Scholarly article on topic 'Modeling Spillover Effects of Leapfrog Development and Urban Sprawl upon Institutional Delinquencies: A Case for Pakistan'

Modeling Spillover Effects of Leapfrog Development and Urban Sprawl upon Institutional Delinquencies: A Case for Pakistan Academic research paper on "Social and economic geography"

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{"Urban sprawl" / "Leapfrog development" / "Land Sustainability" / "Institutional delinquencies" / "Robust regression"}

Abstract of research paper on Social and economic geography, author of scientific article — Syed Toqueer Akhter, Muhammad Hammad Noon

Abstract Land conversion from forest & agricultural to industrial & residential has raised serious concerns for Urban Sprawl in Pakistan, causing Institutional polarization and delinquencies. This has inadvertent outcomes for sustainability of urban development such as inefficient land distribution, high cost of travelling, more pollution, more traffic congestion & higher value of time etc. Solving the Urban Sprawl problem is quite difficult therefore government is trying to modulate the Urban Design. The motive of the research is to find out what are the main reasons for Urban Sprawl in Pakistan and give policy guidance for the remedy of this issue. The research relies upon data on institutional delinquencies associated with urban development in the economy and other data from World Development Indicators such as Urban Population Growth Rate and Land Transformation to explain the elements causing Urban Sprawl during the years 1997 to 2013. Robust regression has been used to illustrate the Urban Sprawl as a function of different land and housing variables. The results show that Institutional Ineffectiveness regarding Urbanization is significantly affected by the pressures been posed in form of Urban Sprawl as well as Leapfrog Development.

Academic research paper on topic "Modeling Spillover Effects of Leapfrog Development and Urban Sprawl upon Institutional Delinquencies: A Case for Pakistan"

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Procedia - Social and Behavioral Sciences 216 (2016) 279 - 294

Urban Planning and Architecture Design for Sustainable Development, UPADSD 14-16 October

Modeling spillover effects of leapfrog development and urban sprawl upon institutional delinquencies: A case for Pakistan

Syed Toqueer Akhter & Muhammad Hammad Noon *

Lahore School of Economics, Barki Road, Lahore, 54000, Pakistan


Land conversion from forest & agricultural to industrial & residential has raised serious concerns for Urban Sprawl in Pakistan, causing Institutional polarization and delinquencies. This has inadvertent outcomes for sustainability of urban development such as inefficient land distribution, high cost of travelling, more pollution, more traffic congestion & higher value of time etc. Solving the Urban Sprawl problem is quite difficult therefore government is trying to modulate the Urban Design. The motive of the research is to find out what are the main reasons for Urban Sprawl in Pakistan and give policy guidance for the remedy of this issue. The research relies upon data on institutional delinquencies associated with urban development in the economy and other data from World Development Indicators such as Urban Population Growth Rate and Land Transformation to explain the elements causing Urban Sprawl during the years 1997 to2013. Robust regression has been used to illustrate the Urban Sprawl as a function of different land and housing variables. The results show that Institutional Ineffectiveness regarding Urbanization is significantly affected by the pressures been posed in form of Urban Sprawl as well as Leapfrog Development.

Keywords: Urban sprawl; Leapfrog development; Land Sustainability; Institutional delinquencies; Robust regression

©2016 The Authors.PublishedbyElsevierLtd. Thisis an open access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).


Syed ToqueerAkhter is Research Fellow & Assistant Professor of Economics, Lahore School of Economics, Pakistan, E-mail , Corresponding author: Muhammad Hammad Noon. Tel.: +923467999907 ,


1877-0428 © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (

Peer-review under responsibility of IEREK, International experts for Research Enrichment and Knowledge Exchange doi:10.1016/j.sbspro.2015.12.039

Introduction; Evolution of Urban Development & Research Concerns

The urbanization and population growth trend in Pakistan for past few decades shows us that, metropolitanization1' have become one of the major issues for the government in the country. Urban development if not administered effectively may cause inefficient land use which in turn causes concerns for sustainable land management , incorporating the fact that enormous growth in an economy's urban population produces more and greater tenement housing, creates opportunity for environmental decay and brings immense stress upon city services already drained beyond extremity. The rate of growth regards urbanization in Pakistan is one of the highest in South Asia and needs to be addressed upon, for efficiency & efficacy.

An Overview of Rural Urban Differentials, Urbanization and Urbanism Culture in Pakistan

The nexus between the population growth and urbanization* in Pakistan has been a profound concern, as is transforming from agricultural based economy to services based economy. Due to structural transformation, new jobs are created and in order to occupy or preoccupy these new jobs as generated by the industrial and tertiary sectors there is an increasing trend in rural to urban migration in the country. Various cities are reaching a threshold after which further concentration of people in those cities may threaten the delivery ofbasic civil services to all.

According to United Nations Population Fund, between 1951 and 1998 Pakistan's urban population5 share rose from 17.4% to 32.5%. The data on World Development Indicators for 2013 shows urban population around 38% , as share of total population, which is further increasing approximately at the rate of 2% each year. Annually there are about over five million rural migrants expanding the cities. By the year 2030 it is expected that the share of urban population in Pakistan would reach to 50%**, however, the spatial arrangement of urbanization is disorganized and concentrated in eight mega/prime cities (Lahore, Karachi, Peshawar, Hyderabad, Quetta, Multan, Faisalabad, Rawalpindi and Islamabad).

One pivotal factor in wide spread rural-urban migration has been sizeable inter & intra provincial disparities. At the time of independence Muslims migrated from India in huge numbers. In the aftermath of independence, stranded Biharis in large quantities shifted from Bangladesh to Pakistan in 1971. Moreover due to Soviet war in Afghanistan (1979) many Afghan refugees were forced to relocate to north western regions of Pakistan. Abrupt urbanization has put a huge pressure on financing of housing development ventures.

Rather than attempting to prompt other resources and encouraging private sector investment the local governments prolong to rely upon provincial governments for transfers. The present legal frame work managing the urban areas (combination of housing development authorities and local government) are not able to serve the issues and challenges of substantial cities and urban areas.

T Making a person, place or thing more urban or city-like (Your Dictionary)

* The term urbanization can be expressed as a process of rising population that expands cities, which incorporates urban expansion, sprawl and urban growth (Shaheen and Muhammad, 2010)

§ Urban population can be quantified as people living in the jurisdictional boundaries of a city (United Nations)

World Bank

Urbanization Experience, Leapfrog Development and Sustainability Risks

Due to unprecedented urbanization, leapfrog development ^ remain core concern for intergenerational equity & justice. Leapfrog development occurs when developers leap over or omit real estate to acquire land at inferior price further out, leaving empty stretch behind regardless the presence of services and other infrastructure that treat the bypass parcel (Heim, 2001). Metropolitan area (city center) in the city mainly contains and provides most of the services to the citizens residing in the city that is why land near the metropolitan area has a higher price as compared to the one at a distance from the urban center. In Pakistan mostly the migrants coming from rural areas are low income earners so they look for inexpensive land to settle which they often find further away from the metropolitan area. The literacy rate in rural areas of the country is quiet low so the rural population has no or less knowledge of excessive costs and problems induced by leapfrog development. Another reason for leapfrog development is that many developers find it easy to build on broad vacant land at the city's edge than to construct new homes into older locality (Pitzl, 1996).]

Besides urban sprawlB one major drawback of leapfrog development in the economy is inefficient land allocation, which in turn causes land sustainabilityissues. Large patches of land are left behind when builders skip over real estate, those patches of land could have been used to construct homes or other infrastructure. But now there are only roads constructed on skipped patches which link the leapfrog development with the city center. A lot of land is wasted in this process and is depriving future generation from having the amount of land that the present generation is having right now. In accordance with land sustainability future generations should have equal amount of urban land that the present generation is enjoying today. If the activity of leapfrog development in Pakistan continues then coming generation would be left with less amount of land to construct homes upon which may cause urban slum§§.

An Overview of Policies and Reforms for Urban Development in Pakistan

Urban development and home construction is one of the fundamental sectors of many vital economies of the world. Similarly housing is an important benefactor to Pakistan's economy providing millions of citizens with jobs and generating billions of rupees of economic output every year. Presently Pakistan is suffering from serious housing crisis, according to Ministry of planning, Development and Reform Pakistan the estimated housing backlog in 1998 was 4.3million units which increased to about 6million units in 2005 and around 7million in 2012 (post-flood situation). To manage this backlog and increasing demand for homes, the government of Pakistan has implemented many housing and urban development reforms soon after its independence. Starting from 1949 to 1998 urban development reforms include housing for refugees, encouragement of private sector investment in housing and implementation of adequate housing finance policies.

In 2001 the government of Pakistan introduced National Housing Policy. National Housing Policy outlines inputs required to bolster the housing sector which includes legal and financial evaluation, indigenous production and use of construction skills and also identifies strategy guidelines for slums. After that several more policies were

n Developing land in a way requiring the extension of public facilities. In addition the utilities are extended on the edge of exiting urban area rather than constructing homes in already urbanized area within the city (

"Urban sprawl is merely the extensions of the urban fringe, i.e. the general expansion of the city or scattering of urban settlement over the rural landscape in an inefficient way that destroys the quality of city (Harvey and Clark, 1965)

§§ A heavily populated and overcrowded urban area mainly characterized by poor inhabitants (Oxford Dictionary)

launched regarding resettlement, water and sanitation which aimed at ensuring just and constant treatment of resettlement problems all over the country, protection of water resources, water purification, increase access to safe drinking water, safe disposal of solid and liquid waste and promotion of hygiene and health practices in the economy. Different ministries, provinces and departments were allocated 25billion rupees during 2012-2013 for execution of several urban development projects relating to roads, buildings, home construction, sanitation and water supply. Rapid rise in population and growing urbanization has increased the stress upon existing infrastructure and demands expansion of urban services, so urban development policies in 2014-2015 will focus on provision and sustainable expansion of housing facilities with private sector's help (Ministry of Planning, Development and Reform Annual Plan, 2013-14).

Institutional Arrangements to Deal with Urbanization; Challenges and Aspects of Institutional Inefficacies

According to economic theory when resources are reallocated to high productivity (manufacturing and services sectors) from low productivity (agricultural sector), structural transformation takes place. For location of industrial and services sectors urban areas and cities are crowd-pullers. Pakistan suffers from the casual nexus of unsatisfactory execution, weak law enforcement, impractical planning, poor financial condition of city governments and overlapping jurisdictions which titled the balance towards negative externalities agglomeration. Breaking this casual nexus is the foremost challenge for urbanization management. If there are no governing mechanisms then inferior and high-priced transport, urban slums, insufficient municipal utilities, considerable infrastructure gap would continue to linger. However the 18th constitutional amendment*** in the economy transferred power from Federal to provincial financial resources for better management of urban resources.

Other crucial challenge is the assortment of sustainable urban public finances. Increase in urban population inflicts burden for enlarging sewerage, expanding urban infrastructure, water, sanitation and public transport facilities. Number of people paying taxes for these facilities keeps on decreasing as urban population is increasing. People already paying taxes are asked to pay more while receiving low quality facilities in return. Some of these people often migrate to suburban areas where tax burden is low. Further reduction in growth of taxes in the country is because of tax evasion by using connection or influence or by bribing the officials. The third major issue is the initiation and inspection of urban development plans and projects for all vital cities and urban settlements throughout the country. Problem appears when urban plans are not executed and remain a piece of paper as law enforcement rarely takes place due to corruptive motives, malpractices, biasness and favoritism existing in control authorities. There is a need for good governance.

Research Concerns and Study Objectives

This study aims to determine the impact of unplanned & unregulated urban growth, appearing in the form of urban sprawls & leapfrogging upon institutional inefficacies & institutional delinquencies ^ associated with Pakistan are valid and relevant for exploring significant role-playing elements causing inefficient land allocation and urban sprawl in the country. This specific aspect has not been discussed, explicitly and using econometric modelling in scholarly literature, on Pakistan.

***18th constitutional amendment in Pakistan was passed by National Assembly of Pakistan on April 8, 2010 which removed power from Federal government to Provincial government( to parliamentary republic from semi-presidential republic) for easing political instability in the economy (Higher Education Commission Pakistan)

m Lawlessness, misconduct or negligence of institutions (Organizations, authorities, governments, judiciary) pertaining to some issue (Liska and Reed, 1985)

Analytical and Modeling Choices

This section of the paper will report the theoretical justification, relationship between variables, the expected signs, and model specification like how the collection of data has taken place, quantified and used. The following variables under discussion will be justified by the literature review. Three models have been flourished to inspect the regularity of signs and explain the results following the title of the thesis. The main regressors in the model are urban sprawls & the leapfrogging phenomenon.

Leapfrog Development, Institutional Arrangements and Range of Institutional Inefficiencies

Rather than through an ordered and balanced process of urban expansion, planners construct homes in continuous leaps. They jump over estates to acquire land away from metropolitan area at the city's edge leaving unoccupied and unfilled parcels of land in the way. This process of leapfrog development is one symptom of urban sprawl. With time cities have expanded and growing sprawl has stimulated apprehension regarding environmental deterioration and reduction of farmland and open space. Several studies on urban sprawl attempt to find its reasons and evaluate its benefits and costs. Leapfrog development is considered as a manifestation of urban sprawl that also incorporates low density development, strip and ribbon development and dispersed development. A major incentive for leapfrog development is inexpensive cost of land at the outskirts or border of the city. Capital gains are a main part of a constructor's return. In addition to economic conditions like increase in income level, improvement in technologies that affect industrial location, federal homes mortgage credit programs that encourage growth of low density suburban areas, transportation subsidies advocating public transport and private automobile and treatment policies for example waste treatment systems, promote leapfrog development that generates urban sprawl (Raup 1975; Jackson 1985; Ewing 1994; Burchell et al 1998).

In a lot of scenarios, the two participants of land markets (people looking for homes and developers) does not have complete information about the exact social benefits and costs associated with their decision regarding urban build out. This lack of information is one of the reasons leading to inefficient utilization of urban fringe land (Archer, 1973).

A collection of literature has been attributed towards explanation of leapfrog development and its relation with urban sprawl. Leapfrog development is often cited as discontinuous development or urban development occurring at intermittent leaps. Conjecture between developers, in which land near to the city center is suppressed from development. So that it may be developed at a greater density in the future is considered as a major factor of this kind of urban development and there is empirical evidence supporting this (Peiser, 1989).

Alternatively leapfrog development is induced by localized pattern of present land uses such as via overcrowding externalities from contiguous development (Irwin and Bockstael, 2002) in preference to facilities affiliated with open space (Turner 2003; Wu and Plantinga 2003) and these externalities associated with land use3 are important contributors to inefficient urban growth. Dissimilarity in topography and quality of land has also been conveyed in the literature as feasible reason for leapfrog development (Fulton et al. 2001; Harvey and Clark 1965).

Additionally, leapfrog development promotes low-density development which is a characteristic of urban sprawl. Low-density development occurs when the concentration of people living in an urban area is low or when there is less number of people living on a comparatively larger land area. Moreover, perceived ills of urban development like lower education quality and high crime rates force people to live in low-density suburban areas that offer better public services (Mieszkowski and Mills, 1993).

Coordination failure and fragmentation of local governments also increases the spread out of people across the urban center. Variety of evidence supports that fragmentation of the government causes low-density urban development (Razin and Rausentraub, 2000).

Land Transformation, Land Conversion and Institutional Delinquencies

One of the attribute of sprawl is the evolution of land from forest and agricultural to developed urban land. As population is increasing, the requirement or demand for food production and housing is also rising. So forests are cut down and converted into farms for more food production and agricultural land is converted into urban land to construct more homes. The prospects of urban sprawl are increasing due to this land conversion. Large patches of land are utilized for construction of homes and urban development and if this new urban development is not administered effectively and regularly then this would lead to imperfect urban growth. New urban development on agricultural land requires the extension of public services and in order in to extend the public services like sewer, water supply and natural gas pipe lines government raises the amount of taxes for providing the necessary services. Famers are unable to pay high amount of urban taxes therefore they are forced to sell their land to development authorities. This encroachment of rural land for urban development is stimulated by interrelated anxieties. These interrelated anxieties include: 1) runaway urban development which is economically prodigal as there are many costs associated with runaway urban development that include costs of construction, transportation and provision of city services; 2) urban expansion which is depriving the country of its ultimate agricultural and forest land; 3) Aesthetic abomination of urban sprawl that is deteriorating the environment and ruining the shape of towns and cities (Hart, 1976)

Rapidly urbanizing area faces many considerable problems in preserving the supply of public goods like forests, scenic amenities, open spaces and parks. Various studies have shown that preservation of scenic amenities increases the value of land or property. This suggests that people place a favorable value on the open spaces. This also helps to reduce the urban development, as the value of land rises, the willingness to pay for the land decreases which in turn reduces the demand for urban development and chances of urban sprawl. But due to growing pressure of increasing population if this open space is not protected and transformed into urban land it may lead to haphazard urban expansion. (Tryvainen and Mettinan, 2000; Cheshire and Sheppard, 1995; Geoghegan, Wainger and Bockstael, 1997)

Safeguarding proper provision of forests and open spaces is one ordinary rational for regulations of land-use such as green land preservation programs and zoning. Although few forests and open spaces protection plans might foster the developers to decrease the amount of lots within the communities or subdivisions. If this happens and population continues to grow, then its consequence would be more large-scale development which would contribute to urban sprawl (Lichteberg and Hardie, 2007).

A Review of Literature for Quantification and Data Instruments for Leapfrogging, Urban Sprawl and Institutional Delinquencies

As discussed earlier leapfrog development is urban development further away from the city center. So one of the ways to quantify the leapfrog development is to calculate the distance of the urban developments that are distant from the metropolitan area or to measure a stretch of new development that is far away from the fringe of formerly existing development. Leapfrog development in this study is estimated by distance measurement of housing societies that are at a considerable distance from the urban centers of the prime cities. These distances or

tracts were then sorted in ascending order. The housing societies with greater leapfrog distance values from urban center are deemed as sprawling in contrast to those developments nearer to the metropolitan area which are viewed as less sprawling. Developments occurring at a larger distance from each other are a significant contributor to expansion and enlargement of towns and cities (Hasse, 2004).

Straight-line distance measurement method can also evaluate leapfrog development. In this method discontinuous developments or new developed patches of land from previously developed patches are assigned values and names like patch 'A', patch 'B', patch 'C' etc (patch 'A' closest to city center and patch 'C' at a greatest distance from the city center). Straight-line distance grid is then created from the formerly settled parcel to each new housing unit parcels. As the distance increases, urban sprawl also increases (Noor, Asmawi and Rusni, 2014)

One of the leading factors of urban sprawl is the lack of government or institutional concern towards this issue. Government should initiate policies to control urban sprawl and leapfrog development. These policies not only include management of urban development or housing sector but also providing better education and civil services. The potential for sprawl increases when even effective policies are implemented inefficiently; there is inability of various strategies to strengthen each other, coordination failure between federal, provincial and local governments or among communities with jurisdictional control and less stakeholder involvement throughout implementation or planning. These institutional delinquencies are a major source of urban sprawl because without a systematic government and well organized institutions there will be no efficient policy execution which would increase the level of sprawl^.

Data Instruments and Data Collection Preferences

In order to cater the macro foundation of urban sprawls & leapfrog development, the reference period from 1997 to 2013 has been used for estimation of robust regression and the generalized least squares models. Specification of econometric models includes quantification of the regressand in form of institutional delinquencies in urban development authorities (estimated in form of conviction rate: ratio of the disposed of cases filed against urban development authorities, to all registered cases of misuse of public office by Urban development authorities), while key regressors are road sector energy consumption, land transformation (supply side proxy for urban sprawl), housing rent index/ urban population growth rate (demand side proxy for pressure on urban areas in form urban sprawl) and property registering costs.

The data on institutional delinquencies affiliated with urbanization was taken from federal ombudsman report (Wafaqi Mohtasib)§§§. The ombudsman report shows all complaints filed against the urban development authorities of Pakistan as well as the disposed of cases. These complaints include issues like bribes & nepotism, weak property rights, institutional negligence with respect to land and housing settlement problems, lack of urban planning in sewerage and sanitation infrastructure etc. In order to ensure high generalizability, data is complied from development authorities (Lahore Development authority, Karachi Development Authority, Capital Development Authority, Peshawar Development Authority & Balochistan Development Authority).

Among regressors 'distance of new housing schemes in kilometers is taken from metropolitan areas of the

"'United States Department of Commerce.

sssPakistan office of ombudsman - protects the rights of people besides ensuring adherence to rule of law, diagnosing, redressing and rectifying any injustice done to a person through maladministration and suppressing corrupt practices (Federal Ombudsman Pakistan)

prime cities (Karachi, Lahore, Islamabad, Rawalpindi, Quetta, Peshawar, and Faisalabad)'. It has been hypothesized that as the distance of urban development from city center increases, number of complaints against the development authorities increases as well. Due to possible occurrences of information & policy lags, in competing models, lagged impact of one year has been incorporated.

Road sector energy consumption is estimated by acquiring data from World Development Indicators. Road sector energy consumption is the total energy used in road sector including natural gas, petroleum products, combustible renewable and waste and electricity. Road sector energy consumption is taken in kilo tone of oil equivalents. It has been hypothesized that as road sector energy consumption increases, demand for extension of urban facilities exerts pressure on institutional delinquencies.

The data on housing rent index is utilized from Pakistan Bureau of Statistics reports on pricing statistics where the Housing rent index comes under housing group of commodities in Consumer Price Index. An increase in housing rent increases the welfare of developers so they try to find the cheapest way to establish urban developments which they usually develop far from municipality where land is inexpensive in order to boost their welfare, increasing the chances of sprawl.

land transformation: Agricultural and forest land as a percentage of total land area, the World development indicators data represent the supply side response of urban sprawl. The data shows a decreasing trend over the years which exhibit that agricultural and forest land areas in the country are diminishing probably because urban development is taking place on these land areas which is converting agricultural and forest land into developed land increasing the possibility of urban sprawl. Such land transformation from forest to urban land, hamper sustainability of urban development.

Urban population growth rate the demand side proxy for Urban sprawl and the data is taken World Development Indicators.

Property registration cost is calculated as cost (percentage of property value). Higher the property value, higher will be its property registering cost. In Pakistan the property registering cost is increasing in most of the years under study, so an increase in property registering cost decreases the demand to buy real estate. As registering cost is the percentage of property value, increasing trend of registering cost suggest that prices of real estate are also rising in the economy that further decreases demand for property buying. Property registering cost is lagged by one year in the models as it takes time, paper work and legal framework to register the property and transfer the ownership of property to other person. In some cases due to institutional lawlessness and weak property rights, land ownership issues persist for larger period of time.

Specification of Alternative Econometric Models Model 1: Robust regression

Robust regression has been preferred on apprehension of heteroskedasticity, as the intensity of the relationship between the regressand as the regressors may slightly vary, over time and over different phases of urban development experience. In such circumstances, Robust regression gives robust standard errors and reliable unbiased results. Robust regression is assigned weights and can detect outliers in the model. Property registering cost in the model is lagged by one year to incorporate the time lag associated with registration of real estate.

Functional form ofModel:

Y = Institutional delinquencies in urban development authorities (estimated in form of conviction rate: ratio of the disposed of cases filed against urban development authorities, to all registered cases of misuse of public office by Urban development authorities)

Xl= Road Sector Energy Consumption

X2 = Land Transformation

X3 = Leapfrog Development: (distance in km of housing societies away from urban areas) X4 = Housing Rent Index X5 = Property registering cost E = Error Term

Institutional delinquencies (Conviction rate estimated for urban development authorities) = / (Road sector energy consumption, Land transformation, Leapfrog development, Housing rent index, Property registering cost)

Mathematical Form of Model:

Y = Po + p\X\t + P2X2t + P?>x?>t + + fjt

Institutional delinquencies in Urban development authorities = p0 + fiiRoad sector energy consumption t + fi2Land transformation t + ftLeapfrog development tt+ ftHousing rent index t+ ft¡Property registering cost t-1 + Et

Where t-l = lagged by one year****

Partial derivatives shows change in Y caused by one unit change in X. p represents the amount of that change Example:

This shows the change in urban sprawl caused by one unit change in road sector energy consumption. Here pi represents the amount of change caused by road sector energy consumption.

Model 2: Generalized Least Square

Generalized least square (GLS) is used on apprehension of serial correlation in the data which might arise due to lagged impact of regressors upon the regressand.

Property registering cost is lagged by one year in robust regression model

Functional Specification:

Y = f(X1, X2, X3, X4, X5)

Y = Institutional delinquencies in urban development authorities (estimated in form of conviction rate: ratio of the disposed of cases filed against urban development authorities, to all registered cases of misuse of public office by urban development authorities)

Xl= Road Sector Energy Consumption

X2 = Land Transformation

X3 = Leapfrog Development: (distance in km ofhousing societies away from urban areas) X5 = Property registering cost X6 = Urban Population Growth Rate ^ = Error Term

Institutional delinquencies related to urbanization = f (Road sector energy consumption, Land transformation, Leapfrog development, Property registering cost, Urban population growth rate)

Mathematical Specification:

t = pt-i + fit

Also equals Yt = fio + fiiXit + pt-i + ft (1)

pYt-i - pPo + pfiiXit-i + p--i (2)

To derive second equation we multiply the first equation by p.Although If we remove pt-i from the equation, there will be no autocorrelation.

Subtract equation (2) from equation (i), we will get the new equation, that is equation (3).

Equation (3) is free from serial correlation

Y, - pYt-i - fiOo (i-p) + Pi (Xlt - „ Xi,-i) + f, (3)

Equation 3 can be rewritten as:

Yi* = Po* + PiXi*+---------ft (4)

Y = P0 + p\.%\t + P2X2t + pi,xit + P4%4t + et

institutional Delinquencies (estimated by the conviction rate: The ratio of the disposed of cases filed against urban development authorities, to all registered cases of misuse ofpublic office by Urban development authorities) (Federal Ombudsman Report) = Cons + fjyRoad sector energy consumption + fis Land transformation + fiç Leapfrog developments fiw Property registering costt-i +fi11Urbanpopulation growth ratet + et

Where t-1= lagged by one yearffff

Model Estimates and Analysis

Estimates ofRobust regression and Generalized Least squares are mentioned and discussed in respective sections.

Table 1

Regressand: Institutional Delinquencies (estimated by the conviction rate: The ratio ofthe disposed ofcases filed against urban development authorities, to all registered cases ofmisuse ofpublic office by Urban development authorities) (Federal Ombudsman Report)

in Robust Regression Generalized Least Square(GLS)

Road Sector Energy Consumption (kilo tone per oil equivalent - World Development Indicators data) 0.0298113*** (21.86) 0.0887049*** (4.9)

Land Transformation (forest land as a percentage of total land + agricultural land as a percentage of total land - World Development Indicators data) 80.11104*** (43.83) 86.92358*** (3.33)

Leapfrog Development (distance in km of housing societies away from urban center) 1.190007*** (7.85) 3.255696** (1.65)

Housing Rent Index (CPI - category of housing, water, electricity, gas and fuels (Pakistan Bureau of Statistics data) 4.310408*** (61.38)

Urban Population Growth Rate (growth of urban population in percentage - World Development Indicators data) -168.5008*** (-3.34)

Property Registering Cost lagged by one year (proportion of value ofproperty) -20.63172*** -33.36748**

mt Property registering cost and Leapfrog development is lagged by one year in generalized least squares model

! (-20.11) j (-2.05)

N (observations) ; 16 ; 16

Goodness of Fit Estimates

R2 0.9999 -

Adjusted R2 0.9998 -

Prob > F 0.0000 -

Prob > chi2 - 0.0000

Model Consolidation Estimates

Breusch-Pagan / Cook-Weisberg Test for Heteroskedasticity Chi2(1) = 4.32 Prob > chi2 = 0.0378

Durbin Watson (d-statistic) - (6, 16) 2.349351

VIF 9.54 -

Below the coefficient value, in () parentheses we report z/t-statistic. * denotes significance at 10 % level, ** denotes significance at 5 % level while *** denotes significance at 1 % level.

Estimates of Robust regression as well as of Generalized least squares, using the coefficient of determination, adjusted coefficient of determination, the F ratio and chi2 entail that both the models have high explanatory power. The value for Prob > is 0.0000, this indicates that data points are very closer to the regression line.Durbin Watson test imply that generalized least squares (GLS) does have give any conclusive evidence about the presence of serial correlation existing in the model.

Analysis and Findings: Impact of Leapfrogging Upon Institutional Delinquencies

Impact of leapfrog development is found significant at 1% level, in both the estimated models; imply that the greater pressure of leapfrogging exert greater pressure on inclination of urban development authorities to be inclined & involved in some sort of misuse of the public office, causing inefficacies & delinquent behaviour. Leapfrog development occurs because of high crime rates and poor schools inside the city. Some other causes of leapfrog development include subsidized low cost transportation system, or when high income earners demand to live in a cleaner environment and less restrictive property regulation which would significantly impact the level of urban sprawl in the economy. These new housing schemes not only include privately owned schemes but also government owned schemes that often have very low property rates or have a policy to sell the property to government officials at a lower rate. This shows the level of institutional inefficiency instead of discouraging urban development in the outskirts of the city, government is promoting it. This is specially favoring urban sprawl.

Analysis and Findings: Urban Sprawls and Institutional Delinquencies

As discussed in data notes, land transformation assess the supply side response of urban sprawl), while housing rent index/ Property registration cost & urban population growth rate assess the demand side pressure on urban sprawl).

Land transformation has the expected sign as it has a positive direct relationship with urban sprawl in Pakistan. The amount of agricultural and forest land in the country is decreasing, this is because the agricultural land is converted into urban land and forest land is converted into agricultural land. As population is growing rapidly there is increased demand for food and urban development to cater the needs of increasing population that is why forest land is being transformed into agricultural land for more food production while agricultural land is being transformed into urban land for settlement of the people. As more urban land is produced by transforming agricultural farms into developed urban areas and if those urban areas are not managed properly like in Pakistan where concerns for urban sprawl are low, it will definitely lead to bad urban growth hence increasing urban sprawl. In Pakistan there is an increasing trend of agricultural to urban land conversion. Many cities have farms in the outlaying areas and when these cities expand, development companies or authorities pay high amount to the farmers, to buy the land and develop it into urban area. Farmers' willingness to sell the land increases when they receive great sum of money thus increasing land conversion and prospects of urban sprawl.

Property registration cost is significant at 1% level and has a negative sign this indicates that property registration charges have a negative impact on urban sprawl. This is because property prices in Pakistan are booming which is also increasing the property registration cost, as property registration cost is the proportion of value of land and as value of land rises, property registration cost also increase. This increase in the property registering cost decreases the demand to purchase new land and construct homes. Therefore the demand for housing falls, reducing the potential for urban sprawl. This variable is lagged by one year because the process of property registration takes time.

Exponential Econometric Modeling and Other Choice Variables

An increase in road sector energy consumption also increases the urban sprawl. Road usage in Pakistan is increasing, which indicates that number of vehicles used for traveling in the country is increasing. This also leads to more infrastructure investment in the economy specially investment in roads network. More investment in roads network causes more dependence upon vehicles to travel. In Pakistan urban sprawl is directly affected by infrastructure investment and road usage as it leads to more urban development and expansion of the cities. The road sector energy consumption in the country is increasing over the years which indicate that urban sprawl is alsoincreasing.

The relationship of housing rent index with urban sprawl is also positive. Due to increase in housing rent, the welfare of developers also increase. People pay high amount of rent to the home owners and developers which increase their gains. Developers reinvest their gains in new urban developments and try to find cheaper land to earn maximum profits and this inexpensive land they usually find far away from city center. In Pakistan the housing rent index is increasing. This is because value of real estate is rising in the country so costs of acquiring property or land increases as value of property rises. Moreover there is high inflation in the economy. An increase in general price level and land costs is reflected in the housing rent index. Developers or home owners charge more rent due to increase in inflation and costs of obtaining the land or constructing homes.


One of the lessons to be drawn from past years data and leapfrog development in Pakistan concerns the institutional ineffectiveness to control such developments (or urban sprawl) regardless the presence of resources and management tools. As discussed, intentions associated with land use planning were not executed efficiently and poor urbanization management contributed to leapfrog development as well as urban sprawl. Although it is not understandable to what degree responsibility of Pakistan's growth trend lay with poor urbanization management against institutional delinquencies regarding urban development or absence of political will affiliated with urbanization.

Proposed Policy Framework & Limitations of the Study

Urban growth boundaries (UBGs)**^ can help to decrease the leapfrog development. UGBs preserve the open space and land around the city may it be forest or agricultural land. It also prevents the cities from expanding by limiting their area.

Secondly government should promote the revitalization of existing urban areas and urge developers to reinvest in prevailing towns rather than constructing new towns. Furthermore in order to decrease land conversion government should purchase farmland or open spaces for preservation or pay farmers to keep on farming so that farmers may not sell their agricultural land to developers or the development authorities for urban development.

Smart growth policies should be used as these policies can provide a solution for urban sprawl. Smart growth policies include a framework of policies that encourages urban development distinguished by preserved green land, high urban population density, availability of mass transit, limited construction of roads and mixed development (development projects that include commercial and residential uses).

Another strategy to prevent urban sprawl is to forbid housing construction in the outskirts of the city this could be done by limiting the management boundaries for city services like sewer, water supply, electricity and natural gas. Limiting the management boundaries for city services also assists in decreasing the leapfrog development. Simply creating awareness in people about bad outcomes of urban sprawl can also aid in reducing the level of urban sprawl. One more way to slow down urbanization is to reduce the population growth rate as there would be less population, there would be less need to build homes. We can reduce the population growth rate by introducing birth control system and educating the female population of the country.

Zoning laws should be introduced as they are also important for reduction of urban sprawl. Zoning creates weaker low-density communities, more pollution and traffic congestion. Therefore laws should be introduced to mange zoning. These are some of the best approaches to deal with urban sprawl however there are many other policies and measures that could handle the issue depending upon the characteristics and condition of the economy.

The data for land conversion was missing for the year 1997 on multiple data sources, so it has been interpolated using fifth degree parabola. As natural volatility of the data is lost for the duration of the interpolated time duration, there is apprehension that model estimates may be slightly upward biased.

,,,t Urban growth boundary is the geographical boundary that is set to limit the urban sprawl by authorizing the area inside the boundary to be used for high density urban development. This restricts the unnecessary expansion of the city and prevents the encroachment of rural and agricultural land.


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