Inclusive institutions and local economic evolution: Perspectives from Guayaquil and Quito

Abstract

Urbanization is often related to better economic and living standards and, according to the United Nations, by the mid-21st century, 70% of humankind will live in urban areas. Currently, roughly 80% of the populations in North and South America are urbanized, compared to the global average of 55%. Meanwhile, inequality has also been increasing swiftly, and Latin America is among the most unequal regions in the world. With global urbanization and inequality trends rising, examining the urban areas of a Latin American country could shed light on potential evolution paths. Hence, this article outlines the social and economic evolution of Guayaquil and Quito, the two primary cities of Ecuador. In the 20th century, Guayaquil had economic and demographic advantages; however, Quito has since surpassed Guayaquil on several social, demographic and economic indicators. This article suggests that Guayaquil’s relative stagnation is due to an institutional framework favouring the economic and political elites and supports the argument that inclusive local processes and governance (or the lack thereof) can support (or hinder) local economic development.

Innovation systems and entrepreneurial ecosystems: Implications for policy and practice in Latin America

“…Public transportation is used by 39% of citizens in Latin America on a daily basis, compared to 23% of Europeans or less than 10% of North Americans (Daude et al., 2017). However, local planning often caters to the interest of the elites though land allocation designed to obtain real estate gains based on corruption schemes, while transportation is designed in favour of the more affluent car users (Freire-Gibb and Tapia Carrillo, 2019).…”

“…For example, in the case of Ecuador, weak local institutions are the main reason for the city region of Guayaquil’s relative economic and demographic decline in relation to the city region of Quito. More inclusive local governance is a key to more equitable development, which can go in hand with a more effective and inclusive IS (Freire-Gibb and Tapia Carrillo, 2019). Adopting a broader view of IS to include social as well as technological innovation (Altenburg, 2009; Lundvall, 1988), and of EE, to include social value accumulation as an alternative to profit-seeking entrepreneurship (Cooke, 2016) appear highly relevant for Latin America.…”

Inclusive urban entrepreneurial ecosystem policies: An application of the meta‐synthesis approach

“…We believe that cities provide a good scale for designing inclusive entrepreneurial ecosystems (see also Cavallo, Ghezzi, & Balocco, 2018; Freire‐Gibb & Tapia Carrillo, 2019). A large share of the world's population is moving to and settling in cities.…”