IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v27y2013i4p187-210.html
   My bibliography  Save this article

The Economics of Slums in the Developing World

Author

Listed:
  • Benjamin Marx
  • Thomas Stoker
  • Tavneet Suri

Abstract

The global expansion of urban slums poses questions for economic research as well as problems for policymakers. We provide evidence that the type of poverty observed in contemporary slums of the developing world is characteristic of that described in the literature on poverty traps. We document how human capital threshold effects, investment inertia, and a "policy trap" may prevent slum dwellers from seizing economic opportunities offered by geographic proximity to the city. We test the assumptions of another theory -- that slums are a just transitory phenomenon characteristic of fastgrowing economies -- by examining the relationship between economic growth, urban growth, and slum growth in the developing world, and whether standards of living of slum dwellers are improving over time, both within slums and across generations. Finally, we discuss why standard policy approaches have often failed to mitigate the expansion of slums in the developing world. Our aim is to inform public debate on the essential issues posed by slums in the developing world.

Suggested Citation

  • Benjamin Marx & Thomas Stoker & Tavneet Suri, 2013. "The Economics of Slums in the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 187-210, Fall.
  • Handle: RePEc:aea:jecper:v:27:y:2013:i:4:p:187-210 Note: DOI: 10.1257/jep.27.4.187
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.27.4.187
    Download Restriction: no

    References listed on IDEAS

    as
    1. Galiani, Sebastián & Gertler, Paul J. & Undurraga, Raimundo & Cooper, Ryan & Martínez, Sebastián & Ross, Adam, 2017. "Shelter from the storm: Upgrading housing infrastructure in Latin American slums," Journal of Urban Economics, Elsevier, pages 187-213.
    2. Kaushik Basu, 2003. "Analytical Development Economics: The Less Developed Economy Revisited," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262523442, January.
    3. Shyamal Chowdhury & Ahmed Mushfiq Mobarak & Gharad Bryan, 2009. "Migrating Away from a Seasonal Famine: A Randomized Intervention in Bangladesh," Human Development Research Papers (2009 to present) HDRP-2009-41, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Sep 2009.
    4. Richard Hornbeck, 2010. "Barbed Wire: Property Rights and Agricultural Development," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 767-810.
    5. Antonio E. Bernardo & Ivo Welch, 2001. "On the Evolution of Overconfidence and Entrepreneurs," Journal of Economics & Management Strategy, Wiley Blackwell, pages 301-330.
    6. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, pages 700-729.
    7. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
    8. Christopher Woodruff, 2001. "Review of de Soto's The Mystery of Capital," Journal of Economic Literature, American Economic Association, pages 1215-1223.
    9. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
    10. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, January.
    11. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    12. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 515-548.
    13. Abhijit V. Banerjee & Paul J. Gertler & Maitreesh Ghatak, 2002. "Empowerment and Efficiency: Tenancy Reform in West Bengal," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 239-280, April.
    14. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.
    15. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
    16. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sandrine Mesplé-Somps & Laure Pasquier-Doumer & Charlotte Guénard, 2016. "Quel impact des projets de réhabilitation urbaine sur les conditions de vie ? Le cas d’un bidonville à Djibouti," Working Papers 20160002, Université Paris 1 Panthéon Sorbonne, UMR Développement et Sociétés.
    2. Aghajanian, Alia Jane, 2016. "Social capital and conflict: impact and implications," Economics PhD Theses 0116, Department of Economics, University of Sussex.
    3. Cavalcanti Ferreira, Pedro & Monge-Naranjo, Alexander & Torres de Mello Pereira, Luciene, 2016. "Of Cities and Slums," Working Papers 2016-22, Federal Reserve Bank of St. Louis.
    4. Galiani, Sebastián & Gertler, Paul J. & Undurraga, Raimundo & Cooper, Ryan & Martínez, Sebastián & Ross, Adam, 2017. "Shelter from the storm: Upgrading housing infrastructure in Latin American slums," Journal of Urban Economics, Elsevier, vol. 98(C), pages 187-213.
    5. Barnhardt, Sharon & Field, Erica & Pande, Rohini, 2014. "Moving to Opportunity or Isolation? Network Effects of a Slum Relocation Program in India," IIMA Working Papers WP2014-11-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    6. Neeraj Baruah & Amanda Dahlstrand-Rudin & Guy Michaels & Dzhamilya Nigmatulina & Ferdinand Rauch & Tanner Regan, 2017. "Planning Ahead for Better Neighborhoods: Long Run Evidence from Tanzania," SERC Discussion Papers 0222, Spatial Economics Research Centre, LSE.
    7. Ahmed, S. Amer & Vargas Da Cruz,Marcio Jose & Quillin,Bryce Ramsey & Schellekens,Philip, 2016. "Demographic change and development : a global typology," Policy Research Working Paper Series 7893, The World Bank.
    8. Daniel S. Grossman & Brad R. Humphreys & Jane E. Ruseski, 2017. "Out of the Outhouse: The Impact of Place-Based Policies on Dwelling Characteristics in Appalachia," Working Papers 17-10, Department of Economics, West Virginia University.
    9. Castells-Quintana, David, 2017. "Malthus living in a slum: Urban concentration, infrastructure and economic growth," Journal of Urban Economics, Elsevier, vol. 98(C), pages 158-173.
    10. Sharon Barnhardt & Erica Field & Rohini Pande, 2017. "Moving to Opportunity or Isolation? Network Effects of a Randomized Housing Lottery in Urban India," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 1-32, January.
    11. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    12. Nolan, Laura B. & Bloom, David E. & Subbaraman, Ramnath, 2017. "Legal Status and Deprivation in India's Urban Slums: An Analysis of Two Decades of National Sample Survey Data," IZA Discussion Papers 10639, Institute for the Study of Labor (IZA).
    13. Tripathi, Sabyasachi, 2014. "Determinants of large city slum incidence in India: A cross-sectional study," MPRA Paper 57239, University Library of Munich, Germany.
    14. Sugata Bag & Suman Seth, 2016. "Understanding Standard of Living and Correlates in Slums - An Analysis Using Monetary Versus Multidimensional Approaches in Three Indian Cities," Working papers 263, Centre for Development Economics, Delhi School of Economics.
    15. Sugata Bag & Suman Seth & Anish Gupta, 2016. "A Comparative Study of Living Conditions in Slums of Three Metro Cities in India," Working Papers id:10634, eSocialSciences.
    16. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, Elsevier.
    17. Laura Jaitman, 2015. "Urban infrastructure in Latin America and the Caribbean: public policy priorities," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), pages 1-57.
    18. Galiani, Sebastián & Gertler, Paul J. & Undurraga, Raimundo & Cooper, Ryan & Martínez, Sebastián & Ross, Adam, 2017. "Shelter from the storm: Upgrading housing infrastructure in Latin American slums," Journal of Urban Economics, Elsevier, vol. 98(C), pages 187-213.
    19. Nakamura, Shohei, 2017. "Tenure Security Premium in Informal Housing Markets: A Spatial Hedonic Analysis," World Development, Elsevier, pages 184-198.
    20. repec:oup:oxford:v:33:y:2017:i:3:p:355-372. is not listed on IDEAS
    21. Louise Fox, 2016. "Africa’s inclusive growth challenge: Reducing deprivation and creating jobs," Papers Presented at Global Meetings of the Emerging Markets Forum 2016incgrow, Emerging Markets Forum.
    22. Henderson, Vernon & Venables, Anthony J. & Regan, Tanner & Samsonov, Ilia, 2016. "Building functional cities," LSE Research Online Documents on Economics 66832, London School of Economics and Political Science, LSE Library.
    23. Sugata Bag & Suman Seth & Anish Gupta, 2016. "A Comparative Study of Living Conditions in Slums of Three Metro Cities in India," Working Papers id:10634, eSocialSciences.
    24. Franklin, Simon, 2016. "Enabled to work: the impact of government housing on slum dwellers in South Africa," LSE Research Online Documents on Economics 66537, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:27:y:2013:i:4:p:187-210. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.