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We find that per capita municipal spending on public services is strongly and non-linearly correlated to urban population density. Optimal expenditure levels for municipal services are achieved with densities close to 9000 residents per square kilometre. In our study of about 8600 municipalities of Brazil, Chile, Ecuador and Mexico, 85% of all municipalities are below this ideal density level. This result provides strong policy support for densification, particularly in medium-sized cities of developing countries, which are currently absorbing most of the world’s urban population growth.

work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/ licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any noncommercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that the link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.Contact: Laura Jaitman, ljaitman@iadb.org Roberto Guerrero Compeán, rguerrero@iadb.org

No abstract