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When South Africa’s apartheid regime top-pled 10 years ago, it captured the imaginationof the world. No other country had plungedso deep into the twentieth century governedby laws that brutally divided, by skin color, allof its cities, towns, and villages. A decadeinto a new era, Johannesburg, South Africa’slargest city, still has a long way to go to over-come this history. Sandton, its prime north-ern suburb, is a vision in concrete, chrome,and glass—its skyline punctuated by gleam-ing five-star hotels, office complexes, andupscale shopping malls. Soweto, the bestknown of the townships erected by blacksnot permitted in the “official” city, remainsfor the most part dusty and ramshackle. Allof Johannesburg’s white population had atoilet in their home in 1995; only half of theblack population did. And as of 1998, only 13percent of households in Johannesburg’sblack township of Alexandra had one. Thisdisparity in neighborhoods is echoed ingrossly inadequate access to education andhealth care for the black majority.1

While South Africa’s history of racial divi-

sions enshrined in law is unique, its citiesare not the only ones that need to be united.Cities divided into rich and poor, healthyand unhealthy, “legal” and “illegal,” are alltoo common worldwide. In some sense, thisis nothing new. Plato observed around 400BC that “any city, however small, is in factdivided into two, one the city of the poor, theother of the rich.” Centuries of technologi-cal innovations and social progress have donelittle to close the gap. Priced out of the“legal” real estate market, hundreds of mil-lions of people seek shelter in the most pre-carious places, on steep hillsides orfloodplains, living not only with the con-stant threat of possible eviction but also morevulnerable to natural disasters, pollution,and disease from lack of water and toilets.More than half the people in Cairo, Nairobi,and Mumbai (formerly Bombay), for exam-ple, lack adequate housing—living in slumsor even on the pavement.2

Slum residents have not gained much fromsociety’s intense use of key resources overthe last century, a use that has pushed the

Molly O’Meara Sheehan

Chapter 7

Uniting Divided Cities

UNITING DIVIDED CITIES

planet’s support systems to their limits. Onegroup of scientists has estimated that peoplehave transformed half of Earth’s land sur-face through agriculture, forestry, and urban-ization; contributed to a 30-percent increasein atmospheric carbon dioxide concentrationsince the beginning of the Industrial Revo-lution; and today use more than half of allavailable surface fresh water. The benefits ofall this activity, however, have accrued to a rel-atively wealthy minority. In 2001, 52 per-cent of the gross world product went to the12 percent of the world living in industrialnations—the same group responsible for a dis-proportionate share of industrial timber con-sumption, paper use, and carbon emissions.These inequities are perhaps most glaring inthe world’s slums, where the poor are exposedto the worst environmental conditions,including pollution from the wealthy.3

While the inequalities of wealth, power,opportunities, and survival prospects thathobble humanity are crystallized in cities,these places will have an important role toplay in any shift toward development thatdoes not destroy the environment. At theroot of sustainable development—which canbe defined as meeting the needs of all todaywithout endangering the prospects offuture generations—is the challengeof improving the welfare of billions ofpeople without further underminingEarth’s support systems. Cities arewhere most of the world’s peoplewill live and where an even greatershare of key planetary resources willbe used in the coming decades. Keyglobal environmental problems havetheir roots in cities—from the vehi-cle exhaust that pollutes and warmsthe atmosphere, to the urbandemand for timber that denudesforests and threatens biodiversity, tothe municipal thirst that heightens

tensions over water. 4

Cities will have to be the building blocksof development that values nature and peo-ple—and they do hold enormous potential forboth environmental and social progress.When people are concentrated in one place,they ought to be able to use fewer materials,and to recycle them with greater ease, thanwidely dispersed populations can; at the sametime, they should be more easily linked toschools, health care, and other key services.Compared with higher forms of government,city halls are closer to people, so organized cit-izens theoretically have a better chance ofchanging the status quo on matters of envi-ronmental and social concern. Throughouthistory, higher levels of health and educa-tion have come after periods of urbanization;today, the countries that rank highest in sur-veys of freedom and human development arealso the most urbanized. City-level invest-ments in water infrastructure, waste provision,health, and education match up with nationalrankings of human development that takeinto account life expectancy and literacy. (SeeFigure 7–1.) Many cities perform better orworse in these measures of “development”than could be explained by income alone,

State of the World 2003

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City Development Index, 1998

Niamey, Niger

Stockholm, Sweden

Hum

an D

evel

opm

ent

Inde

x, 1

998

0 20 40 60 80 1000.0

0.2

0.4

0.6

0.8

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Figure 7–1. Link Between Human Developmentand City Development, 150 Cities, 1998


suggesting that municipal policies can makea big difference.5

By ensuring that their poorest slumdwellers feel secure in their own homes, canmake a living, and are healthy, the world’s rel-atively poorer cities could leapfrog theirwealthier counterparts in the North, creatingan urban model that values both people andnature. Cities typically are responsible forgranting titles to property, providing waterand waste disposal, organizing public trans-portation, and making building codes andland use rules. These activities could be car-ried out in a way that makes it easier for poorpeople to survive, while also having environ-mental benefits for the whole city and theworld. Local governments can, for instance,promote metals recycling, organic waste com-posting, and urban agriculture, can give pri-ority to cheap public transportation, and canallow people to run small businesses out oftheir homes. Such activities have the poten-tial to green cities, create job opportunities,and reduce the demand for materials fromlogging, mining, and industrial agriculture, allof which take an enormous environmentaltoll.

Urban centers in the developing Southnow dominate the ranks of the world’s largestcities, so they are well positioned to capturethe public’s imagination. While most of theworld actually lives in smaller cities, towns,and villages, big cities command special atten-tion. Many people either know of or havebeen to large metropolises, which often serveas national capitals, financial hubs, sites formajor airports, and centers of commerce andmedia. The cities of the industrial North werecenter stage in this regard for just a briefmoment in history, claiming all the slots in thetop 10 in 1900. By 2001, however, onlyTokyo and New York remained on that list.(See Table 7–1.) Demographers expect thatby 2015, Los Angeles and Shanghai will be

bumped from the top 10, as Karachi andJakarta move up. Why shouldn’t some of thecities that lead us toward a more equitable andenvironmentally friendly model of develop-ment be some of these behemoths of thetwenty-first century?6

In many cases, municipal reforms that ben-efit the poorest people and nature will bemore likely if city halls become more open andaccountable. Local governments usually donot boldly address the needs of their poorestpeople in ways that would yield wide-rangingenvironmental benefits because people whohave more money and influence—from realestate developers to leaders of polluting indus-tries—often push a different agenda. In thelast decade, some cities have started to includetheir poorest citizens in decisionmaking, oftenwith national and international support. Fromslum dwellers federations worldwide to aninnovative budgeting process in many Brazil-ian cities, poor people’s voices are rising inopen political arenas. If they are to help unitedivided cities, governments will have to workeven more closely with large numbers of poorurbanites, many of whom live in slums.7

Poverty and IneptGovernment in an Urbanizing World

Slums are an intensely local phenomenonwith growing global significance. A neigh-borhood-by-neighborhood look at theworld’s cities would reveal that not all poorpeople live in slums, and that not all slums areuniformly poor. As urban poverty concen-trates in slums, however, these neighbor-hoods offer government officials distinctplaces on the ground where they could findand work with some of their poorest con-stituents.

Although “slums” are generally under-


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stood to be urban areas with miserable livingconditions, they vary dramatically from placeto place and are described by a universe ofoverlapping terms—some of them are color-ful; many of them, like “slum,” are franklynegative; and few are synonymous. “Squattersettlements” are formed when poor peoplebuild shelter on land that does not belong tothem. Such settlements may also be called“illegal” or “informal,” terms that are oftenused interchangeably when describing theoff-the-books nature of some slums. Otherdevelopment authorized by landowners thatis not in the squatter category may still be ille-gal or informal because the land is not zonedfor building, or because it has been unlawfullysubdivided into smaller parcels, or because thedwellings are not up to the standards of build-ing codes.8

All these terms can give a false impressionof the character of communities without con-veying the basic problem of insecurity. Law-abiding people often live in “illegal” housing.Many “squatter settlements” are packed withrent-paying tenants. Neighborhoods settled

by squatters decades ago may no longer beslums. And some illegally built or subdividedneighborhoods may be upscale from the out-set. As every city has its own history, cul-ture, economy, and real estate peculiarities,each slum has its own look and feel—whetherit’s a kampung in Indonesia, a favela in Brazil,a gecekondu in Turkey, or a bidonville in partsof francophone Africa. Despite the tremen-dous variation, one common characteristicof slums tends to be the insecurity that resi-dents feel in their own homes, which oftenthwarts them from improving their livingconditions and reaching their full potential.9

The United Nations estimates that 712million people lived in slums in 1993 andthat their ranks swelled to at least 837 millionby 2001, with slum dwellers accounting for56 percent of the urban population in Africa,37 percent in Asia and Oceania, and 26 per-cent in Latin America and the Caribbean.These rough numbers, drawn from surveysand census data that may be incomplete orout of date, give some sense of the scale of theglobal slum population, although they may


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Table 7–1.World’s 10 Largest Urban Areas, 1000, 1800, 1900, and 2001

1000 1800 1900 2001

(million population)

Cordova1 0.45 Peking3 1.10 London 6.5 Tokyo 26.5Kaifeng 0.40 London 0.86 New York 4.2 São Paulo 18.3Constantinople2 0.30 Canton4 0.80 Paris 3.3 Mexico City 18.3Angkor 0.20 Edo5 0.69 Berlin 2.7 New York 16.8Kyoto 0.18 Constantinople 0.57 Chicago 1.7 Mumbai 7 16.5Cairo 0.14 Paris 0.55 Vienna 1.7 Los Angeles 13.3Baghdad 0.13 Naples 0.43 Tokyo 1.5 Calcutta 13.3Nishapur 0.13 Hangchow6 0.39 St. Petersburg 1.4 Dhaka 13.2Hasa 0.11 Osaka 0.38 Manchester 1.4 Delhi 13.0Anhilvada 0.10 Kyoto 0.38 Philadelphia 1.4 Shanghai 12.8

1Cordoba today. 2Istanbul today. 3Beijing today. 4Guangzhou today. 5Tokyo today. 6Hangzhou today.7Formerly Bombay.SOURCE: 1000–1900 from Tertius Chandler, Four Thousand Years of Urban Growth: An Historical Census (Lewiston,NY: Edwin Mellen Press, 1987); 2001 from U.N. Population Division, World Urbanization Prospects: The 2001 Revision (New York: 2002).


well underestimate it. Another U.N.study suggests that more than 1 billionpeople worldwide live in slums.10

Urban growth is meeting up withpoverty and inept governments to fuelthe current proliferation of slums. Worldpopulation increased by some 2.4 bil-lion in the past 30 years, and roughlyhalf of that growth took place in cities.Over the next three decades, the indus-trial North is not expected to expand intotal population very much. In contrast,demographers believe that in many devel-oping countries, urban migration andgrowth combined with high birth rateswill mean that between 2000 and 2030nearly all of the 2.2 billion people added toworld population will end up in urban cen-ters of the developing world. (See Figure7–2.) While the size and growth of the urbanpopulation in developing nations dominatesglobal population projections, there is alwaysa lag between censuses, and all nations havetheir own definitions of “urban” that tend tochange over time, so these estimates arerough.11

Poverty may be even harder to measure ona global basis than population size is, butvarious studies do point to greater numbersof urban poor. One U.S. dollar will buy farless food in Jakarta or São Paulo than inDacca or Nairobi—and it will buy even lessin New York. For that reason, the interna-tional standard of a $1 a day income to denote“extreme poverty” or lack of money to meetbasic food needs invariably underestimatespoverty in cities. Still, the World Bank sug-gests that some 1.2 billion people worldwidewere extremely poor as of 1998, with ruralsub-Saharan Africa and South Asia hardest hit.Martin Ravallion of the World Bank esti-mates that the urban share of extreme povertyis currently 25 percent worldwide, and likelyto reach 50 percent by 2035. By then the

urban share of world population is likely tohave grown from nearly 50 percent today tomore than 60 percent.12

While rural people tend to have less accessto cash, education, clean water, and sanitationthan city dwellers do, the deficits cause moresevere problems in an urban setting. Peopleare less able to grow their own food in cities,so they must rely on the cash economy forsurvival. Urban jobs tend to require higherlevels of education. And inadequate sanitationbrings infectious disease to more people incities, where dense populations make it eas-ier for disease to spread. Addressing the WorldBank in April 2002, economist Jeffrey Sachsnoted that too often the fact that most of thepoor live in rural areas is used to argue foronly a rural-led growth strategy to endpoverty. “We need a better urban-based strat-egy as well,” he pointed out.13

Slums take root when local governmentsfail to serve large numbers of poor people.Many cities in Africa, Asia, and Latin Amer-ica have housing laws and codes copied fromthose written in nineteenth- or twentieth-century Europe that make little sense in theircurrent context. Poor people, by buildingtheir own shelters, have become the devel-


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1970 2000 2030

Billion People

0

2

4

6

8

10DEVELOPING NATIONS

Urban population Rural population

MORE DEVELOPED NATIONS

Total population

Figure 7–2. World Population Growth byRegion in 1970 and 2000, with

Projection for 2030


oping world’s “most important organizers,builders, and planners,” in the words ofresearchers Jorge Hardoy and David Sat-terthwaite. Yet most codes are written not forthese local builders but for engineers or archi-tects in a different time and place. In Nairobi,for example, Kenyan codes call for the build-ing materials standard in the United King-dom.14

Even if appropriate housing codes were onthe books, the larger problem of govern-ments being unable or unwilling to enforcelaws and provide needed urban services wouldremain. In many countries, national govern-ments have given local governments moreresponsibility for providing services in thelast several decades, but have been slower togive cities money from national tax revenueor to allow local governments to raise theneeded funds themselves. Moreover, the dis-parity between the budgets of rich and poorcities is striking. A survey of 237 cities world-wide shows an average municipal revenueper person of just $15.20 in Africa, $248.60in Asia, $252.20 in Latin America, and$2,763.30 in Western Europe, the UnitedStates, Japan, and the rest of the industrialworld. The ratio of city budgets in Africa tothose of the industrial world, 1:182, is farhigher than the 1:51 ratio of per capitaincome between sub-Saharan Africa and high-income nations.15

As money buys political influence virtuallyeverywhere in the world, bribes and kick-backs often keep cash-strapped local officialsin developing nations from operating in theinterests of their poorest constituents. Thenongovernmental organization (NGO) Trans-parency International, in a ranking of 102nations, found corruption rampant in manynations with large or growing numbers ofurban poor, including Bangladesh, Bolivia,Indonesia, Kenya, Nigeria, and Uganda.16

The available data on population, poverty,

and corruption, while patchy, thus suggestthat the conditions for large and growingslums exist in many parts of the world. Theareas of particular concern include sub-Saha-ran Africa, South Asia, and parts of LatinAmerica. (See Figure 7–3).17

The Paradox of SlumsA slum can demonstrate both the very bestand the very worst in society, showing theingenuity of poor people in desperate cir-cumstances as well as the failure of govern-ment to make the most of this human energy.People who are not born into informal set-tlements may find their way there becausetheir other options are far bleaker. While theenergy that people in slums may invest insecuring a better future for their familiesshows the resiliency of the human spirit, ifgovernment were functioning well, peoplewould not have to try so hard to achieve adecent standard of living. Mtumba, an infor-mal community in Nairobi, is one place whereit is easy to see both the good and the badaspects of life in a slum. (See Box 7–1.)18

All over the world, people move to newplaces for better opportunities, and whenthey choose informal settlements in urbanareas it is often because these slums, shanty-towns, or squatter settlements offer the bestchance for them to survive. In some cases,slums may offer the most affordable lodgingclose to jobs, even if the location still requiresa very long commute. In general, the “off-the-books” nature of informal communitiesconfers certain advantages. People can skirtzoning laws that separate residences frombusinesses, and can set up shop inside theirhome or just outside. Plus they face lowshort-term costs: low rent and no propertytaxes.

But the same informality that may helppoor people gain a tenuous toehold on the


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ladder toward economic security can alsoprevent them from moving up that ladder. Asinformal settlements legally do not exist, peo-ple who live there often lack not only moneyand political power, but any legal means ofsolving problems. The owners of slumdwellings can more easily get away with charg-ing exorbitant rents. Although the share ofresidents who are owners versus renters variesamong communities, the proportion ofrenters is often higher than commonlythought (people assume that most, if not all,inhabitants are recent migrants who havebuilt their own accommodation). The shackscan be lucrative investments, but their own-ers do not typically reinvest their profits byrepairing them or hooking them up to elec-tricity or water, and tenants have no way tohold landlords accountable.19

A related irony is that the poorest urban

residents often pay the highest price for essen-tial goods and services that are delivered bygovernment at much lower cost to wealthierresidents. In some cases, this is because ahousehold without a formal address does notqualify for hookup to the public water system,entry into public schools, or other essentials.In Mumbai, for example, pavement dwellershave trouble obtaining the cards that qualifypoor people for food aid and health care.What makes informal settlements so cheap inthe short term is that the cost of urban ser-vices are not factored in from the beginning,as they would be in the formal constructionsector; in the latter case, the governmentprovides streets and services and someonebuys the land at the outset, then the buildingsare constructed, and only afterwards do peo-ple move into finished houses. In contrast,informal settlements begin with people mov-


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Figure 7–3. The Overlap of Poverty, Urban Growth, and Corruption

42 countries (of 77 surveyed) where at least 10 percent of the population lives on less than $1 a day

67 countries with urban growth rate over 4 percent

35 most corrupt countries (of 102 surveyed)Source:World Bank, UNPD,Transparency Intl.


ing onto land, then building homes and busi-nesses over time, and only later, if at all,negotiating connections to urban streets,water systems, and electricity grids and obtain-ing title to property.20

As a result, poor people often end up

building their own schools and latrines andpurchasing water, at a very high cost, fromprivate vendors. The price of water in theslums may be 7–11 times the tap price ofpiped water in wealthier areas in Nairobi,12–25 times the tap price in Dhaka, 16–34


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The view from a mound of dirt and rubbish onthe edge of Mtumba, a Nairobi neighborhood, isstriking.To the south, acacia bushes dot thegrass plains of Nairobi National Park as far asthe eye can see; to the north lies the dense col-lection of one-story shacks that constituteMtumba—5–6 hectares where roughly 6,000people crowd into 800 makeshift structuresthat are cobbled together with mud, wattle,plastic tarps, and iron sheets. Priced out of the“formal” real estate market, like 55 percent ofNairobi’s residents, the people of Mtumba havesettled in “informal” housing—and this can beboth cheered and despaired. Many have foughthard to make it to Nairobi, and surmount dailychallenges not only to survive but to improvetheir community. If government worked prop-erly, it would tap this human potential ratherthan squander it.

On paper—in local maps and laws—theborders of the National Park’s 11,700 hectaresare well defined, helping to protect the rhinosand giraffes that live there.What does notshow up on any map is Mtumba.This meansthat its residents are endangered, receiving noprotection from the law. Mtumba’s families havemoved twice, landing in their current locationin 1992, where they have had their homes com-pletely demolished once and been threatenedwith eviction several times.“Every day we arewaiting for the demolition squad,” says GeorgeNg’ang’a.“We are refugees in our own country.”

Ng’ang’a, like others, came to Mtumbabecause it offered a respite from rural violenceand a closer proximity to jobs. He says his fam-ily’s land was taken by the colonial Kenyan gov-ernment in 1952 to build a golf course.“My

father was a businessman,” he says,“so we wentto different places, like nomads.” Ng’ang’a con-tinued the itinerant lifestyle, always looking forbetter opportunities for himself, his wife, andtheir children.“We came to the Nairobi slums,even though I have an education.”

For several years in a row the people ofMtumba have chosen George Ng’ang’a to bethe leader of the community’s governing coun-cil in informal elections. Residents have electeda committee that has built a school, where fourteachers juggle morning and afternoon shifts toteach more than 400 children. On Sundays,community leaders convene committee meet-ings in the school, Mtumba’s sturdiest structure,with a wood frame and corrugated metal wallsand roof.

Even with this concerted effort, Mtumbaremains ineligibile for basic urban services. Res-idents share three pit latrines and two watertaps.“It’s expensive,” says Tom Werunga of thewater that private companies truck in andhook up to the taps.“A family needs 100 litersper day for drinking and cleaning.” This costs 25Kenyan shillings, nearly half the earnings ofsomeone who makes 50–60 shillings per day, asWerunga does. Nairobi’s slum dwellers paymore than residents of wealthy housing estatesfor water—as a result, they use less thanenough to meet health needs.The under-fivemortality rate is more than 151 per thousandbirths in Nairobi slums, far higher than theaverage for the city as a whole (61 perthousand) and 25 percent more than in ruralKenya (113 per thousand).

SOURCE: See endnote 18.

BOX 7–1. LIFE IN MTUMBA, A NAIROBI SLUM


times the tap price in Tegucigalpa, 20–60times the tap price in Surabaya, and 28–83times the tap price in Karachi. Toilet stalls,generally operated by governments ratherthan private vendors, are not as pricey but farless common. Pointing to deficiencies in datasupplied by governments, researchers at theUK-based International Institute for Envi-ronment and Development (IIED) have esti-mated that as much as two thirds of the urbanpopulation in Africa, Asia, and Latin Amer-ica has no safe way to dispose of humanwaste.21

Water that is too expensive for slumdwellers to use in adequate amounts, com-bined with few toilets, leads to disease. Whenasked at an international conference to sumup the worst environmental health threatsto poor people in cities of the developingworld, IIED’s David Satterthwaite showed aslide with a single word: “shit.” At a latermeeting, renowned epidemiologist SirRichard Doll provided a more thorough sum-mary: “bugs and shit.” Slum dwellers paymore for each liter of water they consumethan wealthier residents hooked up to munic-ipal water mains and sewers, and they dis-proportionately suffer from water- andwaste-borne pathogens—from diarrhea-caus-ing E. coli and rota virus to roundworm. “Putbluntly,” writes health researcher CarolynStephens, “the poor pay more for theircholera.” Gullies filled with stagnant wateroften serve as cesspools in slums, and attractmosquitoes, so slum residents are also morevulnerable to malaria. (See Chapter 4.)22

Furthermore, the money slum dwellersspend on water, kerosene, or other key itemsfrom private vendors does not reach publiccoffers, where it could then be used to extendpublic services, from water pipes to healthclinics, into slums. In Mumbai, local author-ities are beginning to understand that bring-ing slum dwellers “onto the books” will help

the city, and they are now working with theNational Slum Dwellers Federation and itspartners, other NGOs. “From sanitation toaccess to policymaking—when poor peopleare allowed these things, government has aneasier job,” says Sheela Patel, who directs anNGO in Mumbai, the Society for the Pro-motion of Area Resource Centres (SPARC),that works with slum dwellers.23

Slums can also breed disease that threatensbroader public health. While pathogens travelquickly in crowded slum conditions, they donot stop at the gates of wealthier enclaves. Byweakening people’s immune systems, theAIDS virus makes people more susceptible toother communicable diseases, speeding thetransmission of airborne pathogens such as thetuberculosis bacteria. Both HIV and tuber-culosis are spreading rapidly in urban centersof the developing world.24

Moreover, economic inequality, in theform of glaring disparities between poor slumsand posh gated enclaves, may itself be a dragon public health. Researchers comparing U.S.metropolitan areas found a higher level ofpremature deaths in the places with the high-est income inequality, while in 13 industrialcountries there were lower levels of prematuredeaths from certain diseases in more egali-tarian countries. One theory to explain thesefindings is that cities or countries with highlevels of inequality may be underinvesting inimportant physical and social infrastructure,such as education, that could serve to preventsome diseases. Another possibility is that highlevels of inequality contribute to social ten-sions that stress people; as the immune systemtakes cues from both body and mind, peopleunder stress are more susceptible to illness.25

The persistence of slums in an era ofunprecedented prosperity may also contributeto tensions that threaten local, national, andeven global security. Slums do not createcriminals, but the lack of policing in bad


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neighborhoods allows criminals to victimizea city’s poorest people. Following the Sep-tember 2001 attacks on the United States,New York Times columnist Thomas Fried-man wrote that in an increasingly intercon-nected world, it will be impossible to ignorethe problems of people living in desperateconditions at home or abroad: “If you don’tvisit a bad neighborhood, a bad neighbor-hood will visit you.” The educated and rela-tively wealthy young hijackers who usedplanes as weapons on September 11 did notcome from the slums; however, the contrastof poverty in the Middle East with wealth inthe United States and Western Europeappears to have been at least one factor moti-vating their actions.26

From Bulldozing to UpgradingGovernments around the world have takenvarious tacks to address slums over the years,with spurts of change as urbanization trans-formed the United Kingdom and othernations of the west from the mid-nineteenthto early twentieth centuries, then Latin Amer-ica in the mid-twentieth century, and thenmuch of Asia and Africa in recent years.Whether razing blighted neighborhoods orbuilding giant public housing projects, gov-ernments have been slow to consult poorpeople when making plans to improve theirliving conditions. Over time, the potentialfor organized citizens to transform their ownneighborhoods has become much clearer.

Individuals working in Latin America ledthe way in showing policymakers the contri-butions of poor people. John F. C. Turner, aBritish architect, helped secure a major WorldBank loan in 1958 to work with communi-ties to rebuild after a devastating earthquakein Lima, Peru. He says that he and his col-leagues “soon realized that our professionalassumptions of design, construction and man-

agerial superiority were exaggerated, to say theleast. We soon learned that we needed oursupposed clients’ own knowledge and theskills of local builders—and how badly ourown bright ideas ignored their realities.”27

Turner drew on his experiences working inLima and elsewhere to give a scathing critiqueof prevailing government policy in 1976:“Comparing the cities that the poor buildwith the ‘redevelopment’ schemes built to‘rehabilitate’ the poor, one could paraphraseChurchill: Never in urban history did so manyof the poor do so much with so little; andnever before did so few of the rich do so lit-tle with so much.” That same year, U.S.scholar Janice Perlman published the findingsof her research in the favelas of Rio de Janeiroin The Myth of Marginality: Urban Povertyand Politics in Rio de Janeiro, which foundthat policymakers’ assumptions about fave-lados were “empirically false, analytically mis-leading, and pernicious in their policyimplications,” as these poor people gave muchmore to the city than they got in return.28

To better support the efforts of poorurbanites, governments and NGOs adoptedtwo general tactics. One was to set aside landfor them, and in some cases equip that landwith water taps or other services. This becameknown as the “sites” or “sites-and-services”approach. Governments were not always ableto find suitable land to do this, however.With the second method, “upgrading,” gov-ernments worked with residents to extendstreets or sewers into existing communities.A few countries launched into this on anational scale. In many other cases, commu-nity groups or NGOs took the lead.29

Indonesia was one of the first of just a fewcountries to make a national policy of help-ing slum residents upgrade their neighbor-hoods. As urban populations grew in themid-twentieth century, local governmentsthere responded by evicting people who set-


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tled on land not designated for housing. Butby the late 1960s, government officials alsobegan to focus on improving conditions inexisting informal settlements, or kampungs.With the first Kampung Improvement Pro-grammes, city governments provided con-crete slabs and gutters on demand tokampung residents in Indonesia’s two largestcities, Jakarta and Surabaya. People used theseto construct paths and drains. In the 1970s,as these efforts attracted the support ofnational government and international agen-cies such as the World Bank, Asian Develop-ment Bank, and the Government of theNetherlands, the program was extended tohundreds of cities and towns.30

Initially, the program in Surabaya was seenby some as proceeding too slowly. TheSurabaya Institute of Technology helped tobroker extensive agreements between thekampung communities and the local gov-ernment, which made the process more time-consuming. People in Surabaya’s kampungsended up with more ownership of andresponsibility for the improvements theymade—which is often given as a reason thatimprovements in Surabaya’s kampungs con-tinue to be made to this day. As of 1990, theliving conditions of some 1.2 million peoplewere improved; a more recent annual reviewdone by the Surabaya Institute of Technologyin 2001, found that the bulk of low-incomepeople had benefited in some way.31

In the slums of Cairo, NGOs have helpedto strengthen the capabilities of industriousresidents—in particular, the Zabbaleen, amarginalized social group who survive as

wastepickers (zabbaleen is Arabic for garbagecollector). In the 1940s, this group startedcollecting garbage to bring back to their set-tlements, where they would sort out the recy-clable, nonorganic material and use theorganic waste (food scraps and so on) to feedanimals they bred in their homes for milk,eggs, and meat. By the 1970s, Cairo’s bur-geoning population was creating more wastethan the collectors could handle. In 1981, anNGO called Environmental Quality Inter-national received a Ford Foundation grant towork with the Zabbaleen—in particular, withZabbaleen Gameya, a group formed in the1970s to focus on the welfare of garbagecollectors.32

Over the next decade, the resulting Zab-baleen Environment and Development Pro-gramme helped improve both the livingconditions of the Zabbaleen and the wastecollection capacity of the city. In 1984, tech-nical advisors working with the Zabbaleenset up a composting plant in the communityof Mokattam, where many of them lived.Residents could take waste from any animalsthey bred to the plant, removing a healthhazard from their homes. The income fromthe compost sales supported the start-up ofrag and paper recycling, another incomesource, the proceeds of which were used tolaunch literacy classes and health projects. In1986, the garbage collectors’ group intro-duced some low-cost technologies that maderecycling nonorganic waste much easier. As aresult, Mokattam became Cairo’s main trad-ing post for plastic, paper, cardboard, andmetal.33

Although the program has fallen short ofsome of its goals, the Zabbaleen have madereal gains, building water and wastewater sys-tems, schools, and health clinics—and theycould do better still with government support.Between 1979 and 1991, infant mortalitydecreased from 240 per thousand to 117.


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Activists from Mumbai have been atthe forefront in mobilizing a globalpush for the rights of slum residents.


Today, about 40,000 Zabbaleen work in thedaily pickup and recycling of some 3,000tons of household trash, about one third ofthe city’s total garbage output, at no cost tothe government. As Cairo moves toward con-tracting with private companies for waste ser-vices, the city risks destroying the Zabbaleen’sdoor-to-door system that generates seven toeight full-time jobs per ton of waste and recy-cles 80 percent of the waste it collects. WhileNGOs have taken the lead in working withthe Zabbaleen, the city government couldnow step in, using the funds it would spendon a large international waste contractor topartner with the Zabbaleen and improve theirworking conditions.34

In India, since 1987 the National SlumDwellers Federation (NSDF) has partneredwith social workers, researchers, students,doctors, and other professionals in the Soci-ety for the Promotion of Area Resource Cen-tres, as well as with a collective of women’sgroups called Mahila Milan (“womentogether”), to engage government officials aspartners in improving the living conditions ofpoor people in Mumbai. Some 40 percent ofpeople there live in slums or other forms ofdegraded housing, while perhaps another 10percent live with no roof above their heads,on the pavement.35

The coalition of NSDF, SPARC, andMahila Milan, known as the Alliance, hasorganized communities around a project ofcommon interest—say, improving workingconditions or building a toilet—and thenused that project to negotiate with officialsand to give local authorities, national gov-ernment, and international agencies an ideaof what might be accomplished with greatersupport. Refusing to deliver slums as “votebanks” to local politicians, the Alliance insteadoffers to work with whomever is in power.36

Among other achievements, this coalitionhas shown that when poor people have set-

tled in places that are not safe, communitiesand government officials must cooperate tofigure out a better solution. Many of Mum-bai’s poor people made their homes inshanties on the land alongside the rail lines,where they are ineligible for basic servicesand risk being hit by trains. With the Alliance,these shanty dwellers began to organize them-selves in the late 1980s, conducting a census,starting a savings group, and approachingthe government with proposals for reloca-tion. They made some headway in the mid-1990s, when the government began tonegotiate with the World Bank on a majorproject that would expand Mumbai’s rail net-work and construct new roads—and in theprocess displace many families. The govern-ment invited railway communities to partic-ipate in organizing their relocation. Whenrail authorities started illegally demolishingshacks in February 2000, the Alliance docu-mented the activity, forcing the bulldozers tostop. The next month, some 4,000 familiesmoved into new accommodations.37

Activists from Mumbai have also been atthe forefront in mobilizing a global push forthe rights of slum residents. In 1996, theNational Slum Dwellers Federation of India,partner NGOs, and the Asian Coalition forHousing Rights joined forces with the SouthAfrican Homeless People’s Federation toforge Shack/Slum Dwellers International(SDI). Today, SDI boasts members fromArgentina, Cambodia, Colombia, India,Kenya, Madagascar, Namibia, Nepal, thePhilippines, South Africa, Swaziland, Thai-land, Zambia, and Zimbabwe. Through thisnetwork, slum residents are organizing them-selves and learning from each other. Com-munities collect data on their neighborhoods,set up savings accounts that eventually can beturned into revolving loan funds, and nego-tiate with officials to change governmentpolicies in their favor.38


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The importance of local governmentsworking with their poorest citizens comesthrough in these stories from Indonesia,Egypt, and India: extensive consultation withneighborhood residents in Surabaya helpedthe government improve slums there; inCairo, NGOs helped the wastepickers developtheir living areas—an improvement that couldbe lost if government does not join in now;and Mumbai’s slum dwellers, together withNGOs, are showing government officials howthey would gain by better partnerships.

Securing Homes and JobsPolicymakers often describe “slum upgrad-ing” in terms of discrete projects—but thatmindset will not yield the kind of systematicchanges in land rules, city services, and accessto finance needed to encourage and buildon the work of communities. Surveyingpapers on the performance of “aid” projects,the editors of Environment and Urbanizationfound poor urban people puzzled, and insome cases angered, by the activity in whichthey had little chance to participate and thatfizzled out when the advisors left. Govern-ments could better use their power to beeffective partners with slum dwellers in twobroad areas: helping residents secure theirhomes and improving their prospects of mak-ing a living.39

A central problem blocking wider adoptionof “self-help” solutions is that—in the eyes ofthe law—residents of informal settlementsdo not belong on the land they live on. Peo-ple have difficulty convincing themselves, letalone anyone else, to invest in improvingtheir neighborhood if there is a widespreadperception that it all could be bulldozed thenext day. In the Mokattam settlement ofCairo and the kampungs of Surabaya, in con-trast, people had a sufficient sense of securitythat they would not be summarily evicted.

And in Mumbai, activists negotiated dealswith local governments before proceedingwith upgrading projects. Thus governmentscould take steps to ensure that more poorpeople feel safe in their own homes.40

The most obvious way for a family tosecure their home is by getting a title to theproperty. If governments were to grant peo-ple in informal settlements this legal recog-nition, it theoretically could open up newopportunities for development, and evencredit—a point made most famously by Peru-vian economist Hernando de Soto, whodescribes buildings without titles as “deadcapital,” useful only for whatever shelter theyprovide. Buildings with titles, in contrast,can have a whole other “life” in capital mar-kets, where their owners can leverage them.De Soto was instrumental in prompting Peruto undertake a massive titling program thatformalized some 1 million urban land parcelsbetween 1996 and 2000, first in the pueblosjovenes of Lima, and then in other cities.41

Evidence from various cities, includingLima, suggests that titling may not be a “one-size-fits-all” first step, however, as it is not justred tape but murky questions of land own-ership that separate the informal from theformal world. In Lima, as in many LatinAmerican cities, numerous informal settle-ments took shape as groups of settlers planned“invasions” of unused public land. Switchingthe title from the state to the residents hastherefore been fairly straightforward. Lima’sland titling operation has been criticized forstarting with these easy cases and avoiding set-tlements on private land, where the ownershipsituation may be much more complex.42

Indeed, in much of Africa and Asia, manyinformal settlements are on private land, andsorting out ownership can be complicatedby a mix of colonial land laws and indigenous,customary laws. Shlomo Angel, who sur-veyed housing indicators in more than 50


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cities worldwide for a joint World Bank/UN-HABITAT program in the 1990s, argues thatthe formal land market simply has not workedwell for poor people in these places, so thateven if governments could formalize everyparcel of land quickly, this would raise pricesand ultimately not serve the interests of manypoor people.43

Rather than two clearcut categories of“legal” and “illegal” settlement, a contin-uum exists with varying degrees of security,as intermediate forms of tenure confer someof the advantages of property rights to peo-ple who lack legal titles. Some ad hoc arrange-ments have arisen over time and becomewidely accepted, whereas others were intro-duced by governments. Reviewing more thana dozen examples of non-title means ofachieving secure tenure from around theworld, British development analyst GeoffreyPayne concludes that governments should“maintain a wide range of statutory, cus-tomary, and non-statutory tenure options,so that all households, especially the poorand vulnerable, can obtain access to land,shelter, services and livelihood opportunitiesin ways that meet their short- and longer-termneeds.” 44

Over the years, policymakers have morewidely recognized people’s right to securehousing. UN-HABITAT launched a newglobal campaign for secure tenure in 1999,helping national and local governmentschange laws and policies to promote housingrights and oppose forced evictions. Heads ofstate meeting in New York for the UnitedNations Millennium Summit in 2000 pledgedto achieve a significant improvement in thelives of 100 million slum dwellers by 2020,with the two measures of “improvement” tobe access to better sanitation and security oftenure—a goal initially set forth by the CitiesAlliance, a joint effort of the World Bank,UN-HABITAT, associations of local author-

ities, and bilateral aid agencies launched in1999.45

When asked how improved security will bemeasured, Billy Cobbett of the Cities Allianceacknowledges: “It’s tricky.” Many govern-ments do not count slum dwellers in theircensuses, let alone measure their sense ofsecurity. Nonetheless, says Cobbett, this goalis forcing national governments, local author-ities, and the World Bank to begin to realignthemselves to better serve the needs of thepoor.46

The second area where governments needto take action is in improving the livelihoodprospects of the poor. Most people come tocities seeking a better life, holding out thehope of finding a job. Indeed, the top con-cern of mayors worldwide, according to onesurvey, is jobs. Many cities, in their quest foreconomic development, look outward ratherthan inward—trying to lure large companiesto set up shop within their borders, for exam-ple. Some mayors will overlook lax environ-mental standards or poor working conditionsas long as companies bring much-neededjobs to their people. But cities could do muchmore to match the desire of poor people foremployment with work that would actuallyimprove the local environment. One localgovernment that has just started to makestrides in this area is the tiny county of Cota-cachi in Ecuador. (See Box 7–2.) Whilenational governments often retain control ofeducation, which is central to boosting jobskills, cities can carry out many of their dutiesin ways that widen poor people’s access toemployment. Key areas for cities to targetinclude water and waste services, urban agri-culture, transportation and land use deci-sions, and small-scale credit operations.47

Mounds of refuse and inadequate waterand sanitation in poor urban communitiessuggest jobs in construction and service pro-vision that desperately need to be filled. To


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this end, municipal authorities could part-ner with slum dwellers who need both wagesand cleaner streets. The system of garbage col-lection and recycling in Cairo discussed ear-lier is an example of an opportunity formunicipal authorities to partner with peoplein low-income settlements for mutual bene-fit. Starting in 1997, the municipality of SantoAndre in São Paulo, Brazil, started a pro-gram that employs people, many of whompreviously could not find work, to collectand recycle garbage.48

City governments could also do muchmore to link water and waste services tourban agriculture, which by itself stands toprovide both jobs and nutrition. When com-

posted, organic trash—paper, food scraps,and even human waste—turns into a valuableresource that could be used on crops withinor around cities. Rosario, a city of more than1 million in Argentina, is one place wherepeople are nourishing farms and gardens withurban compost, reducing the problems andcosts of waste management while growingfood. People in Rosario’s Empalme Graneros,a villa miseria or slum, separate organic wastefrom trash they collect, compost it, and sellit as fertilizer or use it on their own gar-dens.49

While composting offers a natural linkbetween sanitation and agriculture, somecities in Latin America have introduced a


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In Cotacachi County, Ecuador, a localgovernment is working with an umbrella orga-nization of NGOs and some 37,000 citizens totransform the economy so that people will bemaking a living in ways that do not harm theenvironment. Cotacachi County lies betweenthe western slope of the Andes mountains andthe Pacific Ocean, in Ecuador’s largely ruralnorthern province of Imbabura.While Cota-cachi is small and relatively rural, even theworld’s biggest cities could take lessons fromthe way its local leadership is striving to creategreen jobs for poor citizens.

“One of the significant driving forces for the creation of the ecological county was ourencounter with some typical faces of unsustain-able development,” writes Carlos Zorrilla,president of an environmental NGO calledDECOIN. Since the 1960s, land reform policieshad encouraged small farmers to farm moun-tainous areas covered by tropical forestsunsuited to the task, while the World Bank,Mitsubishi, and others had proposed large mining projects.

In 1996, the county elected a new mayor,

Auki Tituaña, who introduced annual participa-tory assemblies.The next year, members ofDECOIN proposed the creation of an “eco-canton.” Over the course of three years,citizens and local authorities hammered out anew ecological ordinance, which clearly statesthings that are not to be done: no mining, nologging near water sources, no farming ofgenetically modified crops, and no industriesthat could introduce toxic elements, such ascyanide, mercury, lead, or other heavy metals,to the environment. But it also provides mea-sures for positive change—from requiringgarbage to be separated and recycled, to finan-cial incentives to owners of native forests forsustainable management, to promotion oforganic farming.To pursue less damaging busi-nesses, the county is studying the flower indus-try, researching cleaner technologies for leathercrafting, and seeking markets for “green prod-ucts” such as shade-grown organic coffee. In2002, UNESCO awarded Cotacachi a Cities forPeace Prize for these and other efforts.


BOX 7–2. GREENING LIVELIHOODS IN COTACACHI, ECUDAOR


“human-made” way of connecting the two.Since 1991, Curitiba, Brazil, a city whosemetropolitan region includes some 2.5 mil-lion people, has taken the money it wouldhave paid waste collectors to fetch garbagefrom hard-to-reach slums and has spent itinstead on food from local farms on the urbanperiphery. For every bag of garbage broughtto a waste collection site, a low-income fam-ily gets a bag of locally grown vegetables andfruits. In Juiz de Fora, a city of about 600,000inhabitants in the Brazilian state of MinasGerais, families receive a liter of milk for each10 kilograms (22 pounds) of garbage.50

In the first global survey of urban agri-culture for the U.N. Development Pro-gramme, Jac Smit and colleagues at TheUrban Agriculture Network estimated that800 million urban farmers harvest 15 percentof the world’s food supply in a variety ofways, from growing vegetables on rooftops orin market gardens on vacant plots to raisingfish in wastewater filtered through aquaticplants. Tilapia and carp cultivated this way inCalcutta provide safe food and a source ofincome. In Dar es Salaam, Tanzania, policiesto promote urban agriculture have been inplace since 1982; today, some 90 percent ofleafy vegetables come from urban agricul-ture, which employs 20 percent of residents,ranking as the city’s second largest source ofemployment. To bring more poor peopleinto urban agriculture, city governmentsworldwide could include space for farmers’markets in land use plans, grant temporaryleases for gardens in vacant lots, link urbanfarmers to sources of credit, and promoteorganic farming methods that use local com-post and eliminate the need for chemical fer-tilizers and pesticides.51

Other municipal decisions that affect thejob prospects of the poor include those con-cerning transportation and land use. Whetheror not someone can find a job in a city is inor-

dinately influenced by the famous real estatemaxim: location, location, location. The bestlocations for people who do not have extramoney to spend on transportation are thosethat are not far from places of business. Zon-ing laws that separate homes from businessesdiscriminate against the poor, as do decisionsto invest in infrastructure for private carsrather than dedicated bus lanes, cheap para-transit (such as mini-buses), safe pedestrianwalkways, or bicycle paths.52

Jeff Maganya, former East Africa TransportProgram Manager of the Intermediate Tech-nology Development Group, notes that politi-cians and policymakers in Nairobi, as in othernational capitals, generally have cars them-selves and are often out of touch with thetransportation realities of Nairobi’s car-lesspopulation. “More than 95 percent of moneythat is meant to tackle transport issues inKenya goes to motorization, while less than5 percent of Kenyans actually own cars,” saysMaganya. “Most people who make deci-sions,” he adds, “have only seen bicycles as apastime, as something they buy for their kids.So bicycles have been seen as recreationalthings, and have been heavily taxed.” Indeed,for many years, a large fee for registeringbicycles prevented poor people from buyingthem. When Kenya reduced its tax on bicy-cles from 80 percent to 20 percent between1986 and 1989, bicycle sales surged by 1,500percent.53

Curitiba, Brazil, launched a public bussystem in the 1970s that showed that givinghigher priority to the transport and locationneeds of the less affluent majority paid city-wide dividends—and some other cities inSouth America have followed suit. InCuritiba, several main roadways radiatingfrom the city’s core serve as express busways.Bus stops are futuristic glass tubes wherepeople pay in advance while protected fromthe elements, and then quickly step directly


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onto the bus without having to walk upsteps—all elements of a subway system at afraction of the cost. Before the buildingsalong the transportation corridors were fullydeveloped, the city bought up strategic landand set it aside for affordable housing. In1998, Mayor Enrique Peñalosa started sim-ilar transformations in Bogotá, Colombia.The city commissioned a fleet of cleaner,more efficient buses, invited bus operators tobid on them, and gave the buses their ownlanes to circumvent traffic. Electronic ticket-ing makes transferring between buses easier,and satellite-based communication boostssafety, as bus drivers can call for help whenneeded. Lima, Peru, is planning a similar sys-tem, and activists in Santiago, Chile, are alsopushing for one.54

A final area where governments could domore to help the survival prospects of thepoor is credit. Even in the United States,which has a long tradition of credit, it tooka spate of bank mergers in the 1990s to makebanks take note of a pioneering 1977 law, theCommunity Reinvestment Act. This requiredbanks proposing to merge with another com-pany to prove that they had met the creditneeds of low-income people in their com-munities. The effect was dramatic, write PaulGrogan and Tony Proscio in Comeback Cities:“It was as if the flat earth of retail banking hadsuddenly found its Columbus. Banks by thehundreds were planting new flags in the for-mer terra incognita of the inner city.” Totallending in poor U.S. neighborhoods aver-aged $3 billion a year between 1977 and1989; it soared to $43 billion in 1997.55

Finance is important in slums because thelack of affordable credit prevents people frombuilding infrastructure into poor settlementsfrom the beginning. In much the same waythat intermediate forms of tenure may offerpeople enough security to improve their liv-ing conditions, smaller-scale financial insti-

tutions may allow people to take a step towardworking themselves out of poverty. FromIndia to Brazil, small-scale lending or “micro-credit” is growing in significance as a sourceof loans for shelter and small business in poorurban neighborhoods. (See Table 7–2.)56

Just as titling programs might not be apractical first step in securing tenure for manypeople, a loan is a long shot for most of theworld’s urban poor. People need to be ableto document their solvency before they cancontemplate taking out a loan. For this rea-son, Shack/Slum Dwellers Internationalmakes group efforts to save money the cor-nerstone of its approach. In South Africa,slum communities that have joined the SouthAfrican Homeless People’s Federation haveestablished savings groups. They pooled theirsavings to start a revolving loan fund, whichopened for business in 1995 and attracted thesupport of the South African government.Slum residents in Cambodia, India, thePhilippines, Thailand, and Zimbabwe havelaunched similar savings groups. Assessingthe results of community-savings schemesworldwide, one analyst concludes that “whenmoney goes into community savings, it cir-culates many times—helping build housesand start small businesses; helping people incrisis; paying school fees and doctor’s bills—generating more assets and options for peo-ple’s future.”57

Opening Up City HallFinding ways for poor people to feel securein their homes and make a living are thingsgovernments should place at the top of their“to do” lists—but too often do not. Oppor-tunities to meet the needs of the pooresturban residents while making cities more ver-dant and vibrant places are rarely seized, as thewealthy, even if a small minority, have greaterpolitical power, especially when politicians


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can be bribed. Since the 1990s, poor peoplehave gained some measure of political poweras slum dwellers have united within cities andeven across national borders, as a number ofBrazilian cities have opened city budget deci-sions to public scrutiny, and as various citiesworldwide have started to truly engage citi-

zens in setting local priorities. National gov-ernments and international agencies must domore to support these efforts to open upcity halls around the world.58

In 2002, Patrick McAuslan, an expert onurban land law at the University of London,reflected on his decades of experience advis-


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Table 7–2. Selected Microfinance Institutions Operating in Slums

Self-Employed Women’s Association (SEWA) Bank,Ahmedabad, India

SEWA, which started in 1972, opened a bank in 1974. It now has 35,936 clients and nearly $11 million inoutstanding loans, half of which are for housing.All SEWA members are self-employed women, and 70 per-cent live in urban Ahmedabad.They make monthly savings deposits, held as lien against defaults, and have a 96 percent repayment rate.The municipal government and the private sector match savings of SEWAmembers to provide infrastructure in slums through the Parivartan slum upgrading project, which hashelped reduce serious illness in slums.

Payatas Scavengers’ Association Savings and Loan, Quezon City, Philippines

The association started in 1993, and loans began in 1997. It has 5,953 clients and $1.3 million in outstand-ing loans. Payatas is a village of 300,000 on a 15-hectare municipal dump outside Manila. Scavengers’ asso-ciation members are wastepickers in the bottom 30 percent of the national income distribution.About 80percent use their homes, made of scavenged building materials, for sorting trash to sell, reuse, or recycle.Members make weekly savings deposits and can take out loans for small businesses, land, or housing.Women receive 98 percent of all the housing loans.The government has asked the Payatas community to consult on housing issues.

uTshani Fund, for members of the Homeless People’s Federation, South Africa

The organization started in 1990, and began loans in 1995. It has 70,000 clients and $2.7 million inoutstanding loans. Homeless People’s Federation members are shack dwellers in the bottom 20 percentof national income distribution. Some 80 percent live in cities and 15 percent in peri-urban areas; 60 per-cent use their home for sewing, selling fruit, carpentry, or other micro-enterprises. Some 10 percent ofmembers are homeless and 60 percent live on land with no secure title, which is needed to receive hous-ing subsidies from the South African government.An NGO called People’s Dialogue helps memberssecure title and receive the subsidies, while uTshani provides loans.There is a repayment rate of 95 per-cent for enterprise loans and 93 percent for housing loans.Women receive 90 percent of loans, and allthe housing loans.

Banco Palmas, Palmeira District, Fortaleza, Brazil

The institution started in 1998 and had 900 clients as of 2001. Palmeira is a favela of 30,000, including 1,200 street children.With an initial loan of 2,000 reales from an NGO, the Palmeira Residents Associationstarted Banco Palmas to guarantee micro-loans with low interest rates without proof of income (neighborsserve as guarantors of good credit) and to issue credit cards, which are now used by more than 500 fami-lies. Between 1998 and 2000, local business sales increased by 30 percent and generated 80 new jobs. Bankclients have worked through a solidarity network to pave streets, clean drainage canals, and construct aschool. Some 65 percent of all bank clients are women.



ing policymakers: “I began to wonderwhether one of the problems that we’ve hadin dealing with land issues is that we’ve neveraddressed sufficiently the politics of land.The fact is that the current land tenure situ-ation generally accommodates the elites.”McAuslan also noted: “I think the singlemost important thing is to ensure that thepoor have a voice.”59

Government corruption not only mufflesthe voices of slum residents, it also exacts aprice. “When you take a complaint to a localauthority employed by the government,” saysIsaac Mburu, who lives in Nairobi’s Mtumbaslum, “if you go without cash, you won’t beserved.” A recent study by TransparencyInternational–Kenya found that 67 percent ofthe interactions that people had with publicofficials required bribes, but that the poorestand least educated encountered bribery in75 percent of their interactions with publicinstitutions. “Corruption is a tax on thepoor,” says Transparency International’sMichael Lippe.60

The emergence of Shack/Slum DwellersInternational and the national federations ofslum dwellers that constitute it have helpedto amplify the concerns of poor urban resi-dents. In Phnom Penh, Cambodia, to takejust one example, poor people formed the Sol-idarity and Urban Poor Federation in 1994to save money and convince the municipalgovernment to stop evicting people frominformal settlements. Through SDI, sidewalkslum dwellers from Mumbai helped PhomnPenh’s poor start their first savings groups.Pooling $5,000 in savings that attractedmatching funds from aid agencies, in 1998the Cambodians opened a fund that providesloans for housing and small businesses andthat has served 1,500 families so far. Today,the government has stopped evictions andworks with the federation to secure alterna-tive land for families displaced by development

projects.61

Another positive sign comes from Brazil,where local authorities have pioneered “par-ticipatory budgeting.” Several municipalitiestried different approaches to consulting moreactively with their constituents in the 1970sand 1980s. Then, in 1988, a new nationalconstitution devolved more power to sub-national governments and introduced sev-eral instruments that could be adopted atthe local level, including participatory bud-geting—a process that requires elected offi-cials to engage citizens in setting publicpriorities and to show clearly how funds willbe allocated, bringing democracy closer to thepeople.62

Porto Alegre, a city of 1.3 million in thesouth of Brazil, began to gain internationalfame after it adopted participatory budgetingin 1989. In the early 1990s, Brazil was rockedby scandals that pointed to private moneybuying political influence and public fundsbeing used for politicians’ private enjoymentat every turn. In 1992, President Collor wasimpeached on charges of influence peddlingand graft; in 1993, the same lawmakers thathad hounded Collor came under fire them-selves for taking bribes to dole out federalfunds to construction companies, charities,and municipal governments; and in 1994,politicians were among those implicated in amajor organized crime ring. The huge gulchbetween rich and poor—the wealthiest 10percent of Brazil claims 48 percent of thenation’s output, whereas the poorest 10 per-cent has less than 1 percent—only heightenedpublic outrage. Yet in the midst of all this,Porto Alegre was trying to change its localpolitics so that votes would mean more thanbribes.63

Local officials in Porto Alegre now presentinformation about the city budget in a firstround of public meetings in each of 16 dis-tricts. More than half the budget typically


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goes to salaries of city employees, while otherfunds may be earmarked to service municipaldebt. The share that is set aside for infra-structure to be determined through the par-ticipatory process varies from city to city andyear to year, but it is generally 10–20 percentof Porto Alegre’s total budget. After the ini-tial assembly, each neighborhood within eachdistrict holds an open meeting to rank theirmost pressing needs—for instance, do theyneed better water supply or a paved roadfirst?64

Then the jockeying for specific projectsbegins in earnest. In a second round of dis-trict meetings, citizens elect delegates to rep-resent their district on a city-wide budgetcouncil. These representatives take the neigh-borhood concerns and negotiate amongthemselves to agree on district-wide prioritylists to bring to the municipal budget coun-cil. That council, which also has memberselected in city-wide elections, then decideshow to distribute funds among districts.65

This experiment has amplified the voices ofPorto Alegre’s poor. Between 1992 and2002, citizens have directed more than $700million to needed projects. A survey doneafter the first year of participatory budgetingrevealed that most of the city’s poor peoplewanted clean water and toilets, whereas thegovernment previously assumed that theirtop priority was public transport. Today, 85percent of the city has sewer connections,compared with 46 percent in 1989. Streetpaving is another high priority in the poorestneighborhoods; 30 kilometers of streets arenow paved, drained, and lighted each year.66

In 1994, another Brazilian city, Belo Hor-izonte, took the same basic approach, adapt-ing it over time to the particular concerns ofits residents. Once district representatives areelected in Belo Horizonte, for instance, theytake a district-wide bus tour to see firsthandthe top priorities identified by each neigh-

borhood and to get a better sense of the rel-ative needs in each place. Housing quicklyemerged as a priority of many neighbor-hoods, and the issue was popularized by theHomeless Movement. In response, the citycreated an additional participatory budgetingprocess to address housing needs, allocatingabout $8 million in 2001–02.67

Today, people in more than 140 cities inBrazil are benefiting from participatory bud-geting. In July 2001, the government enacteda national City Statute that requires munici-palities to include citizens in urban planningand management through participatory bud-geting, among other measures. Only a bit ofthe budget is up for grabs, and invariablymore needs are identified than there is cashto address them. But the process does getimportant issues on the agenda and thwartscorruption. Even if only a small share of acity’s budget is open to the participatoryprocess, local authorities have to explainwhere the rest of the money is going.68

Another way that some local governmentshave been engaging citizens is by adopting alocal version of the Agenda 21 for environ-ment and development that national leadersendorsed at the 1992 Earth Summit in Rio.At the urging of an association of local author-ities, the International Council for LocalEnvironmental Initiatives (ICLEI), delegatesin Rio included the goal that “by 1996, mostlocal authorities in each country should haveundertaken a consultative process with theirpopulation and achieved a consensus on aLocal Agenda 21.”69

To draft a Local Agenda 21, each gov-


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Porto Alegre was trying to change itslocal politics so that votes would meanmore than bribes.


ernment must consult extensively with citizensto survey existing social, economic, and envi-ronmental conditions and to draft a list oflocal priorities. By 1996, some 2,000 munic-ipalities worldwide had introduced some ver-sion of a Local Agenda 21, and by 2002 thefigure reached 6,416 local governments in113 countries. Mayors in mostly northerncountries initially dominated the effort, withLeicester in the United Kingdom and Hamil-ton-Wentworth in Canada being early pio-neers, but southern cities are now emergingas strong leaders. For example, once citizensbecame engaged in Porto Alegre’s budgeting,the city revamped its environmental plan-ning to include greater citizen involvement.Manizales in Colombia and Nakuru in Kenyaare also showing the way.70

Mayors, local leaders, and citizens are verymuch on the front lines of reconciling theneeds of poor people for a better standard ofliving with the health of the environment—and they need support from their nationalgovernments. In 2001, local authoritiesengaged in developing Local Agenda 21swith their citizens identified three areas wherethey could use such help: sufficient funds toimplement new efforts; political support byheads of state and other national leaders; andrevision of a wide variety of national taxes,regulations, and standards to reward sus-tainable development practices. By grantingmore power to local governments whileallowing citizens to elect local officials, somenational governments have allowed the poorto have more say than ever before. RichardStren, Director of the Centre for Urban andCommunity Studies at the University ofToronto, points to national laws enacted byBrazil, India, the Philippines, and South Africain the last decade or so that have helped openup city halls.71

A whole chapter of South Africa’s 1996constitution focuses on local government

and has opened the way for more inclusivegovernance in Johannesburg and all its cities.In 1999, Johannesburg’s local governmentlaid out a three-year plan, iGoli 2002, tobegin to make up for the imbalances betweenservices afforded to wealthy white neighbor-hoods and poor black townships that becameentrenched through years of apartheid. Whilethe plan represents a step forward, a great dealof debate has centered on whether serviceswill be provided by government or privatecontractors, and it is still too early to measuresuccess.72

International agencies could also be moreeffective advocates for the urban poor. Onechallenge the World Bank has in supportingurban development is that its negotiationshave to be with national, not local, govern-ments. In February 2002, the Bank solicitedthe advice of Jane Jacobs on this point. Jacobsrose to prominence in the 1960s by analyz-ing policymakers’ approach to slums in theUnited States, but much of what she observed40 years ago in New York City resonates withpeople familiar with slums in many otherparts of the world today. Writing in The Deathand Life of Great American Cities in 1961, forexample, she noted: “Conventional planningapproaches to slums and slum dwellers arethoroughly paternalistic. The trouble withpaternalists is that they want to make impos-sibly profound changes, and they chooseimpossibly superficial means for doing so.To overcome slums, we must regard slumdwellers as people capable of understandingand acting upon their own self-interests,which they certainly are. We need to discern,respect, and build upon the forces for regen-eration in real cities. This is far from trying topatronize people into a better life, and it is farfrom what is done today.”73

When queried by the World Bank in 2002,Jacobs similarly pulled no punches: “If youreally are serious about supporting cities, you


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should be able to lend directly to cities andnegotiate directly with them….If you areintimidated into dealing only with nationalgovernments, your intended help for cities willbe inefficient at best and perhaps self-defeat-ing.” With the formation of the Cities Alliancementioned earlier, the World Bank is still notlending directly to local governments, but ithas taken an important step toward buildingstronger relationships with them.74

International agencies can lend some mea-sure of political support by bringing localauthorities to the table to figure out how tomake urban development work for peopleand the planet. There is no legally bindingtreaty that compels nations to improve the liv-ing conditions of their cities while at thesame time reducing the demands that urbanareas make on Earth’s resources. But in 1976,in Vancouver, delegates from national gov-ernments did zero in on the role of humansettlements in the international push to rec-oncile environmental and development con-cerns. Twenty years later, at a Cities Summitin Istanbul, hundreds of local governmentsand NGOs joined representatives of 171countries in endorsing a Habitat Agenda towork toward a better urban future.75

The United Nations agency charged withcarrying out the Habitat Agenda is UN-HABITAT. For much of the 1990s it strug-gled without a permanent head, solidmanagement, or stable funding to raise theprofile of its twin goals: to ensure adequateshelter for all people and to make cities,towns, and villages greener and more equi-table places to live. But in the twenty-first cen-tury, UN-HABITAT has turned a corner,led by a charismatic new Executive Director,Anna Tibaijuka, who has inspired the confi-dence of national governments to give theorganization needed funds.76

For local authorities, the run-up to the

World Summit on Sustainable Developmentheld in Johannesburg in August-September2002 was somewhat similar to the receptionthey received in Rio 10 years earlier. The factthat local authorities and NGOs were engagedat all in the talks was a big step forward. ButUN-HABITAT, ICLEI, and other advocatesof good urban governance faced an uphillbattle in trying to focus national leaders onthe importance of cities to the future of sus-tainable development. They had to fight toinclude in official documents acknowledge-ment of the important role that cities could,should, and must play in charting a course fordevelopment that takes into account the needsof the poorest as well as the finite capacity ofthe planet.77

But if the negotiations and discussions atthe World Summit were not as useful as theycould have been for local governance andthe role of cities, the backdrop of Johannes-burg, South Africa, provided a compellingimage of a divided city that had thrown off theyoke of apartheid—and might, just possibly,begin to unite itself and chart a course forurban development that put its poorest peo-ple and their need for a healthy environmentfirst. In the coming decades, with most of theworld’s people living in cities for the firsttime in history and at least one in six peoplemired in extreme poverty, uniting dividedcities will become an even greater global chal-lenge. To rise to the task, governments mustcombat corruption and open city halls up toall their citizens, especially the poorest ones.

South Africa’s 1996 constitution focuseson local government and has openedthe way for more inclusive governancein all its cities.

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