Marketplaces remain a widespread way of trading in rural areas of low-income countries. How do these gatherings shape development around them, and how can they be leveraged for rural transformation? Focussing on Kenya, I find that fewer marketplaces operate today than in 1970. At the same time, they formed nuclei of rural towns, especially so away from larger cities. To derive policy implications, I extend a model of rural-urban trade with marketplaces that aggregate sparse supply and demand and enable scale economies in transportation. The model explains when new markets emerge, why some decline, and which complementary policies catalyze marketplaces for local development
STEG Project Policy Brief
• Research Theme 0: Data, Measurement, and Conceptual Framing,
Research Theme 4: Trade and Spatial Frictions,
Cross-Cutting Issue 3: Inequality and Inclusion
Focal Points of Market Access: How Marketplaces Shape Rural Development over 50 years
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