This paper finds 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 when densities are close to 9,000 residents per square kilometer. In this study of approximately 8,600 municipalities in Brazil, Chile, Ecuador, and Mexico, 85 percent are below this ideal density level. This analysis provides strong policy support for densification, particularly for medium-sized cities in developing countries, which are currently absorbing most of the world's urban population growth.
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