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Assigning infrastructure development targets to city management authorities. Cities should fight for investment

Pick a list of developed cities across the globe and then list the problems the citizens of these cities are facing. You will not be surprised to find traffic and pollution on top of the list. A behavioral scientist will further add problems like, high levels of frustration, loss of productivity & etc. to the list. An economist will be more than happy to assign dollar figures to pollution, loss of productivity & etc.
Now, let's request social scientists to contribute their opinion on problems we listed above. And words like social imbalance, disparate growth within the city and country will make their way to the discussion. So, the question is what can be done to solve the problems associated with urban crowding and restore social balance.
We understand that people move to more developed cities because their hometown offers limited employment/business opportunities. And because more people re-locate to bigger cities, it exerts pressure on city infrastructure.
Most of the city authorities invest in new infrastructure to match the increased demand and I propose to reverse the trend. We should inverse this development model and ask city management to develop capacity in infrastructure before allowing any new apartment complexes or corporate office spaces to be built in a city. This model will put small cities with better infrastructure at advantage to attract businesses to set their offices there. New offices/business set up will offer employment opportunities in smaller cities. This model will lead to inclusive growth while restoring social balance.

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    Jul 20 2013: Ok, but that's closer to 'gambling', isn't it? The cities don't yet have the demand, only 'projected' demand, and yet is asking the taxpayers to invest in infrastructure to be attractive to future business - what if it never comes? You point is interesting in that it discusses how older cities have to 'retrofit' to adapt to an influx of immigration, and how poorly they have done that. But is investing in smaller communities before there's demand the answer? Would you invest your own millions with no current demand, simply on the prospect of 'being attractive' to future business? I would offer that with soon to be 9 billion people in the world, we need to focus primarily not on the infrastructure of attracting the fickle future, but on the regard we have for one another and the way we treat our fellow human beings. Then, in my opinion, the places where we live and work will transform by default.