Origin of power laws and their spatial fractal structure for city-size distributions

City-size distributions follow an approximate power law in various countries despite high volatility in relative city sizes over time. Our empirical evidence for the United States and Japan indicates that the scaling law stems from a spatial fractal structure owing to the coordination of industrial locations. While the locations of individual industries change considerably over time, there is a persistent pattern in that more localized industries at a given time are found only in larger cities. The spatial organization of cities exhibits a hierarchical structure in which larger cities are spaced apart to serve as centers for surrounding smaller cities, generating a recursive pattern across different spatial scales. In our theoretical replication of the observed regularities, diversity in scale economy among industries induces diversity in their location pattern, which translates into diversity in city size via spatial coordination of industries and population. The city-size power law is a generic feature of Monte-Carlo samples of stationary states resulting from the spontaneous spatial fractal structure in the hypothetical economy. The identified regularities reveal constraints on feasible urban planning at each regional scale. The success or failure of place-based policies designed to take advantage of individual cities’ characteristics should depend on their spatial relationships with other cities, subject to the nationwide spatial fractal structure.