URBAN exclusion refers to processes in urban areas through which individuals and entire communities of people are systematically blocked from access to rights, opportunities, and resources normally available to members of society. Irrespective of the form of exclusion, the outcome is generally to reduce someone’s standard of living or life quality with outright discriminatory acts or direct denial as one exclusionary tool. More commonly, discrimination is subtle, as when a member of a minority seeking to rent an apartment is told that a two bedroom unit is available but not the one bedroom which the customer actually wants, when in fact both are available.

‘Audits’ are systematic tests to identify subtle discrimination involving very similar majority and minority group applicants seeking the same apartment, job or service. Audits have identified the presence of pervasive discriminatory behaviour in the United States against minority home seekers for both rental and owned dwellings, against those in marginal neighbourhoods and minorities trying to purchase property insurance or obtain housing, and against minorities seeking entry level jobs.¹ Audit results are now accepted by U.S. courts and are routinely used to prosecute discriminators.

Exclusion on the basis of race, ethnicity, or economic resources is another form. Gated communities represent one example of this tendency. Typically, to reside in most such communities, a household must have the economic assets to purchase or rent a unit and to pay taxes or other fees that support the provision of high quality services. Some communities, and real estate agents selling properties in them, make clear that ‘outsiders’ are not welcome. In municipalities where public provision of basic services is problematic, gated communities can essentially be self-sufficient, furnishing everything from water to police services. Gated communities are a growing phenomenon in a number of developing nations as well as their industrialized counterparts.

Slums, probably the most pervasive and pernicious manifestation of social exclusion, result from a combination of poor public policy performance and inadequate household incomes of their residents. The list of policy failures is lengthy and includes:

* Unnecessarily high standards for sub-divisions and residential construction that drive the cost of ‘formal’ housing beyond the grasp of many families;

* The failure of utility companies to provide services, or services consistent with slum residents’ ability to pay, or to areas failing to meet sub-division standards; even where providing services may be allowed by local standards, such areas have a lower priority than ‘formal’ neighbourhoods;

* Costly and complex procedures for plot owners to acquire official confirmation of land rights, thereby making it more costly, if not impossible, to accelerate housing development through borrowing funds;

* Ineffective urban planning that in many cases isolates slums from jobs;

* Inefficient intra-city passenger transport that pressures low income workers to live in unsafe areas near the city centre where jobs are concentrated; and,

* Insufficient allocation by national government to local governments of financial resources (either taxing authority or intergovernmental transfers for infrastructure investment that can be flexibly used), decision authority, and urban development responsibility.

This paper identifies some ways to successfully address the problem and work towards the improvement of conditions in current informal areas in developing countries’ cities.

 

Although some informal settlements and urban slums are dynamic centres of micro enterprises and social interaction, they are nonetheless beset with a host of problems which constrain the aspirations of their residents to achieve a better life and contribute more to the economic, civic and social development of their neighbourhoods and the greater urban area.

In public perception, slums or informal settlements (the terms are used interchangeably here), where the residences of the poor are concentrated, are the most distinctive image of developing country cities. The UN uses five shelter deficits to measure slums: lack of access to improved water, lack of access to sanitation, non-durable housing, insufficient living area, and insecurity of tenure.²

Slums result from a toxic combination of weak governance, under-investment in basic infrastructure, poor planning to accommodate growth, unrealistically high standards for residential neighbourhoods and infrastructure standards that are unaffordable to the poor, insufficient public transportation that limits employment access, and significant poverty. To understand slums one must first understand the economic make-up of urban residents.

 

The latest estimates are that one-third of urban residents in low and middle income countries live in poverty; this is about one-fourth of all the poor in these countries. In most regions, the poor are primarily concentrated in rural areas; Latin America is an exception with two-thirds of the poor huddled in cities. Overall, an increasing share of the poor is urban located.

The percentage of poor persons in urban populations differs dramatically among regions, as illustrated in Table 1. The highest rates by a very large margin are in South Asia (76 per cent of urban residents are poor) and Sub-Saharan Africa (68 per cent). In South Asia, 80 per cent of the poor in Indian cities live in slums.

Historically, the migration of families from the countryside to cities has been an important factor in poverty reduction – both through the enhanced opportunities for migrants to cities and indirect benefits to those remaining on the land. From 1993 to 2002, the poverty rate in developing countries fell by 8.7 percentage points, of which 4.8 is assigned to rural poverty reduction, 2.3 to urban poverty reduction, and the balance (1.6 per cent) to the population shift effect.

 

While not all the urban poor live in slums, most do; nor are all people living in slums poor – some may find the economic advantages of residential location outweigh the hardships. Estimates indicate that about one billion people live in slums in developing countries – one-third of the population. The share of urban households living in slums in 2001 varied sharply by region with African cities having by far the highest incidence: Sub-Saharan Africa (72 per cent); Asia Pacific, including South Asia, (43); Latin America and Caribbean (32); Middle East – North Africa (30).³ But in no region is the incidence below 30 per cent. Little wonder that the UN Millennium Development Goals call for a significant improvement in the lives of at least 100 million slum dwellers by the year 2020.

 

In a large number of slums most dwellings are owner-occupied. Owners, who believe they are safe from eviction, incrementally upgrade over time to have walls, roofs and floors of durable materials and make other improvements. But in a significant proportion of slums, including Kibera in Nairobi, for example, occupants rent from landlords who often have legal claims to the land. Some landlords own hundreds of badly maintained dwellings and have little incentive to invest in them. For their tenants, making improvements is risky because of the absence of formal leases or other forms of tenure security.⁴

It is hard to describe slum conditions with sufficient vividness. Residents of most slums live in extremely crowded housing conditions – typical slum families inhabit one room structures of less than 300 sq ft., often partitioned only by curtains. Indoor toilet facilities and individual house water connections are rare. In such close quarters, disease spreads very quickly. The lack of privacy also means that children are exposed to sexual relations of family members at a very young age, contributing to the early onset of sexual activity found in many slum communities. This is reinforced by high levels of prostitution resulting from a lack of economic opportunities for many young slum girls and leads to high levels of unwanted pregnancies and sexually transmitted diseases (STDs) in the slums, including HIV/AIDS.⁵

Slum families, particularly in Sub-Saharan Africa, often cook with solid fuels such as bio-mass and coal. This causes indoor air pollution, leading to high levels of respiratory diseases, particularly in children. It is estimated that indoor air pollution is responsible for between 2.7 and 2.8 million deaths worldwide annually, mostly in developing countries.⁶ UN-HABITAT cites a recent study that shows multiple housing deprivations can lead to a 25 per cent greater risk of disability or severe health problems across a life span, especially if exposed to poor housing in childhood.⁷

 

Slum communities are frequently located on land unsuitable for residential purposes – occupying low lying terrain or precipitous slopes, adjacent to environmentally hazardous land uses such as polluting industry, railroad tracks and landfills. Without adequate storm drainage during the rainy season, low-lying areas, pathways and residences are subject to frequent flooding, and communities on slopes are subject to landslides and erosion of makeshift barriers. A case in point – almost every other year the 55,000 slum dwellers living in Asuncion’s river flood plain are driven from their homes.⁸

The stress caused by harsh living conditions in urban areas, particularly the slums, results in higher levels of lifestyle illnesses in the form of high and increasing incidence of alcohol and drug use, cardiovascular disease, diabetes, depression and domestic abuse.⁹ The WHO estimates that by 2030, the proportion of the disease burden represented by non-communicable diseases will increase from 44 to 54 per cent in low and middle income countries and that the poor in urban slums will suffer the most.¹⁰

 

Understanding the location of slums is important for the design of urban transport services. They are either in the city centre, close to employment opportunities, or in peri-urban areas where land is more readily available but where settlements tend to be isolated. As noted above, those in the centre often occupy land unsuitable for other purposes, such as zones subject to flooding or parts of large railroad yards. While this is the general pattern, there are African cities where the interweaving of informal and formal areas is quite intense. Most often, regardless of location, informal settlement residents have only weak rights to the land they occupy and tenant rights in such areas are severely restricted. Such uncertainty discourages residents from incrementally improving their dwellings.

In many metropolises the problems are so great and growing so rapidly that the task of achieving significant improvement in the urban fabric is truly daunting. Nevertheless, there is sufficient accumulated experience with successful programmes that one can be confident about a successful deployment of additional resources in urban upgradation programmes.

 

Slum Upgrading and Prevention: An essential first step in developing an approach to the proliferation of slums is simply raising the awareness of a country’s and a city’s political leadership about the issue through accurate information. National and city governments often turn a ‘blind eye’ to the concerns of slum dwellers until social stability is threatened or a health problem begins to spread throughout the general populace.

There is now overwhelming consensus that citizen engagement with government in decisions on programme design, prioritization of interventions, financing methods and on management and maintenance of facilities and infrastructure are critical to successful slum upgrading outcomes. Citizen engagement instills a sense of community ownership of the improvements essential to their maintenance. Although slum dwellers and community leaders know first-hand and better than anyone else what challenges they face, they may not have the requisite skills or knowledge to make informed decisions on designing sustainable upgrading programmes.

Slum prevention is at least as important as upgrading. Planning for the inevitable growth of the urban population is key. Access to secure land plots – provided by municipalities or private developers – is essential to encouraging the incremental housing construction by which a majority of the urban poor attain decent housing. The process is accelerated by access to micro-finance that permits the use of higher quality materials in making each improvement than would otherwise be possible.

Water and Sanitation: The high densities in urban areas are a blessing as well as a curse in that innovative solutions can reach far more people than they can in rural areas and municipal services can be provided much more cost effectively. Examples of successful programmes demonstrate that over time, with increased and well directed investment and improvements in policy, regulation (including community oversight) and utility operations and management, the trend of increasing numbers of urban dwellers lacking adequate water and sanitation can be reversed.

 

Transportation: Two complementary policy sets can work effectively to improve urban transport: (a) traffic and road focused regulation, management, enforcement, and institutional development; and (b) improving public transportation, broadly defined to include related land use and transportation planning.¹¹ We focus on the second here.

There are concrete examples of effective infrastructure investment planning projects that break down the isolation of peri-urban informal settlements. Some of the more impressive projects developed bus rapid transit systems (BRT) that are now fairly common in major Latin American cities but have also been implemented in Jakarta and Chinese cities. BRT involves reserved lanes for buses and bus depots (instead of traditional bus stops) where passengers purchase tickets before boarding and where multiple buses can load and unload simultaneously.

Discrete projects and programmes across a range of sectors can be successfully executed in municipalities. The reality, however, is that these projects and programmes often succeed in spite of the broad policy environment in which they are implemented, rather than being facilitated by it. Donors circumvent these problems by demanding special operational arrangements for their projects. For its slum upgrading projects, the Inter-American Development Bank (IDB) requires the national government transfer project funds to the municipality; procurements to be done by the municipality following IDB regulations; a qualified technical staff to be in place for the project; and a single decision point be established for all project aspects (water, land, etc.), which is usually the municipal planning department. Not surprisingly, a continuing challenge for municipalities is in ‘scaling up’ demonstration projects in the absence of special provisions to activity levels that significantly mitigate the problems addressed, such as slum upgrading or prevention.¹²

 

This section briefly addresses four policy blocs whose shortcomings often inhibit local governments from achieving greater success. Sometimes municipalities control these policies but most often the constraints are imposed by national legislation. Working with municipalities and national governments to design and implement better policies is thus the single most productive action the donor community can take to enhance the impact and sustainability of interventions.

Municipal governments in developing countries are typically allocated a limited core set of service delivery responsibilities in areas like firefighting, refuse collection, parks, traffic management, local transit service, primary and secondary education and public health. Even for these core services they have to rely on higher levels of government for capital expenditures.

National ministries for water, transportation and other types of infrastructure not only control the allocation of funds to local governments for new capital investment projects but often, also their designs. Most countries lack a Ministry for Urban Development, but even where one exists the key infrastructure agencies are not subordinate to it. In reality, the Ministry of Finance or Ministry of Planning is the key player in deciding on the type of urban investments funded. Typically, these ministries lack expertise or sufficient staff to develop such programmes – which probably creates a bias against comparatively complex transportation, slum upgrading and other major infrastructure projects in the largest cities. The result is extreme fragmentation in municipal-national government relationships – relationships that are typically made even more complex by regional governments also having an active role.¹³

 

Efforts by local governments at comprehensive planning within such a fragmented framework are extremely complex and time consuming owing to the number of players involved and the limited powers cities have. This often result in partially developed plans. The situation also creates the distinct possibility of a series of uncoordinated investments working against each other in determining a city’s future development. A clear policy improvement would streamline these intergovernmental relationships with municipalities leading a comprehensive planning process that includes all relevant government agencies.

The planning environment of municipalities is at the best of times difficult. The structure of government finances generally only makes it worse. A common situation is that municipalities have little authority to raise revenues themselves and have instead rather to rely on grants from and direct service provision by higher government levels. Sub-national governments in most countries collect well under 20 or sometimes even 10 per cent of total revenues and spend about the same amount. India and China, with their federal systems are exceptions – although local governments in India spend under five per cent of the total because of the dominance of state governments.¹⁴

 

Multiple problems stem from the current arrangements. One is the uncertainty of local government revenues. This is particularly severe for investment funds, but can be problematic even for basic operations. At least as important, such deep dependency makes it impossible for local officials to be held accountable for service shortfalls because they can always blame problems on the lack of funds from higher government levels. The clear solution is to permanently assign more revenue to local governments – either by granting them the rights both to levy taxes on a specific base and to set the tax rate, or allocating them a higher share of a national sales or income tax.

We know from the successful project examples cited earlier that deep citizen involvement is a key component for most urban initiatives. Such participation results in projects consistent with users’ needs and, therefore, are more efficient and effective than top-down project development. Community based organizations (CBOs) are a full participant in the preparation of city development strategies in the Cities Alliance process, which have served successfully as the foundation for practical plans for city development in Yemen and other countries. As laudable as these and other cases are, a broad consultative process is not common.

Often the approval of an elected city council is viewed by city governments as sufficient citizen input into the decision making process. In practice, however, its members are little involved in developing plans for major projects, not to mention those at the neighbourhood level. They also tend to be members of the city’s elite. Inclusion of NGOs, CBOs, civil society, and other stakeholder groups representing the whole community should be standard practice in municipal planning and project development.

 

Getting land policies ‘right’ is frequently cited as the single most important contributor to balanced and equitable urban development for all sections of the population. Of the several different policy elements, secure land tenure is the one most often discussed. Confidence in land rights has been shown to affect the investment poor households will make in their dwellings and informal businessmen in their premises. Despite the wide recognition of this point, progress in granting and registering secure land rights is slow in informal settlements and even in upmarket areas in some countries.

Land management and regulation are also critically important. One component is land use zoning, particularly evolving a system that operates flexibly to accommodate necessary changes in land use in central areas as the city develops. A striking example is the increased housing densities over time in the same formal neighbourhoods as access to the centre becomes more valuable.

The combination of poor policies and low household purchasing power among the poor extracts a high cost from those living in slums and the cities in which they live, in terms of resulting wasted human resources. The positive news is that the scope and cost of this form of social exclusion has attracted the attention of governments and some members of the donor community and lessons from successful interventions are slowly being absorbed.

The challenge ahead is to help cities to work more closely with their citizens – the central player in improving their operations in all areas – and to think of slum upgrading in a broader city improvement context. The costs to businesses of frequent brown-outs and massive daily traffic jams are enormous and undermine their international competitiveness. More efficient cities are essential. Access to jobs is at least as important as better housing. A result of improving living environments of the poor, ranging from better water service to upgraded access to jobs to better health facilities, will permit much greater integration of neighbourhoods and society, as well as improved living standards broadly defined. Exclusion will decline.

Happily, there are signs of this approach being adopted. Scholars have enunciated it. The World Bank’s evolving urban and local government strategy appears to embrace it. Governments and donors are beginning to accept it. A World Bank municipal project currently being implemented in Kenya is squarely along these lines. That said, one cannot underestimate the challenge of shifting the control of significant resources from national governments to cities and of strengthening the capacity of cities to employ them effectively, including integrating citizens into the process at many levels.

 

Footnotes:

1. M. Fix and R. Struyk (eds.), Clear and Convincing Evidence: Measurement of Discrimination in America. Urban Institute Press, Washington, DC, 1992. The book provides an overview of the methods and findings in several sectors. For more recent findings on labour market discrimination, see D. Pager, B. Western and B. Bonikowski, ‘Discrimination in a Low-Wage Labor Market: A Field Experiment’, American Sociological Review 74(5), October 2009, pp. 777-99.

2. UN-HABITAT, State of the World’s Cities 2008/2009. Earthscan, London, 2008.

3. G. Tannerfeldt and P. Ljung, More Urban Less Poor. Earthscan, London, 2006.

4. S. Gulyani and D. Talukdar, ‘Slum Real Estate: The Low-Quality High-Price Puzzle in Nairobi’s Slum Rental Market and its Implications for Theory and Practice’, World Development 36(10), 2008, pp.1916-37.

5. Eliya Zulu, A. Ezeh and F. Dodoo, Slum Residence and Sexual Outcomes: Early Findings of Causal Linkages in Nairobi, Kenya. African Population and Health Research Center Working Paper No 17, Nairobi, 2000.

6. UN-HABITAT, 2008, op cit., p. 125.

7. UN-HABITAT, The Challenge of Slums: Global Report on Human Settlements. Earthscan Publications, Sterling Virginia and London, 2003, p. 75.

8. Ibid., p. 69.

9. World Bank, World Development Report 2004: Making Services Work for Poor People. World Bank and the Oxford University Press, Washington, D.C., 2003, p. 134.

10. V. Barbiero, ‘Urban Health: An Inevitable International Imperative’, in B. Ruble, A. Garland and M. Massoumi (eds.), Global Urban Poverty: Setting the Agenda. Woodrow Wilson International Center for Scholars, Washington, D.C., 2007, p. 197.

11. S. Mitric, Urban Transport for Development: Towards an Operationally-Oriented Strategy. World Bank, Transport Paper TP-22, Washington, DC, 2008, pp. 63-64.

12. A. Hartmann and J.F. Linn, Scaling Up: A Framework and Lessons for Development Effectiveness from Literature and Practice. Brookings Institution, Wolfensohn Center for Development, Washington, D.C., 2008.

13. G. Tannerfeldt and P. Ljung, 2006, op cit., pp. 68, 152.

14. A. Shah and S. Shah, ‘The New Vision of Local Governance and the Evolving Role of Local Governments’, in A. Shah (ed.), Local Governance in Developing Countries. World Bank, Washington, D.C., 2006.