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Research at the intersection of development and spatial economics is increasingly important to address pressing issues in rapidly-urbanizing cities in low- and middle- income countries. This handbook chapter presents the canonical spatial model and then explores it through the lens of development economics, pointing out the "on-the-ground" facts of missing markets, frictions, and context-specific parameters that are often absent in applications of the model. We then discuss what the existing literature and the spatial model tell us about the optimal allocation of labor across space. We close by highlighting exciting possibilities for future work that integrates the spatial model with the reality of low- and middle-income countries.