The Economics of Uniqueness: Embracing Cultural Heritage

In a world where more than half of the population already lives in cities and more than 90 percent of urban growth is occurring in the developing world, cities often struggle to modernize without losing the unique character embodied in their downtowns and historic cores.

A series of studies in a new book, The Economics of Uniqueness, show how embracing regeneration of downtowns and adaptive reuse of their assets can pay off in many ways for rapidly expanding cities and their populations. Through the insights of leading scholars and practitioners in heritage economics, the book presents the most current knowledge on how these assets can serve as drivers of local economic development.

“The past can become a foundation for the future, providing crucially needed continuity and stability, as well as economic benefits,” explain Guido Licciardi and Rana Amirtahmasebi, the editors of The Economics of Uniqueness.

The Value of Heritage

Reusing built assets and regenerating underutilized land in central locations ties into the best practices of inclusive green growth, the pathway to sustainable development.

The benefits of investing in downtowns and their heritage for livability, job creation, and local economic development have been increasingly studied and debated over the last few decades, and the economic theory underpinning investment is becoming substantially more robust, as well as financing tools to make it happen.

A city’s downtown can differentiate that city from competing locations, branding it nationally and internationally and helping it attract investment and talented people. Studies show that the cities that are the most successful at attracting investment and businesses to meet the aspirations of their citizens, while alleviating poverty and promoting inclusion, are those that are able to harness all of their resources -- including the heritage in their historic cores.

“Heritage anchors people to their roots, builds self-esteem, and restores dignity. Identity matters to all vibrant cities and all people,” says World Bank Vice President for Sustainable Development Rachel Kyte.

Safeguarding Zanzibar’s Stone Town

The Economics of Uniqueness aims to inform, inspire, and encourage the conservation of historic cores and heritage for economic development worldwide.

In Zanzibar, for example, the national government and the World Bank are working together on a project to improve access to urban services while conserving Stone Town’s traditional seafront and safeguarding its World Heritage status.

A World Bank project is supporting the rehabilitation of Stone Town’s sea wall and the refurbishment of the adjacent Mizingani Road, which are both in danger of collapse. The project conserves and enhances the value of the properties, avoids the higher replacement costs if the sea wall were to collapse, bolster’s Zanzibar’s urban livability, and helps develop tourism.

The investment presents a discount rate of 12 percent, and an internal rate of return of 47 percent, which indicate that it is desirable to invest in the rehabilitation of the sea wall and road, the book’s editors explain.

Conservation Pays Off in Pakistan

In Pakistan in the 1980s, many buildings and much of the infrastructure of the Walled City of Lahore were at risk, threatened by overcrowding, inappropriate zoning, pollution, and physical decay. The government, with the World Bank’s assistance, sought to improve the city’s basic infrastructure and demonstrate the value of coordinated area upgrading.

Because of the important cultural endowments in the downtown, the project also supported heritage conservation including sanitation, restoration of schools and community centers, and conservation of city gates and buildings in the historic city core, the space where the identity of the local communities is rooted.

An evaluation after the project was finished found that property values had increased, fostering business activities, private sector investments in housing, retail, and service more in general, and improving service delivery.

The World Bank’s Role

The World Bank Group has a robust practice in historic city cores and cultural heritage, with close links to natural heritage and sustainable tourism. Since the Bank began working in this area in the 1950s, it has committed about $9.5 billion in some 600 projects and technical assistance around the world, covering cultural and natural heritage and sustainable tourism. Of these, some 150 projects are currently underway in low- and middle-income countries.

Staff members working on these projects, about 130 in total, can exchange knowledge across regions through an active community of practice, the World Bank’s Cultural Heritage and Sustainable Tourism Thematic Group.