How transport infrastructure can guide growth and create jobs in rapidly expanding cities

The world is urbanizing at an unprecedented pace—a trend more pronounced in Sub-Saharan Africa than anywhere else. Cities like Dodoma, Tanzania, are experiencing explosive growth, bringing both opportunities and significant challenges. How can we ensure this rapid expansion translates into inclusive, sustainable development and not just unchecked sprawl?

At the World Bank, we're exploring how quantitative spatial equilibrium models (QSMs) can help us understand and shape these urban transformations for the better. These models, which have gained rapid traction in academic and development circles over the past decade, offer a powerful lens through which to analyze how "spatial frictions"—think transport costs and travel times—influence economic activity and where people choose to live and work.

The Dodoma story: A capital at a crossroads

Dodoma is a compelling case study. Designated as the capital in 1973, its growth was slow but has accelerated dramatically in recent years. After the administration’s 2016 executive order to relocate the government to Dodoma, the shift unfolded gradually over the years, culminating in 2023 with the inauguration of the State House, which symbolized the full transition. By 2024, Dodoma had become Tanzania's third-largest city, with its population expected to double between 2020 and 2030.

This rapid growth, however, has largely been sprawling. The city's central business district (CBD) sits at the intersection of three major roads, each leading to one Tanzania’s major cities. These roads, often two-lane highways, serve a mix of trucks, cars, motorcycles, rickshaws, and even bicycles, leading to significant congestion and an uncomfortable experience for all users. The congestion is only set to worsen with the anticipated population boom.

A new government complex is also developing 18 kilometers away from the old CBD. While a land use masterplan exists, enforcement capacity is limited, and the dispersion of activity centers naturally encourages outward expansion.

Compounding this, Dodoma lacks crucial infrastructure, like a Bus Rapid Transit (BRT) system, to anchor and channel growth and development. This situation is typical for many fast-growing, medium-sized cities in Sub-Saharan Africa.

Paving the way for sustainable growth

To address these challenges, a World Bank-supported project aims to upgrade key transport corridors. This includes widening and paving roads, creating a bypass for trucks to avoid the CBD, and building dedicated infrastructure for non-motorized transport.

These improvements are designed to alleviate congestion and accommodate the projected growth. But what will the broader economic and spatial impacts be? This is where QSMs come in.

What Exactly Are Quantitative Spatial Equilibrium Models?

At their core, QSMs describe the interactions between households, businesses, and builders within a city.

• Households decide where to live and work to maximize their well-being.
• Businesses determine how many employees to hire and how much floorspace they need to maximize profits.
• Builders assess how much floorspace is financially viable to construct in different locations.

In equilibrium, these decisions must “add up” so-to-speak. The demand for labor and land must meet supply, with wages and rents adjusting to ensure that markets clear. Essentially, QSMs model the labor and real estate markets in a spatially explicit way.

A key advantage of this approach is the blending of economic theory with available real-world data. This makes QSMs more flexible than purely theoretical models and, crucially, less data-hungry than strictly empirical approaches. The equilibrium framework effectively substitutes some of the input data needs. In data-scarce environments, often the reality for rapidly growing developing cities, QSMs can be particularly valuable.

To lower the barriers to using QSMs, we developed a publicly available tool: PILUT

Insights from QSMs

Using PILUT, we analyzed the potential impacts of the road upgrades. We compared two scenarios for the year 2030, one "without" the World Bank project and one "with" the project, factoring in improved network speeds resulting from the upgrades. The model then simulates outcomes like population distribution, employment totals, and land use.

The aggregate results for 2030, when comparing the "with” project scenario to the "without” project baseline, are promising:

• More jobs: The project is expected to create just over 10,000 jobs in the city by 2030, a 2.3% growth compared to the scenario “without” the project.
• Boosted production: Correspondingly, the city's total production is estimated to increase by about 2% “with” the project.

More compact growth: Crucially, total floorspace per resident is expected to decrease by 1.9% “with” the project, indicating that the improved transport infrastructure can help concentrate new development, making for less sprawl and more efficient land use. 

Figure 1: Comparing the change in jobs between the two scenarios, 2030 “with” and “without” the WB project, more jobs are concentrated downtown and along the upgraded corridor towards the government center. Conversely, there's a slight reduction in job growth in outlying areas to the east and northeast.

The road ahead

The Dodoma case study clearly illustrates how strategic transportation infrastructure investments can do more than just move people and goods faster. They can actively facilitate job creation, guide urban growth towards more efficient and sustainable patterns, and ultimately support safe, sustainable, and inclusive accessibility. More broadly, QSMs and the tool we developed, PILUT, enable powerful analytics and compelling storytelling to support World Bank projects. Their ability to function in data-poor environments by integrating robust economic theory is a significant advantage.

Looking ahead, we are working to enhance how job creation is modeled, a particularly important aspect given the World Bank's focus on jobs. We are also upgrading the user interface of our QSM tool and exploring the development of similar tools for modeling regional and international trade.

By joining economic theory and innovative analytics, we can better support cities like Dodoma in navigating the complexities of rapid growth and building more prosperous and sustainable urban futures.

Yoomin Lee contributed to this blog.