Economists and engineers focus on the sectoral changes that accompany economic growth and technological innovations. This is understandable when focusing on GDP and the emergence or obsolescence of industries, but it is not very helpful for understanding the impact of these changes on society and nature. The most fundamental social and economic transformation-from traditional rural to modern urban-is manifested spatially. Except in the most populous countries, such as China and India, rural societies are relatively low in density and heavily dependent on agriculture as the primary source of employment and output. Modern urban societies are generally higher in density and dependent on activities that benefit from proximity and do not require a great deal of land, such as manufacturing and services. These activities and land use patterns generate different types of sociocultural and environmental problems.

Most ecosystems, too, are defined spatially. Much flora and fauna is locally unique and adapts gradually to changes in local circumstances. Local problems and stresses appear earliest, whether in the form of local extinctions, the reduction of the ranges of many plants and animals, or soil, air, and water pollution. These changes, the result of local development pressures, do not show up at national and global levels until they accumulate, but they provide early warning of problematic consequences of current development patterns.

The jurisdictions of many institutions that make or implement rules and laws (legislatures, constitutions, and government agencies) are also defined spatially. Often, the spatial jurisdiction of institutions does not match the spatial nature of the social and environmental problems generated by economic activity-one reason for the persistence of these problems.

Given our interest in people, where they live, and how they interact with each other and with nature, it is important to look at where people are now and where they are likely to be in the future. The world's population increased by more than 3.5 billion people in the past 50 years, and 85 percent of these added people were in developing and transition countries (see Figure 1 in the Roadmap). The number of people living in fragile rural areas in developing countries doubled, in stark contrast to the declining numbers in this category in high-income countries. The number of cities with a population of more than 10 million people went from 0 to 15 in developing countries but only from 1 to 4 in high-income countries.

In the next 30 to 50 years the 2 billion to 3 billion increase in the world's population will be almost exclusively (97 percent) in developing and transition countries, and virtually all of it will be in urban areas. The growth of the urban population is driven by natural increase, rural-to-urban migration, and the incorporation of high-density rural areas on the urban fringe. The number of megacities in developing countries is likely to increase to 54, while it will stabilize at 5 in high-income countries. It is not yet clear whether the number of people living in fragile areas will continue to increase, but it probably will unless migration opportunities change. As many as 2 billion people will live in two areas that are difficult to manage: fragile rural areas and megacities. ²⁹ Dealing with these people's needs will be a major challenge, since there is not much experience in industrial countries that can be adapted to their needs.

The following are some of the key questions with local and global implications that will face the world's population over the next two to five decades:

• Will rural populations-especially those on fragile lands , in more commercially active areas, and on agricultural frontiers-be able to overcome poverty, improve their livelihoods, and adapt to new opportunities, including opportunities in towns and cities?

• Will the rapidly growing cities of the developing world live up to their potential as dynamic engines of growth and social modernization, or will they get mired in poverty, pollution, congestion, and crime?

• Will renewable resources-particularly forests, soil, water, biodiversity, and fisheries-be depleted, or will they be managed as indefinitely sustained sources of livelihood and well-being?

• Will societies be sufficiently creative, resilient, and forward-looking as they undergo sweeping transformations in patterns of growth and migration? Will they be able to promote more equitable development and cope with unexpected shocks?

• Will poor countries be able to accelerate their growth without destabilizing social and environmental stresses? Will the prospective $140 trillion world GDP at mid-century generate fewer environmental and social stresses than the much smaller global economy today?

These are difficult but important questions, which this Report cannot answer definitely. However, it identifies an approach and process that should generate more dialogue and creativity in finding answers.

The interactions among society, economy, and nature vary in the different spatial arenas, although problems across locations are linked. Productivity increases in agriculture help feed the cities. Innovation and productivity increases in the cities help raise productivity and the quality of life in rural areas. Geography matters because of the characteristics of local ecosystems, such as the cost of overcoming local diseases.³⁰ Geography also matters because of geometry in the form of connectivity and distance to central nodes and markets; the cost of transport is more important here than that of communication.³¹ Indeed, the strong association between rural poverty in remote and fragile ecosystems becomes more apparent when the problem is viewed through a spatial lens.

For this reason, the Report is organized by spatial areas that have different characteristics and require correspondingly different approaches to their development.

Fragile lands. The estimated 1.3 billion people living on fragile lands have modest assets that can help bring them out of extreme poverty, but these assets are seldom nurtured by local or national institutions. The people have land that is subject to many constraints, making it vulnerable to degradation, erosion, floods, and landslides. They possess human capital, which is handicapped by restrictive traditions, limited mobility, lack of voice, and poor access to services. This is even more true for women, who are thus the most marginal group. The mainly poor people on fragile lands also face circumstances vastly different from their counterparts on Europe's rural periphery 50 to 100 years ago. Today, international migration is highly restricted, and while rural-to-urban migration is important for them, there are limited numbers of jobs at above-subsistence wages for unskilled workers, especially in the low-growth economies. As a result, as noted above, instead of declining sharply, the number of people living on fragile lands is estimated to have doubled in the past 50 years-despite some outmigration.

Rural areas with potential for commercial crops. The problem of feeding a growing and more urban population calls for better management of the interaction with nature, particularly with respect to land and water (extensification versus intensification of agriculture). Whether or not rural families have land, water, and education is critical to their current livelihood, as well as to their ability to move to cities in the future. More egalitarian access to these assets is also crucial for determining the quality of society's institutions. A successful rural-urban transition requires the elimination of poverty for those who stay in the countryside and better preparation of those who move to the cities. It also demands protection of remaining natural ecosystems and habitats, given their central role in maintaining life-support systems and biodiversity. This latter requirement is one reason to intensify agricultural production in areas already under commercial crops and pasture. Intensification in such areas not only minimizes pressure on biodiversity and on marginal agricultural areas but also increases the food available to cities and leads to dynamic rural-urban linkages. Higher population density in these rural areas would also make investments in health and education more cost-effective and would increase the potential for off-farm employment and help farmers accept risk and innovate.

Urban areas. Cities of the developing world face a formidable undertaking, given the expected rapid rate of growth and sheer numbers of urban residents to be employed, housed, and serviced. The characteristics of periurban settlements, towns, cities, and megacities-higher density, large scale of settlement, and greater social diversity-facilitate the creation of productive employment opportunities, efficient provision of services, and access to ideas and learning. But having many people at close quarters also creates the potential for social problems-crime and social dislocation-and for environmental spillovers that pose health and safety hazards, especially for those living in neighborhoods without sanitation or drainage and in potential disaster zones. The long life of urban physical capital stock can lock in certain development paths, making changes costly. If managed well, urban areas can be the future engines of growth. If not, their environmental and social problems will be concentrated and difficult to fix.

The discussion of problems affecting fragile lands, rural commercial areas, and urban settings, and of possible solutions, is important because many public goods and externalities are local in nature and are, in principle, amenable to action at the local level. An enabling framework for local action and the principle of subsidiarity require that public goods and externalities that affect wider catchments be addressed, at higher levels-national and global.

At the national level. The political, legal, and market domain for coordinating many activities is ­frequently the nation. Many externalities spill over beyond local communities and municipalities, and even across regional boundaries. The nation is thus often the level at which interests can be balanced, either directly or by facilitating negotiation among localities. National actors may be better placed to organize the provision of public goods and to take advantage of scale economies when the beneficiaries extend beyond subnational regions. Generating a strong investment climate, including sound macroeconomic fundamentals, good governance, and basic infrastructure, requires a framework that is typically national in scope. Dismantling perverse subsidies, husbanding forests and fisheries, and curbing water and air pollution in river basins and airsheds are major national challenges. Managing foreign aid and avoiding civil conflict are other key national concerns that determine whether development is sustainable.

At the global level. Many economic, environmental, and social processes-knowledge, conflict, disease, pollution, migration, and finance-spill over national boundaries. A few of these processes generate problems that are purely global: depletion of the stratospheric ozone layer is an example. But most global problems and opportunities are experienced at the local level as well. Automobiles that pollute local airsheds also generate greenhouse gases; wetland destruction that disrupts local water resources also undermines biodiversity of global significance; new ideas that are generated in one place can benefit people in other places, near and far. The public goods nature of many of these issues and the need to address the negative externalities requires coordination across boundaries. The distinctive challenge for global issues is to balance interests and commit to solutions in the absence of a global authority.