When Does a Village Become a Town? Revisiting Pakistan’s Urbanization Using Satellite Data Oscar Barriga CabanillasMarziya FarooqMoritz MeyerChristina Wieser Poverty and Equity Global DepartmentOffice of the Chief EconomistOctober 2025 Policy Research Working Paper11247 Abstract This study revisits Pakistan’s level of urbanization using sat-ellite imagery and the Degree of Urbanization methodology.While official statistics report that 39 percent of the popula-tion resides in urban areas, this analysis reveals that the truefigure is closer to 88 percent. The substantial discrepancyarises from Pakistan’s reliance on administrative boundariesthat do not reflect actual population density or settlementpatterns. The findings indicate that secondary cities andperi-urban areas—not megacities—are the primary driversof recent urban expansion and are systematically overlooked by the official classifications. The discrepancy between func-tional and administrative classifications of urban areas hasimportant fiscal and planning implications. Misclassifiedareas reduce property tax revenues and undermine theplanning and provision of critical public services. Moreover,misclassification distorts spatial socioeconomic indicators,masking the true extent of urban-rural disparities andcomplicating the design of effective, evidence-based publicpolicy. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. When Does a Village Become a Town? Revisiting Pakistan’sUrbanization Using Satellite Data1 Oscar Barriga CabanillasMarziya FarooqMoritz MeyerChristina Wieser Keywords: Urbanization, Pakistan, land use.JEL codes: P25, R14. 1This paper is a product of the Poverty and Equity Global Practice. It is part of a larger effort by the World Bank toprovide open access to its research and make a contribution to development policy discussions around the world. PolicyResearch Working Papers are also posted on the Web athttp://www.worldbank.org/prwp.Oscar Barriga-Cabanillas(corresponding author) may be contacted atobarriga@worldbank.org. The authors want to thank Zishan Karim, ShahnazArshad, Gailius J. Draugelis, and Vasudha Thawakar for their insightful comments, and to Lydia Teinfalt for her researchassistance on an initial draft and data compilation. We declare that we have no relevant or material financial interests thatrelate to the research described in this paper. The findings, interpretations, and conclusions expressed in this work do notnecessarily reflect the views of The World Bank Group or any affiliated organizations, its Board of Executive Directors,or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Introduction Pakistan’s official classification of what areas are urban is determined by municipal committees. Thesehave the authority to designate areas as urban; however, this decision is not based on objective measureslike population density, service access levels, or economic function. The last use of objective metrics todefine urban centers was in 1972. Since then, the rapid population growth and spatial concentration havesignificantly transformed the country's urban landscape compared to 50 years ago. Urban classifications shape fiscal policy, planning, and statistical reporting, yet Pakistan’s definitions haveremained unchanged since 1972. We leverage satellite imagery to revisit the distribution of the country’spopulation between urban and rural areas. For this, we use the Degree of Urbanization (DoU)methodology, which uses remotely sensed data on population count and density to provide a high-resolution view of current urbanization levels. A key advantage of our approach is that it is collected andcalculated independently of pre-defined administrative boundaries, providing a more nuanced view ofthe urban landscape.2 Our results show that, while official statistics indicate that 39 percent of Pakistan’s population is urban,when considering population density and concentration measures, this figure rises to 88 percent. Thisoccurs as official classification captures the largest urban centers but fails to recognize the urban characterof growing peri-urban areas that have emerged from rural areas and now host 42 percent of thepopulation. Additionally, we discuss how mirroring the urban expansion of Pakistan with the developmentof “meg