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## Poverty and Development (3rd edn)

Tim Allen and Alan Thomas
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# p. 50023. The Urban Challenge and Life in the City

• Jo Beall

### Abstract

This chapter describes the challenges posed by the concomitant growth of urban poverty and inequality, sometimes in the absence of economic growth, against a background that traces processes of urbanization, urban growth, and urban development in countries of Africa, Asia, and Latin America. The exact relationship between experiences of poverty and city life remains unclear, and it may be important to redirect the questions being asked in relation to the city. Rather than focusing on 'life in the city', it might be more beneficial to ask what is necessary to ensure 'a city for life'. A key priority will be addressing the capacity of urban institutions and systems to meet the challenges of city management and urban governance in the context of social, economic, and demographic change. There is a need to recognize the physical, structural, and institutional role of 'the city' in shaping the experiences of and the responses to poverty.

### 23.1 Introduction

In the year 1990 when the first edition of Poverty and Development was published, the majority of the world’s poor lived in rural areas. Pro-poor international development policy largely focused on agriculture and integrated rural development or industrialisation strategies. Cities as such were largely obscured from development policy. But by 2008, for the first time in human history, globally more people were living in towns and cities than in the countryside, heralding what has become known as the first urban century (see Figure 23.1). Urban poverty was also impossible to ignore and, in time, ‘the city’ could no longer be ignored. When Agenda 2030 and the SDGs replaced the MDGs, for the first time a goal was introduced to make cities and settlements inclusive, safe, resilient, and sustainable.

Cities have long been characterised as magnets attracting a heterogeneous mix of human creativity and ingenuity. They encourage diversity of individual interaction and foster collective association. Equally, urban centres have been portrayed as the sites of pernicious social relations characterised by the cheek-by-jowl manifestations of extreme wealth and grinding poverty, of ostentatious power, and anonymous vulnerability. However characterised, the key development issue that still needs addressing is the capacity of urban institutions and systems to meet the challenges of city management and urban governance in the context of social, economic, and demographic change.

Writers as diverse as Adam Smith (1970), Karl Marx (1972), and Friedrich Engels (1968) all saw large urban centres as engines of national economic growth while more recently cities have been identified as catalysts for technological innovation and economic advancement, derived from their density, diversity, and p. 501dynamic nature, generating surpluses and investment not only for themselves but also their hinterlands (Beall, Guha-Khasnobis, and Kanbur 2010). Urban economists are united in seeing cities and large urban centres as sites of opportunity and growth (Henderson 2003; Overman and Venables 2010), with Glaeser’s Triumph of the City (2011) celebrating the city as the pinnacle of human achievement. Glaeser does recognise that cities are also home to human misery (Davis 2006) but argues that there is nevertheless a lot to like because they attract the poor with the promise of a better life than the countryside could ever deliver.

Published shortly after The Triumph of the City, Thomas Piketty’s Capital in the 21st Century (2014) focused on wealth and income inequality in Europe and the United States. With others he went on to establish the World Inequality Lab, which draws on the research of over a hundred academics and recently concluded that benefits from the world’s capital gains since 1980 went to a mere 76 000 people or 0.001 per cent of the global population. The bottom 50 per cent did not participate in increased prosperity and their prediction is that income inequality will continue to grow (World Inequality Lab 2018). Other research suggests that this bottom 50 per cent of the population does not live solely in rural areas and in fact, although rural poverty still outstrips urban poverty, the latter is increasing at a faster rate (Ravallion, Chen, and Sanguraula 2007).

While looking at life in urban areas of the Global South it is useful to keep in mind three key questions:

What are the social, economic, and environmental challenges and opportunities faced by millions of people in urban centres in the twenty-first century?

What needs to be known about cities to understand them as spatial congregations of diverse people and activities? How can a better understanding of urban centres help improve the lives of the poor?

Approaches to urban development have changed over time. What are the strengths and weaknesses of past policy and what benefits do recent policy directions have over earlier approaches?

Against a background that traces processes of urbanisation, urban growth, and urban development in p. 502countries of Africa, Asia, and Latin America, this chapter explores the challenges posed by the concomitant growth of urban poverty and inequality, sometimes in the absence of economic growth. The implications for urban development are explored through a discussion of two key necessities of life and how these play out in urban centres: earning a living and ensuring secure shelter and safe living environments. The chapter then discusses collective action and citizen engagement and how this plays out in urban settings. It concludes by reviewing successive urban policy approaches including an analysis of the current New Urban Agenda and the need to include a focus on the role of ‘the city’ itself in understanding and addressing urban poverty.

### 23.2 Making sense of the urban experience

Earlier chapters explored the rise of industrial capitalism from the late eighteenth century and its impact on a wider world in relation to Polanyi’s ideas in The Great Transformation (1957). An enduring legacy was the growth of urban centres, a change in the character of cities, and in their relationship with the world beyond them. The well-known geographer David Harvey (1973) later employed Polanyi’s (1968) three distinctive modes of economic integration—reciprocity, redistribution, and market exchange—as a means for understanding the changing relationship between society and urban form. For Polanyi, where there is an accumulation of surplus, and where hierarchical societies predominate, redistribution occurs, involving a flow of goods or rights over production to support the activities of an élite. According to Harvey this process has a spatial centre and so a transition to urbanism becomes possible, although not automatic.

Whereas previously urbanism had been understood as a way of life associated with residence in an urban area (Wirth 1938), in Social Justice and the City, Harvey (1973) defined urbanism not simply as a ‘thing in itself’ but as ‘relationally defined’. In other words, he fundamentally rethought the relationship between power, space, and urban form, revealing cities to be anything but neutral spaces. Instead he saw them as spatial expressions, as concrete manifestations of social relations based on power, particularly economic power. Harvey’s analysis had a tremendous impact on geographers and non-geographers alike. His influence was to demonstrate irrevocably that social relations do not play themselves out on ‘the head of a pin’ but within contested space.

Urbanism: A term originally coined by the Chicago School sociologist, Louis Wirth (1938), who used it to refer to a way of life associated with living in an urban area. It is sometimes associated with social dislocation and the decline of community but more generally refers to the extent to which a given population conforms to what is deemed to be an urban lifestyle.

Harvey has not been without his critics. In Social Justice and the City he articulated a linear view of progress familiar to modernisation and Marxist theorists alike. For this he has been challenged and for focusing on relationships founded on economic inequality, to the exclusion of other asymmetrical social relationships such as those based on gender (Massey 1994). Ira Katznelson (1996) observed that Polanyi was not just the materialist historian of economic exchange deployed by Harvey. For Harvey urbanism ‘necessarily arises with the emergence of a market exchange mode of economic integration with its concomitants – social stratification and differential access to the means of production’ (Harvey 1973: 239; emphasis in the original). Thus, the city becomes a place for disposing of surplus and the urban economy the site in which the circulation of surplus takes place.

However, as Katznelson points out, in The Great Transformation Polanyi was also concerned with the political origins of modern liberalism, its doctrines and institutions.

A full Polanyian analysis of housing and spatial segregation, rather than the partial one Harvey provides, perforce would contain a more multiple account of the origins and reproduction of housing markets, more attention to the politics of spatial contest … more notice of group pluralism in more than the single dimension of class … and more of an orientation to the mutual impact of institutions, political norms, and patterns of identity and agency … considering ‘the worker’ at home, at work and as a citizen (1996: 61).

This chapter considers urban dwellers at work, at home, and as citizens. It takes its cue from Harvey in that cities are seen as being built on material foundations and as being relationally defined. However, it also subscribes to the critique that urbanism is about p. 503more than the economy. Other social relations mediate power dynamics alongside class, such as those based on gender, ethnicity, spatial location, or length of residence in a town or city. All in turn infuse urban political institutions and local political struggles. This multifaceted lens needs to be employed when assessing the economic dynamics explored in Glaeser’s Triumph of the City (2011) and Piketty’s Capital in the 21st Century (2014).

### 23.3 Urbanisation and the growth of mega-cities

Many countries in the South have experienced unprecedented growth in their national populations. Although fertility rates are generally lower in urban centres compared with rural areas, natural increase is the single most important factor in urban growth. Nevertheless, rural-to-urban migration remains significant, particularly in small and medium-sized towns and peri-urban areas. Even in larger urban centres, in many Southern contexts rural–urban migration has ensured that urban populations are overwhelmingly youthful, and, as such, contribute in turn to natural increase in cities (Fox and Goodfellow 2016).

There are important regional differences in global patterns of urbanisation. At the beginning of the twentieth century only Britain had an urban population that exceeded the number of rural inhabitants, although over the course of the century this became a feature of all industrialised countries. By the 1980s, most people in Latin America, the Caribbean, the Middle East, and East Asia also lived in urban centres. Even in poorer parts of the world, urbanisation has proceeded apace. While in 1950 only 30 per cent of the world’s population was urban, today 55 per cent reside in urban areas. Although Africa is presently the least urbanised continent, it is urbanising fastest. Close to half the world’s urban dwellers reside in settlements with fewer than 500 000 inhabitants, while around one in eight live in megacities with more than 10 million inhabitants. By 2030, the world is projected to have 43 megacities, most of them in developing regions. Moreover, just three countries, India, China, and Nigeria, together are expected to account for 35 per cent of the growth in the world’s urban population between 2018 and 2050 (United Nations 2018).

Urban growth: The growth in the absolute numbers of people living in urban areas. It usually results from natural increase (the excess of births over deaths) within urban centres but can also be the result of migration into urban centres.

Urbanisation: The proportion of a national population living in urban centres. An increase in the level of urbanisation can result from rural–urban migration but usually results from rural settlements growing to a size where they are reclassified as urban, or boundaries of cities or metropolitan areas being extended to incorporate areas which were previously classified as rural. The urbanisation process refers not only to changes in population size and distribution but also involves an analysis of the related economic, social, and political changes (Fox and Goodfellow 2016).

#### The growth of mega-cities

These demographic trends have seen the ascendancy of mega-cities, which are simply very large cities by virtue of their population size. Figure 23.2 lists the ten largest cities in 1950 and as projected for 2030 in terms of the population of the urban agglomeration. (See the World Map for all mega-cities in terms of urban agglomeration population, as in 2018.) A slightly different picture is given if one considers the whole of a metropolitan area, including surrounding districts of slightly lower population density with strong social and economic links to the urban centre. On this basis, the largest cities are Tokyo, Shanghai, and Jakarta, each with populations of over 30 million inhabitants (although Jakarta is only number 30 in terms of urban agglomeration alone). On this basis also, China alone has 15 megacities and India has six. South America has five and Africa, Europe, and North America each have three.

Despite the growth of large cities, it is important to guard against the panic provoked by alarmist projections portending urban explosion and catastrophe in cities of unmanageable size. Urban growth is often assumed when in fact the size of an urban centre has simply increased as a result of boundary change and often rates of urbanisation are not unprecedented but simply are growing off a low base (Satterthwaite 2010).

The dominant driver of urbanisation in most countries is generally thought to be economic change. This is shown by the high concentration of urban populations in the largest cities of the world’s largest economies, as well as the strong association between a state’s per capita income and its level of urbanisation. Increases in levels of urbanisation for most low- and p. 504middle-income countries over the last 50 years have channelled increases in the proportion of GDP generated by industry and services and the proportion of the labour force working in these sectors. This has led many development economists to link economic growth to industrialisation rather than urbanisation. The general view has been that, globally, those nations with the most rapid economic growth are usually those that have urbanised most, and those with the poorest economic performance that have urbanised least (Satterthwaite 2010: 91).

While there is no doubt that economic expansion stimulates urbanisation, a strictly economic explanation fails to account for the phenomenon of ‘urbanisation without growth’, observed principally in sub-Saharan Africa in the last two decades of the twentieth century (Fay and Opal 2000). Late onset urbanisation has occurred in parts of less developed regions of the world despite economic stagnation. Often understood as the lure of the city, the ‘bright lights’ theory of urbanisation (Todaro 2000), more recently it has been explained as a historical process driven as much by technological change as individual choice or the economy. For instance, surplus food production to feed non-agricultural workers, advances in medicine and transport networks, as well as institutional changes such as the development of land markets and health care systems are all part of the pull of cities (Fox 2014).

Recent decades have undoubtedly brought great changes to the nature of settlements—whether cities, large or small towns, or villages. The fact that the international economy is becoming ever more integrated p. 505has served to reorder the relative importance of urban centres around the world and has led to economic, social, and political upheavals within them. Some cities have become particularly significant by virtue of the functions they perform in the new global economy and they are known as world cities.

Mega-cities: Very large cities, defined by their population size, usually defined as those with populations exceeding 10 million. By 2028 the world is projected to have 43 mega-cities. Most are located in China and India and other developing regions (United Nations 2018).

World cities (or global cities): Defined and differentiated from other large cities by virtue of the functions they perform, functions which drive the global economy such as providing financial or transport and communications infrastructure and services. Most are in the advanced industrialised countries but Rio de Janeiro is considered to be a world city and Cairo and Johannesburg are thought to be on their way (Friedmann 1986; Friedmann and Wolf 1982).

Cities: As defined by the UN, ‘cities’ are over 100 000, ‘million cities’ are over a million, and ‘big cities’ are over 5 million in size.

Urban centres: According to the UN, these are settlements of over 20 000 people. However, there are different national definitions of cities, towns, and urban centres. These are not only based on population size but may describe administrative areas (United Nations 2014).

Because they are highly visible and economically influential, much attention is paid to world cities and mega-cities. Yet it is important to recognise that they do not represent the majority of the urban population. The fastest growing urban centres are small and medium cities with less than one million inhabitants. In Africa they account for 65 per cent of the urban population and globally they encompass 59 per cent of the world’s urban population. Despite this, policy attention has been disproportionately focused on megacities (UN-Habitat 2016: 9). In what follows, it is important that the experience of poverty and inequality can differ hugely between those subsisting as peri-urban agriculturalists and those battling the challenges of overcrowding and ill health in the informal settlements on the periphery of large cities or their sprawling slums.

Slums: Generally defined as places in cities where people are concentrated in substandard conditions. National governments define slums through their features: lack of basic services, substandard housing or illegal and inadequate dwellings, overcrowding and high density, unhealthy living conditions and hazardous locations, insecure tenure or irregular or informal settlements. They are associated with poverty and social exclusion although some are governed by slumlords with power and means.

Slums vary from place to place and state to state. UN-Habitat points to two kinds of slums:

Slums of hope: ‘Progressing’ settlements characterised by new, usually self-built structures and usually illegal inhabitants (i.e. squatters) that are in, or have recently been through, a process of development, consolidation, and improvement.

Slums of despair: ‘Declining’ neighbourhoods, in which environmental conditions and domestic services are undergoing a process of degeneration (UN-Habitat 2003: 9).

### 23.4 Urban poverty and inequality

According to modernisation theory and neoclassical economics, urban poverty should have been a temporary phenomenon, but the experience was very different, with contemporary cities exhibiting extremes of wealth and poverty, with burgeoning informal settlements and slums and vast numbers of people earning a living in the informal economy.

Despite this, Michael Lipton’s (1977) influential urban bias thesis continued to hold sway. He argued that while most poverty was found in rural areas, the demands of urban economic elites prevailed. His thesis was reinforced in the 1980s when Robert Bates (1981, 1988) extended Lipton’s analysis in his study of agricultural systems in sub-Saharan Africa. That the political power of city elites eclipsed the voice of smallholding agriculturalists is a view that has continued to influence development scholars and policy makers until very recently. Yet in reality, in 2007 and 2008, the world witnessed spontaneous protests and riots in over thirty cities across the world over rising food prices, the result of a policy of raising agricultural prices to benefit peasant farmers (Patel 2008; Pilkington 2008).

Subsequently, scholars have made the point that there is little evidence of coherent rural and urban classes, unconnected and with uniform and diametrically opposed interests. Nor is there much evidence of a systematic bias in public expenditure, particularly since the late twentieth century (Jones and Corbridge 2010).

In reality, there is not a hard binary between the ‘urban’ and ‘rural’. Instead, settlements exist on a nuanced continuum with clear and positive inter-linkages between rural and urban economies. Even at p. 506an individual level there is ample evidence of circular migration between rural and urban areas (Potts 2010). This view was given weight by the World Bank’s 2009 World Development Report, which made extensive use of a new agglomeration index (Uchida and Nelson 2010) and the World Bank (2013) Global Monitoring Report on rural-urban dynamics and the MDGs. That said, there is evidence of the differential impact of national level policies on rural and urban populations. A classic example was the structural adjustment policies that characterised the 1980s and 1990s. These had a marked bias towards rural investment and together with the introduction of privatisation and accompanying service and user fees, led towards cost of living increases in urban centres with a disproportionate impact on the urban poor (Moser 1996).

Another illustration can be found in the Poverty Reduction Strategy Papers that in the early years of the twenty-first century had to be produced by or on behalf of countries seeking development assistance in order to confirm their eligibility. A systematic review of these reports demonstrated that nearly all had a strong emphasis on rural poverty alleviation and demonstrated a generally poor understanding of urban poverty (Mitlin 2004). Despite historically unprecedented rates of urban population expansion in the region during this period, shelter lending was cut significantly. In sum, the significant anti-urban turn in development discourse and policy beginning in the 1970s ran through till the end of the twentieth century.

In various late twentieth century efforts to get policymakers to recognise and respond to urban poverty, much was made of its very particular characteristics. These broadly fall into one or both of two groupings. First, poor urban dwellers live in a largely monetised economy. There is some reliance on urban agriculture, particularly on the periphery of cities. Yet in general they are unable to rely on subsistence agricultural production and pay more for their goods and services. As such they are more vulnerable to changes in market conditions, price increases, and any decline in real wages. The operation of the urban land market is a particular feature of urban areas, where the poor face insecurity of tenure and can be squeezed off land when it rises in value and forced into peripheral or marginal locations.

A second factor distinguishing the day-to-day life of poor urban dwellers from their rural counterparts is their relationship with the built environment. Poor living conditions, such as appalling overcrowding, contaminated water, poor or absent sanitation, lack of services and the constant threat of floods, landslides or industrial pollution, all mean that the urban poor are exposed to severe environmental health risks.

While rural poverty remains a crucial challenge in many parts of the world, it is increasingly recognised that towns and cities are critical sites of poverty and many policymakers now accept the importance of catering for towns and cities in a predominantly urban future (see Figure 23.3). An important reason for this relates to improvements in our measurement and understanding of evidence on the prevalence of urban poverty.

Over time, conceptualisations and measurements of poverty have evolved, with the earliest conceptions being based on the notion of absolute or subsistence poverty and later approaches based on the notion of relative poverty or deprivation (see Chapter 2). The former dates back to the nineteenth century, referring to a lack of the basic means to survive. Today it is manifest in poverty lines, an income measure enough to purchase sufficient calories to survive or a basket of essential goods pertinent to a particular context. These can vary from place to place and over time. The MDGs originally used the idea of ‘a dollar a day’. This was the World Bank’s figure of US$1 a day at 1990 purchasing power parity, since revised upwards, largely because of inflation, to US$1.25 per day (Ravallion, Chen, and Sangraula 2009), and again in 2016 to US\$1.90 per day at 2011 purchasing power parity.

These sorts of indices can mask differences in the way poverty is experienced in particular contexts. For example, rural dwellers might be dependent on access to fertile land for basic survival, while urban labourers would be more dependent on waged employment opportunities. As a result, comparing rural and urban poverty headcount measures may underestimate the extent of urban poverty (Mitlin and Satterthwaite 2013).

Over time a number of efforts have been made to develop holistic quantifiable measurements of human development, including the UNs’ Human Development Index and, more recently, the Multidimensional Poverty Index introduced by the UN in 2010 (Chapter 2). This broader approach, very much influenced by Amartya Sen’s (1999) ‘capability approach’, can be identified as well in the World Development Report 2000:

Poverty is pronounced as deprivation in well-being. But what precisely is deprivation? The voices of poor people bear eloquent testimony to its meaning. To be poor is p. 507to be hungry, to lack shelter and clothing, to be sick and not cared for, to be illiterate and not schooled. But for poor people, living in poverty is much more than this. Poor people are particularly vulnerable to adverse events outside their control. They are often treated badly by the institutions of state and society and excluded from voice and power in those institutions (World Bank 2000: 15).

What became clear through successive approaches to poverty and poverty reduction was a growing recognition of context. In time this came to influence the understanding of poverty and how to tackle it in urban centres.

Both the UN and World Bank approaches influenced the MDGs, which were developed by a small group of specialist scholars and policymakers to address extreme poverty globally. They were subsequently adopted in 2000 by 189 countries, with tangible targets to be achieved by the end of 2015. The number of people living in extreme poverty did halve between 1992 and 2010 but much of the progress was attributable to China and East Asia (see Chapter 1; see also Fehling, Nelson, and Venkatapuram 2013). Some countries and major regions, notably in sub-Saharan Africa, did not meet the targets. Conflict was a major factor, as was climate change and environmental degradation. Poverty based on social identity such as gender, age, ethnicity and disability or on geographical location persisted.

The only specific mention of urban challenges was Goal 7D: to improve the lives of at least 100 million slum dwellers by 2020. Ironically, this goal was met:

Between 2000 and 2014, more than 320 million people gained access to either improved water, improved sanitation, durable housing or less crowded housing conditions, which means that the MDG target was largely surpassed. The proportion of urban population living in slums in the developing regions fell from approximately thirty-nine per cent in 2000 to thirty per cent in 2014 (UN 2015: 60).

However, although the target was met, the absolute numbers of urban residents living in slums continued p. 508to grow, meaning more rather than fewer people lived in slums. In 2000, at the start of the MDGs, it was estimated to be 792 million people and in 2015 when the MDGs were assessed, over 880 million urban residents were estimated to live in slum conditions (UN 2015: 60). Overall, the MDGs were seen as not up to the realities of addressing urban poverty (Mitlin and Satterthwaite 2014).

The 2030 Agenda for Sustainable Development, which embraces the SDGs, replaced the MDGs in January 2016. They were decided upon through a far more extensive and inclusive process of global consultation and the aim is to achieve the goals by 2030 through a greater focus on the causes of poverty. They do not simply focus on developing countries but emphasise universal responsibility for a sustained global future. Unlike the MDGs, the SDGs included among their ‘Seventeen goals to transform our world’, a specific goal on Sustainable Cities and Communities (see Box 23.1). This finally gave policy recognition to the long-argued position that there needed to be an urgent response to the pressures of urbanisation and urban poverty.

#### Box 23.1 SDG 11 Make cities inclusive, safe, resilient, and sustainable

The rationale for Goal 11 is that in 2016, close to 4 billion people—54 per cent of the world’s population—lived in cities and that number is projected to around 5 billion people by 2030. Cities enable people to advance socially and economically but rapid urbanisation has brought enormous challenges. These include increased congestion and pollution and uncontained urban sprawl; growing numbers of slum dwellers, a shortage of adequate housing, inadequate basic services, and poor or non-existent infrastructure, all of which make cities more vulnerable to disasters. Better political representation and participation, as well as improved urban planning and management, are needed so cities can continue to develop while at the same time making the world’s urban spaces more inclusive, safe, resilient, and sustainable. Progress to date is that 149 countries are now developing national-level urban policies.

There is evidence of small gains. For example, safe removal and management of solid waste represents one of the most vital urban environmental services. Uncollected solid waste blocks drains, causes flooding, and may lead to the spread of water-borne diseases. On the basis of data from cities in 101 countries from 2009 to 2013, 65 per cent of the urban population was served by municipal waste collection.

However, air pollution is a major environmental health risk. In 2014, nine of ten people who live in cities were breathing air that did not comply with the safety standard set by WHO.

Source: United Nations 2017a.

One of the challenges will be to measure progress on the SDGs and particularly Goal 11. In the past it has been difficult to accurately assess the scale and scope of urban poverty due to a paucity of basic, comparable data and difficulties in capturing the contextual complexity of urban vulnerability (Mitlin and Satterthwaite 2014). Nevertheless, the data have improved greatly over the last 20 years. In addition to improved national statistics there are well-designed and executed household surveys in many countries that help elucidate understanding of conditions in urban areas. At the World Bank, drawing on household surveys and other sources, a data set was created that aimed to shed new light on whether and the extent to which poverty was becoming an urban phenomenon, and on the role played by urbanisation in reducing poverty overall. Covering about 90 countries and representing more than 90 per cent of the population in the developing world, findings showed that 75 per cent of the developing world’s absolute poor still live in rural areas, with some marked regional differences. However, it also showed that the proportion of the poor living in urban areas was rising more rapidly than the rate of urbanisation of the population as a whole (Ravallion, Chen, and Sangraula 2007; Ravallion 2016).

This landmark research concluded that because of its association with economic growth, urbanisation was contributing to a reduction in poverty overall. In other words, the proportion of the global population in poverty has fallen considerably since 1990 largely due to the economic growth associated with urbanisation but declines in poverty levels have been more rapid in rural areas (Ravallion, Chen, and Sangraula 2007). Ravallion (2016) links rising urban poverty to more rural migrants coming into the cities and the impact of urbanisation on the living standards of those remaining in rural areas, for example through higher remittances from the family and friends in the cities and fewer people competing for available rural employment opportunities. There are obviously gradations between villages and small towns, p. 509towns and small cities, and medium-sized cities and mega-cities but the trend seems to be that ‘poverty is becoming more urban in more urbanised countries’ (World Bank 2013: 87).

Particularly important for understanding and monitoring urban poverty is the technological revolution in data, complex modelling, and innovations in geospatial science, which allow for ‘the integration of spatial and statistical analysis and the nesting of local, national and global indicators’ (Parnell 2015). Such interdisciplinary approaches, which marry insights possible from geographical information systems (GIS) with big data and other forms of spatial analysis, offer new opportunities not only for understanding and planning smart cities but also for identifying and addressing issues of urban poverty and inequality (Singleton, Spielman, and Folch 2018). Such data can also help highlight differences across varying urban centre sizes and types.

One such example, illustrated in Figure 23.4, is the ‘night lights approach’ (satellite imagery from outer space). Night lights refer to the display of night time electrical lighting visible from space. They have been used as a proxy to estimate GDP at a national (Henderson, Storeygard, and Weil 2012) and subnational level (Bickenbach et al. 2013). The use of night lights as a proxy for economic activity assumes that as most consumption and investment activities require lighting at night, the intensity of night lights (or its growth over time) can be used as a proxy for the intensity of economic activity (or economic growth). Although controversial, the potential offered by night-lights imagery for understanding poverty and inequality in cities is compelling. For example, it starkly illustrates differential access to services such as electricity and accompanying social and economic opportunities. It also holds the potential to provide a more accurate estimation of informal economic activity than is usually captured statistically.

Urban centres are divided by differential access to income as well as to consumption, public spaces and services, education, technology, and employment. More than two-thirds of the world’s population live in urban centres that are more unequal today than they were 20 years ago (UN-Habitat 2016: 74). So not every city is as triumphant as Glaeser (2011) would have us believe. Alternatively, within his triumphant cities perhaps not everyone benefits equally. There are inequalities between cities and within them and these are very often associated with national and global trends. This in turn reminds us that not all good things go together. Economic growth can lift p. 510people out of poverty at a national level at the same time as exacerbating inequality within urban centres, as demonstrated in Box 23.2.

#### Box 23.2 India—growth, poverty, and inequality

Until the early 1990s, economic growth in India tended to come with a relatively low impact on poverty reduction. Given this, over the same period, India was also successful in avoiding rapidly rising inequality. Major policy regime changes in India ensued in the aftermath of the macroeconomic crisis of 1991, which included trade liberalisation, reduction in tariff and non-tariff barriers to imports, a flexible exchange rate and easing of restrictions on both domestic and foreign investors.

Reforms gave rise to growth. The rate of growth in India’s Net Domestic Product per capita was under two per cent per annum between 1958 and 1991 but it more than doubled in the period after 1992. There was much hope in India that higher growth rates in the wake of economic reforms would bring a faster pace of poverty reduction and, indeed, urban economic growth, particularly in services and trade, emerged as a primary driver of poverty reduction. However, while this brought benefits to India’s poor at large, it was in a context of rising inequality, particularly in urban areas. There has also been a marked urbanisation of poverty in India, raising doubts as to how much the urban poor have shared in the gains from higher growth rates.

Rural growth has continued to be important for rural poverty reduction in India but while in the pre-1991 period urban growth had no discernible impact on rural poverty, thereafter it did. The effect of urban consumption growth on national poverty reduction has been a striking feature of the post-1991 period. In the past, rural poverty measures were historically higher than for urban areas. However, they have been converging over time. It is possible to identify a marked urbanisation of poverty in India over the whole period, from about one-in-eight of the poor living in urban areas in the early 1950s to one-in-three today.

Source: Datt, Ravallion, and Murgai 2016.

#### Making a living

A powerful obstacle to urban poverty reduction and sustainable urban development is the inability to provide employment for growing urban populations. This constitutes one of the most intractable problems facing national and local governments. A comparative study of nine cities across Africa, Asia, and Latin America found ‘jobs and income earning opportunities to be the most fundamental preoccupations of the urban poor’ (Beall 2004: 54).

In the 1950s and 1960s, urban employment had been expected to grow with industrialisation. But by the 1970s it became clear that urban labour markets were failing to keep pace with urban growth and the discourse of international development shifted towards meeting basic needs such as through income generating projects and recognising and supporting the informal economy. Today most urban jobs are concentrated in the public, manufacturing, and service sectors with the latter increasing in relative importance as public sector jobs decline and manufacturing employment becomes more insecure. For the majority of people who cannot find work in the formal waged sector, their only choice is to seek livelihoods in the informal economy (also known as the informal sector, shadow economy, black economy, or parallel economy) (Fox and Goodfellow 2016; see also Chapter 8).

The conventional view of the informal economy is that it is relatively easy to enter, operates on a smaller scale than the formal economy and often with indigenous resources and adapted technology. The work done within it is said to be labour intensive, using skills acquired outside formal education and training systems and involving minimal capital investment and maximum use of family labour. Much of this is true but simple categorisations are always problematic. For example, research has shown that sometimes entry into the informal economy can be difficult as there is gate-keeping by those who already have access to customers, skills, sites, or markets. For many, their lives are characterised by insecurity, moving in and out of jobs and facing precarity (Standing 2014). Sometimes informal operations are large scale, such as the multiple sweatshops that feed the global garments industry. They feed into supply chains that use imported technology and are capital intensive. While many of the poorest urban dwellers are workers in the informal economy, many informal traders and producers themselves can make reasonable and even handsome livings. What is invariably the case is that the informal economy is unregulated and characterised by intense competition (see Figure 23.5).

p. 511

Some scholars see the relationship between the formal and informal economies as largely exploitative and likely to perpetuate poverty. Even efforts to support informal businesses through ‘frugal innovation’, as in India and interventions elsewhere, are often seen to benefit investors rather than operatives (Meagher 2017). Others, dating back to Hernando de Soto’s The Other Path (1989), stress the entrepreneurialism of those in the informal economy, seeking to make a living despite the ubiquitous constraints of state interference in private markets. This view is prevalent among many who see cities as a potent force for creating prosperity, driving innovation, consumption, and investment and offering opportunities for both formal and informal employment (UN-Habitat 2016: 29).

What is clear is that on the one hand, informality deprives governments of a strong fiscal base, necessary if they are to respond effectively to infrastructure and service deficits. Equally clear, however, is that there are vast numbers of people working under informal conditions, with no security or basic protections (Williams and Lansky 2013). Informal employment is almost all found in urban areas and comprises more than half of all non-agricultural employment in developing countries today (Vanek et al. 2014).

A high proportion of workers in the informal economy also tend to be women (see Figure 23.6). They often combine paid activities with reproductive responsibilities such as making cooked food for sale while feeding their families (see Figure 8.2(b)), or looking after the children of others along with their own. The global research and policy-action network, Women in Informal Employment Globalising and Organising (WIEGO), has provided a nuanced definition of informal employment by identifying six categories of informal employment: informal employers, informal employees, own account operators, casual wage workers, industrial outworkers/subcontracted workers, and unpaid but contributing family workers (Chen 2012: 9). These descriptors are drawn from WIEGO’s fine-grained analysis of engagement with the gendered nature of the informal economy. It is also global in nature, whereby informality is part of globally connected production processes in which private sector profits are made, often with the tacit support of developing state and emerging economy p. 512governments keen to be competitive in international markets (Meagher, Manna, and Bolt 2016).

Mobile broadband subscriptions reached 5.2 billion globally in 2019 (GSMA 2020) and around half the world’s population now use the Internet. For people between the ages of 14 and 24, the proportion was already 71 per cent by 2016 (UN 2017b). This has brought enormous benefits, connecting developing countries into global value chains through their competitive advantage in routine, repetitive, and back-office jobs such as call centres and data management. However, the rise of Artificial Intelligence presents new challenges as well as opportunities (see Section 22.4).

The pessimistic view is that over the next 15 years or so automation could affect two-thirds of all jobs, with machines and robots displacing workers doing routine and repetitive jobs. The impact for developing countries could be dire in contexts where low labour costs offer comparative advantage and millions of young people enter the labour market each year. Dani Rodrik (2016) has referred to this march of the robots as ‘premature deindustrialisation’. Others express more optimism, however, believing the boost to the world economy will bring benefits and provide instances of innovation, employment creation, and entrepreneurship (Dobbs, Manyika, and Woetzel 2015).

Many positive examples come from the city of Nairobi in Kenya. Most well known is the mobile phone-based money transfer system, M-Pesa, now not only well established in Kenya but with uptake in other countries in Africa, Afghanistan, and Eastern Europe (Monks 2017; see also Chapter 22). Founded initially by Vodafone and now owned by Safaricom, M-Pesa has been developed and added to by Kenyans. One such example is M-TIBA, a mobile phone service that allows anyone to send, save, and spend funds specifically for medical treatment. Not only does this benefit ordinary citizens, who can be financially flattened by health shocks, but also M-TIBA collects data and the data analytics provided can improve health decision-making and health policy and services. In a radio programme for the BBC and available on podcast, Goldin (2019) discusses these examples as well as the work of Summer Source, a not-for-profit organisation that provides training for data entry and processing providing the raw material for Artificial Intelligence. Eighteen hundred workers in Nairobi are involved in creating some of the world’s most sophisticated technology, such as driverless vehicles. They do this by tagging thousands and thousands of images from the United States, Europe, China, and elsewhere, such as road markings, traffic signs, and people, and sending the results back to scientists in Silicon Valley. And three-quarters of Summer Source workers live in Kabira, Nairobi’s largest slum. Goldin argues that this ‘give work’ movement is real development, progress p. 513that impacts the ‘bottom of the pyramid’ and allows countries such as Kenya to participate in global value chains. What is clear is that the growth in big data and the use of new communications and database technologies in low- and middle-income countries—such as those highlighted and others like Airbnb and Uber—have given rise to both opportunities and challenges for ordinary people and have created shifting power structures and new actors as the field of international development encounters informational capitalism (Taylor and Broeders 2015).

#### Creating homes and neighbourhoods

In the brave new world envisaged by those focused on the transformational potential of urbanisation and its association with economic growth (Dobbs, Manyika, and Woetzel 2015; UN-Habitat 2016), there remains the challenge of housing growing urban populations. The last section looked at the informal economy as the main source of urban livelihoods, focusing on productive and indeed reproductive activities of men and women at an individual or household level. This section looks at what many years ago Castells (1983) called ‘collective consumption’, being the goods and services needed for the reproduction of the urban workforce on a day-to-day and generational basis, such as land, housing, and urban basic services, notably water supply and sanitation.

In the early 1950s and 1960s there was a general belief that the state could and should be responsible for the provision of housing and services, and governments attempted to deliver low-cost conventional housing to growing urban populations. However, by the 1970s it became increasingly clear that this strategy was failing to provide anything like a sufficient number of units to meet housing needs; nor were these units affordable to the majority of the urban poor, particularly when land values rose. What they tended to do instead, was to build their own homes in informal settlements or resort to multiple occupancy in ever more crowded slums. This led to parallel informal land and housing markets, unregulated by the formal system (Wakely 2018).

Efforts to reduce costs of shelter were made during the 1960s and 1970s through the promotion of self-help housing. However, there were a number of cost and construction problems with self-help housing, and local politicians did not like such schemes, as they could not offer housing as an incentive or reward for political support. Reducing standards was another method used during the 1970s, for example by providing people with starter or core houses, perhaps a single room that they could later add on to when they could afford it. In practice this rarely happened because even the core housing was more than many people could afford (ibid).

The next phase of housing policy might be characterised as one of ‘enabling shelter strategies’. At first this involved the promotion of ‘sites and services’ schemes by governments and international donors such as the World Bank. Here serviced plots were provided on which people could build or have their own homes built when time and resources allowed. A major problem was land, which often turned out to be marginal or on the periphery of cities, far from jobs, amenities, and all but the most basic services. Not surprisingly there was little take-up from poor people although larger plots were often bought up (although not necessarily occupied) by middle- and upper-income people for investment purposes.

The promotion of sites and services schemes gave way either to slum clearances or to the ‘upgrading’ of informal settlements, based on the premise that it was cheaper and easier to provide people with basic services where they were, than to move them against their will. This so-called ‘enabling approach’ to shelter provision has not fundamentally changed since the mid-1980s, although there are differences in operational emphasis, such as a focus on upgrading of services, the provision of accessible housing finance, and the involvement of builders from the informal economy in housing schemes promoting skills or small enterprise development, as well as providing options for the growth of rental markets (Gilbert 2008).

Nevertheless, successive approaches have failed to keep pace with demand in many low- and middle-income cities and this has resulted in inflated land and housing costs, making shelter a very costly item for the urban poor. Investment in land and housing by global capital can also determine local prices and housing outcomes, invariably to the detriment of low-income city dwellers. Even slums and informal settlements can be inordinately expensive, with fear of eviction being a constant feature, often at the hands of urban political and economic mafia or elites who undermine efforts to improve conditions, whether by government or the private sector. The scale of the slum phenomenon, therefore, is as great as ever and represents the permanent dwellings and neighbourhoods of millions p. 514of people. It is only in part the result of rapid demographic change and is also a consequence of weak policy and urban governments (Fox 2014). As noted, almost 900 million people lived in slum conditions in 2015. This represented 28 per cent of the urban population in developing countries (UN-Habitat 2016) (see Figure 23.7). Actual numbers have increased gradually, except in sub-Saharan Africa, which has seen a steep rise, with 72 million new slum dwellers since 2000. This has occurred in tandem with the growth of the region’s urban population overall. As such, sub-Saharan Africa alone accounted for 56 per cent of the total increase in the number of slum dwellers in developing countries between 1990 and 2014.

The known health impact of poor urban environmental conditions, and the recognition by urban élites that ‘germs do not carry passports’, means there is something of a consensus over the need to provide urban services such as water, sanitation, and drainage to poor households and settlements. The environmental health risks of the urban poor are commonly addressed through the provision of urban basic services by way of a community-based approach, which includes basic infrastructure alongside health, education, and enterprise development components. There are two main problems with area-based approaches. First, they fail to deal adequately with the practical difficulties of linking area-based services to city level services, for example pit latrines and citywide sewerage systems.

A second problem is that area-based approaches fail to deal with the more fundamental issue of inequalities at a citywide level. In many instances, a piped water supply and sewerage connections only reach a minority of urban dwellers, invariably those concentrated in better off and high-income areas, and further investment is often channelled at existing services, for example through maintenance or extension costs.

The imperative for improving urban services is clear. Urban health risks reduce the productivity of urban dwellers and the loss of adult breadwinners through ill health constitutes one of the main factors plunging families into poverty. They also constitute a social and environmental time bomb for many urban areas, particularly densely populated cities where ignoring the environmental negatives that emanate from poor urban service delivery can lead to poor outcomes for both citizens and cities themselves, as illustrated by the COVID-19 outbreak (see Box 23.3).

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#### Box 23.3 Cities and infectious diseases

Plague, cholera, and tuberculosis have all left their imprint on the urban fabric of cities over time. The coronavirus pandemic in 2020 has highlighted the role of cities in the spread and transmission of disease. Cities can certainly amplify contagion and risk but the reasons given differ. Explanations focus on three broad areas: places, people, and policymaking (Nathan 2020).

Places. First, cities are sites of public health vulnerability. Urban agglomeration and interaction may be good for social and economic life, but density can accelerate the spread of disease. When cities are hubs for transnational commerce and mobility, risk can be amplified. This does not apply only to ‘global cities’. In low- and middle-income countries, those cities, towns, and peri-urban communities located on transportation corridors often see clusters of disease outbreaks, as occurred with the spread of HIV-AIDS in sub-Saharan Africa.

A second line of argument relates to public transport networks and the nature of commuting. In cities such as London and New York, some have associated the underground and the subway respectively with the spread of the coronavirus.

People. That said, much depends on how people live in cities. Mitlin (2020) considers the particular challenges the COVID-19 outbreak poses to the one billion people living in informal settlements in the Global South, where it is common for large multi-generational families to live in a single room or shack, with dwellings close to each other and five to ten households sharing a single water tap and pit latrine. Where water supplies are limited, intermittent or unaffordable to the poorest, the situation is exacerbated, and the ill health of a breadwinner can send people who are just managing plummeting rapidly into poverty.

Urban labour markets are often polarised into knowledge-intensive work that can be conducted remotely and informal low-wage face-to-face services. The informal economy can be as global as it is local. Guayaquil in Ecuador became a COVID-19 hotspot with over 13 000 deaths registered in March and April 2020. Early cases were associated with the city’s extensive transnational migration network, hurriedly travelling back from Spain, Italy, and the United States before lockdowns were enforced in those countries. Many returned to the suburbios, ‘the sprawling, closely packed low-income settlements’, which are home to 70 per cent of the city’s population, and had to fall upon the support of their ever-shrinking families (Moser and Peek 2020).

Policy. Some cities are not only better resourced, less crowded, and with better health infrastructure than others, but also have more effective institutions of metropolitan governance. Here, cities can be part of the solution and, indeed, many of the norms and rules for cities to manage infectious disease were first discussed at a global sanitary conference in 1851, setting out a path for disaster and emergency preparedness that has informed the governance of many cities since (Muggah and Katz 2020). However, much depends on the relative autonomy and the resource base of cities vis-à-vis national government.

### 23.5 City life and the emergence of a new global urban agenda

Up until quite recently, within the context of international development scholarship, an urban focus has been on rural urban linkages and on the nature and extent of urban poverty. This can be seen in concomitant policy responses. At a national scale, developing countries have made efforts to prevent rural to urban migration, including regional planning and industrial decentralisation strategies. At an urban scale, responses to urban poverty have included community driven initiatives (for example self-help housing) or area-based planning initiatives (such as low-cost sanitation solutions). In both cases, it is now argued, the city has been ignored or eclipsed. This thinking is at the heart of the so-called ‘New Urban Agenda’, advanced ahead of the Habitat III meeting in Quito in October 2016 but considerably informed by the debates and lobbying to achieve and formulate an urban goal for the SDGs. In the previous two urban conferences, Habitat I in Vancouver in 1976 and Habitat II in Istanbul in 1996, the focus was on ‘development in cities’ or urban areas, whereas at Habitat III the emphasis shifted to ‘cities in development’ (Parnell 2016: 532).

In relation to urban poverty too, there has been a recent call for a systematic analysis of how cities themselves interface with poverty—something that is seen to have been absent until quite recently (Lemanski and Marx 2015). It is argued that the experience of poverty and its ambiguous relationship with the city has been consistently overlooked:

What happens in and is exported from ‘cities of the south’ will come to dominate our collective lives – cities will have massive impact on natural systems changes; the production, distribution and circulation of goods and services and the experiences of everyday life, health, culture and politics … For the global majority life will be p. 516shaped by urban conditions and expectations. But for all its centrality, we do not really understand what constitutes ‘the city’ or how urban form, urban management, urban life and identity interface with the experiences of, or responses to poverty (Parnell 2015: 16–17).

What this means, in effect, is that there is a need to go beyond earlier responses that have emphasised individual and community experience over metropolitan connections and responsibilities, and to rethink policy approaches at both the citywide and national level. The focus on people-centred or bottom-up views over the last two decades are by no means wrong, but they need to be accompanied by a recognition of the physical, structural, and institutional role of ‘the city’ in shaping the experiences of and the responses to poverty (Pieterse 2008). This means engaging with the materiality of cities, their planning regimes, indeed the local state. To cite Parnell once more:

Regardless of whether one is born rich or poor, ‘the city’ is the material, operational and ideological scale that mediates contemporary humans’ identity, economy and investment. The territory, scale and governmentality we are speaking of here are not the plot or the street or even the neighbourhood, but that of ‘the city’ (2015: 22).

The policy solution, in other words, is to focus on the material investments necessary for effective and inclusive urban management and service delivery that embraces the needs of the poor alongside those other urban citizens. In other words, rather than focusing on ‘life in the city’, it may be more beneficial to ask what is necessary to ensure ‘a city for life’?

Does the ‘New Urban Agenda’ address these challenges and is anything lost in the process? The SDGs opened up a dialogue on the need for a global policy focus on the urban context—from small towns to mega-cities. It was a dialogue that involved a wide range of actors at the local, national, and global scale. The preparatory process leading up to Habitat III built on this scene setting through a broad consultation undertaken by UN-Habitat as the host agency. Ultimately, however, the only bodies able to vote on the UN-endorsed global urban policy were states. What emerged articulated a city-centric perspective under the rubric of the ‘New Urban Agenda’.

The SDGs and specifically Goal 11 put forward a single global urban policy position on inclusive and sustainable cities. As with any UN initiative, the SDGs assume national responsibility bolstered by international commitment. As such the targets are owned by national governments, albeit that they have been informed by consultation with market actors, especially corporations, as well as civil society organisations and NGOs. Habitat III is also a UN process, conducted every 20 years under the auspices of UN-Habitat. A focus on the city and sub-national scale government has been fought for over the years but rose up the agenda significantly in the debates leading up to Habitat III, despite divergent views in the lead up and at the conference itself. What has emerged as the ‘New Urban Agenda’ represents a much more ambitious approach that sees cities at the heart of development, going beyond narrow sector-based interventions and area-based targeting of the urban poor towards systemic, spatially based urban planning that intersects seamlessly with national urban policies.

Some commentators (e.g. Glaeser 2011) see this as a return to a modernisation era that sees cities simply as ‘engines of economic growth’ or, one might argue, an approach that recognises David Harvey’s reading of Polanyi. Others such as Mike Davis (2006) see it as a long overdue response to recognising the importance of the spatiality, governmentality, liveability, and identity of urban centres and ‘the city’. The proof of the pudding will be in the eating and this will depend in part on whether national governments accord cities and urban areas sufficient authority, investment, and financial autonomy to succeed. First, cities require sufficient political autonomy to respond to the needs and demands of their citizens without financial responsibility devolving exclusively to the local level (Barber 2014). The latter would lead to unfunded mandates and would increase local level responsibilities, not matched by adequate resources or fund-raising capacity. The second challenge is to ensure that urban governance allows citizens to organize and contribute to inclusive urban politics and responsive urban planning. More broadly, urban centres need to demonstrably contribute to national economic development within an enabling national policy framework.

### 23.6 Conclusion

Against a background of some of the critical debates on urbanisation, urban growth and the character and role of cities and other urban centres, this chapter has examined what life is like, particularly for low-income urban dwellers in cities of Africa, Asia, and Latin America. The conclusion drawn is that urban centres are p. 517places of possibility for millions of resourceful people but they also have their dark side—informal settlements far from places of work, the sweatshops and waste dumps alongside the skyscrapers and heaving markets. While the benefits of the world of Artificial Intelligence and driverless cars, the leitmotif of smart global cities, seem light years away from the experience of many poor urban dwellers in the peri-urban areas and informal settlements of cities of the Global South, they are nevertheless digitally connected and being drawn into the global technology revolution.

The association of cities with economic growth and worlds of opportunity often obscures the persistence of urban poverty and growing inequality in many large cities across the world. This is a phenomenon often referred to as the ‘urban paradox’ (UN-Habitat 2016: 33) and one that highlights some of the anomalies of twentieth and early twenty-first-century development policy. It is now incumbent on the architects and implementers of the SDGs and the New Urban Agenda to address this paradox, heralding the renewed recognition of the contribution of cities to development, without losing focus on the targeted and often individual or area-based interventions that ameliorate the conditions of urbanisation and ‘life in the cities’ for their less fortunate inhabitants.

### Summary

The ‘urban paradox’ highlights the contrast between the association of cities with economic growth and opportunity and the persistence of urban poverty and growing inequality in many large cities.

The exact relationship between experiences of poverty and city life remains unclear, and it may be important to redirect the questions being asked in relation to the city. Rather than focusing on ‘life in the city’, it might be more beneficial to ask what is necessary to ensure ‘a city for life’.

A key priority will be addressing the capacity of urban institutions and systems to meet the challenges of city management and urban governance in the context of social, economic, and demographic change.

There is a need to recognise the physical, structural, and institutional role of ‘the city’ in shaping the experiences of and the responses to poverty.

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• Take your learning and understanding further by visiting the online resources that accompany this book: www.oup.com/he/allen-thomas3e.