while much more numerous than urban people, are also much more dispersed, poor, inarticulate and unorganized. That does not make them quiescent, but it does diffuse their conflicts. On the whole, rural groups fight each other locally; nationally they seek to join or to use urban power and income, not to seize that power and income for the rural sector.

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