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Urbanization and Social Policy Challenges
World Development Report 197;, the second of its annual flagship reports ever since 1978, chapter 7 of WDR 1979 focused on urbanization, alongside chapters on industrialization, employment and other development topics. As one looks at these documents in 2009 and asks the question "what's different today", many of the issues, approaches and recommendations put forth thirty years ago look remarkably relevant today. WDR 1979 correctly predicted rapid urbanization for the next 20 years at least and the rise of many more mega cities. It highlighted the productive capacity of urban agglomerations, but also stressed the increasing problems of congestion, environmental degradation and poverty. WDR 1979 regarded urbanization as inevitable, as both an opportunity and a challenge, and saw efforts to restrain it, including by limiting rural-urban migration, as misguided. It focused squarely on urban poverty reduction and branded measures to eradicate slums through evictions and destruction as counterproductive. Instead, the WDR - and the book authors in greater detail - recommended specific policies to improve rural and urban productivity, urban land management, expanded infrastructure and social service provision, elimination of inappropriate regulatory constraints on formal and informal commercial activity and employment, more decentralization and increased engagement of communities, and improved financing mechanisms. Many, of these recommendations remain relevant today. Calls for a paradigm shift in the thinking on urbanization and urban policies today, which invariably echo the positions presented in WDR 1979, therefore create a sense of déjà vu among those who were involved in the debates about urbanization 30 years ago.
A review of the urban literature shows that there is now a much greater focus specifically on slums. This is reflected in the elevation of slum eradication as a specific target under the Millennium Development Goals and in the many recent reports produced by UN-HABITAT and others on slums. However, there remain differences of perspective: UN-Habitat, advocacy groups such as CARE and researchers who focus specifically on urban poverty and slums tend to present rapid growth of slums primarily as a long-term, persistent problem that needs to be urgently addressed, and only secondarily as offering opportunities to be suitable supported and developed. In contrast, the WDR 2009 sees slums as hubs of productive activity whose conditions will improve over time, with limited scope for intervention by countries with weak institutional and economic capacity. Buckley et al. (2006) point out various reasons why the estimates and projections of slum populations by UN-HABITAT tend to err systematically on the high side. Reports in the media fall in both camps: Eaves (2007) in "Forbes" envisage a future where Western security experts will have to worry not only about failed states, but also failed cities. Tuhus-Dubrow (2009) reports in the "Boston Globe" that some experts see the slums as a model for modern city life with their tightly-nit, community based, low-energy intensity economies. Hussock (2009) in "City Journal" traces what in his view is a grossly misleading perspective of slums "as bleak wastelands that transformed their residents into paupers and criminals and therefore had to be radically changed or eradicated.
If the urban challenges look overwhelming, the good news is that there are new instruments available to tackle them - instruments that were not widely discussed or deployed thirty years ago, but that can be added to those that remain valid from the early days of urban development policy and practice. Among the specific instruments, perhaps the most prominent is land tenure regularization and land titling. Its most prominent proponent is Hernan de Soto (1989, 2000), who viewed it as an essential tool for economic and political empowerment of the urban poor. Since the publication of his seminal research land tenure regularization and land titling have become regular features in the urban literature, although in practice progress has been slow in many programs (Struyk and Giddings, 2009). It has also been recognized that land titling may have negative implications and, to be successful, needs to be combined in most cases with other interventions, including credit, improvements in services, etc. (McGranahan, et al., 2008; Smolka and Larangeira, 2008). Intermediate approaches between providing no and full title have also been proposed. (Payne, 2005) Views about the success of the huge land titling program implemented in Peru following De Soto's advice range from positive (as in reported in Struyk and Giddings, 2009) to failure (reported in Smolka and Lanrangeira, 2008).
Another new instrument, not in general use thirty years ago but now enjoying great social development interest, are micro-credit programs. Based initially on the experience of highly successful micro-credit programs in the rural areas of Bangladesh (most notable those of the Grameen Bank and of BRAC), such programs have also been extended to urban areas for support of shelter construction and micro-business development. Other new instruments relate to programs targeted directly at specific urban shelter or land use issues, such as provision of low-cost water taps, toilets, cement floors, bus rapid transit, and street addressing. One program that has successfully been scaled up is the program "Patrimonio Hoy" of the Mexican cement company CEMEX, which provides a combination of cement, credit and technical advice for home self-construction by poor people and by 2007 reached almost 200,000 poor urban families over its first six years of existence, with plans to reach two million over the subsequent six years.
The most intriguing and fundamental new analytical tool is what is known "happiness analysis", "life satisfaction analysis" of "quality of life analysis". Instead of looking at revealed preferences as expressed through per capita income and consumption and their composition, which has been the standard way for economists to analyze people's wellbeing, happiness and life satisfaction analysis bases its measurement of well being on people's personal assessments as revealed through surveys. (Graham, 2008 ; Lora, 2008)
Finally, presented by its proponents not as a substitute for standard economic analysis, but rather as a complement, the approach yields fascinating insights into how people view their lives at a given time as well as over time, and into the factors that contribute to their subjective happiness and life satisfaction. Examples of findings relevant for urban poverty analysis are that people's happiness is more significantly impacted negatively by losses than positively by equivalent gains, and that falling into unemployment is a life event that has one of the most severely negative impacts on people's life satisfaction (Graham, 2008). Especially surprising is that surveys in Latin America have shown that on average people prefer informal over formal sector employment (Lora, 2008), even though they tend to be less productive.
As the preceding review of issues and potential research priorities within challenges there is a multitude of instruments for intervention and tools, and there are many different levels (global, regional, national, sub-national, city or community) on which one can focus in designing an urban research program. One thought that runs consistently through the paper is that scaling up successful interventions is critical to improve the lives of the urban poor. Too often, we are satisfied with defining success as a positive outcome for a limited number of people in a given location. It is not good enough for a program or project to have positive outcomes for a few hundred or even thousand urban poor - the question should always be asked whether and how this success can be replicated or scaled up to levels that achieve comparable positive outcomes across the broader universe of the poor in a city, in a country and worldwide.