This study examines the links between urbanization-related factors (crowding, access to institutions, and socioeconomic status) and cognitive development in young children (3-5 years old) in Bhutan, a rapidly urbanizing country in the Global South. Using Structural Equation Modeling (SEM) on data from 443 families, we find that SES is the strongest predictor of cognitive development, while crowding and institutional access had minimal effects. Higher parental education and income correlate with better cognitive skills, emphasizing SES's crucial role in child development. These findings challenge the assumption that urbanization inherently benefits children by improving access to services, highlighting the persistent impact of economic disparities. This study underscores the need for policies supporting low-income families to mitigate urbanization's negative effects and suggests that these challenges stem largely from poverty, aligning with broader research on socioeconomic factors related to child development.