Lessons from Gurgaon, India's Private City

48 Pages Posted: 25 Oct 2014  

Shruti Rajagopalan

Department of Economics, SUNY Purchase College; Classical Liberal Institute, NYU School of Law

Alexander T. Tabarrok

George Mason University - Department of Economics

Date Written: October 24, 2014

Abstract

In just thirty years, Gurgaon has grown from a tiny hamlet to a city of nearly two million people and it has done so based almost entirely on the private provision of public goods, including transportation, utilities, and security. In some rankings, Gurgaon is the best city in India in which to live and work (Behl 2009). Gurgaon, however, lacks important infrastructure, especially in areas such as sewage and electricity where the optimal scale exceeds that of most builders. Thus, for large-scale infrastructure, important externalities are not internalized. We examine where Gurgaon has succeeded, where it has failed, and how people are adapting to both the successes and the failures. We compare Gurgaon with other private cities built on a different model, including Jamshedpur in India and Walt Disney World in the United States. The developing world, including India, is urbanizing rapidly. We draw lessons from Gurgaon to suggest how new private cities could be built on an even-greater scale, thus internalizing externalities while still keeping the advantages of private provision.

Keywords: Private Provision of Public Goods, Urbanization, Private Developers, Gurgaon's Development

Suggested Citation

Rajagopalan, Shruti and Tabarrok, Alexander T., Lessons from Gurgaon, India's Private City (October 24, 2014). GMU Working Paper in Economics No. 14-32. Available at SSRN: https://ssrn.com/abstract=2514652 or http://dx.doi.org/10.2139/ssrn.2514652

Shruti Rajagopalan

Department of Economics, SUNY Purchase College ( email )

735 Anderson Hill Road
Purchase, NY 10577
United States

Classical Liberal Institute, NYU School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Alexander T. Tabarrok (Contact Author)

George Mason University - Department of Economics ( email )

MSN 1D3
4400 University Drive
Fairfax, VA 22030
United States
703-993-2314 (Phone)

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