By Andrea Bonovicino
A recently published paper by MIT researchers identifies numerous reasons why slums in developing countries are “traps” that keep their inhabitants in poverty, rather than a way to tap into urban wealth and springboard up the economic ladder. The study also emphasizes how existing policies to address slums (such as government enforced evacuations, benign neglect, and attempts at basic infrastructure improvements) have failed to address the root cause of the problem: a basic lack of incentive for slum inhabitants to improve their living conditions. In another discussion of the slum problem and the MIT paper, The Economist traces this lack of incentive to the traditional explanation that slum inhabitants usually have no ownership interest in their homes.
Both sources suggest that many problems endemic to slums can be addressed by providing inhabitants with some form of property rights. Inhabitants would then be encouraged to invest in their living conditions, hopefully resulting in a more sanitary and developing community.
The provision of property rights to slum dwellers has often been proposed to solve slum problems, but the details of these schemes are still being worked out. According to Searchlight South Asia, India began the process of providing property rights in slums as early as 2012 and faced practical difficulties almost right away. Issues regarding who will be eligible to receive such rights, whether the rights can enable inhabitants to receive loans, and increases in illegal slum communities caused by the new attraction of rights all caused debate.
While the success of India’s process is still undetermined, the point made by the MIT researchers remains persuasive: without some incentive for slum inhabitants to become interested in their living conditions, any effective change is unlikely.
Sources
http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.4.187
http://www.economist.com/news/finance-and-economics/21595939-shanty-towns-may-be-more-trap-economists-thought-down-and-out
http://urbanpoverty.intellecap.com/?p=701