Publication: Working with the Market : Approach to Reducing Urban Slums in India
Loading...
Published
2010-11-01
ISSN
Date
2012-03-19
Editor(s)
Abstract
This paper examines the policy options for India as it seeks to improve living conditions of the poor on a large scale and reduce the population in slums. Addressing the problem requires first a diagnosis of the market at the city level and a recognition that government interventions, rather than thwarting the operations of the market, should seek to make it operate better. This can substantially reduce the subsidies required to assist low income households to attain decent living standards. The authors show that government programs that directly provide housing would cost, in conservative estimates, about of 20 to 30 percent of GDP, and cannot solve a problem on the scale of India's. Using two case studies, for Mumbai and Ahmedabad, the paper offers a critical examination of government policies that shape the real estate market and make formal housing unaffordable for a large part of the population. It illustrates how simple city level market diagnostics can be used to identify policy changes and design smaller assistance programs that can reach the poor. The linkage between chronic infrastructure backlogs and policies makes housing unnecessarily expensive. Increasing the carrying capacity of cities is essential for gaining acceptance of real estate policies suited to Indian cities. The authors propose approaches for funding major investments to achieve this.
Link to Data Set
Citation
“Annez, Patricia Clarke; Bertaud, Alain; Patel, Bimal; Phatak, V. K.. 2010. Working with the Market : Approach to Reducing Urban Slums in India. Policy Research working paper ; no. WPS 5475. © World Bank. http://hdl.handle.net/10986/3957 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication Climate and Social Sustainability in Fragility, Conflict, and Violence Contexts(Washington, DC: World Bank, 2026-01-07)Climate change is widely recognized as a driver of violent conflict, but its broader social effects remain less understood. Ignoring these dimensions risks a vicious cycle where climate policies might undermine socially just adaptation. Evidence is still limited on how climate shocks influence political participation, trust, or migration. This paper helps fill that gap by examining links between climate change, conflict, and social sustainability, with a focus on inclusion, resilience, cohesion, and legitimacy. Using secondary data from 2019–24, the study applies simple correlation-based methods to test three hypotheses on the nature, severity, and composition of these associations. The analysis combines multiple climate impact measures, new conflict classifications, recent social sustainability frameworks, and controls for population and geography. The results reveal strong correlations—not causation—between climate events and contexts of fragility, conflict, and violence. Climate impacts are most pronounced in both national and subnational conflict settings. The study also finds robust links between fragility, conflict, and violence and low levels of social sustainability, reflecting its role as both a driver and consequence of conflict. Some dimensions—such as violent events and insecurity—appear weaker in areas most affected by climate shocks. Two of the hypotheses are supported, and one remains inconclusive.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Institutional Capacity for Policy Implementation: An Analytical Framework(Washington, DC: World Bank, 2026-01-07)State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.Publication South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions(Washington, DC: World Bank, 2026-01-08)Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.Publication Investment in Emerging and Developing Economies(Washington, DC: World Bank, 2026-01-07)The world faces a pressing challenge to meet key development objectives amid slowing growth and rising macroeconomic and geopolitical risks. With the number of job seekers rising rapidly, infrastructure shortfalls continuing to be large, and climate costs mounting, the case for a significant investment push has never been stronger. Yet the capacity to respond in many emerging markets and developing economies has eroded. Since the global financial crisis, investment growth has slowed to about half its pace in the 2000s, with both public and private investment weakening. Foreign direct investment inflows—a critical source of capital, technology, and managerial know-how—have also fallen sharply and become increasingly concentrated, leaving low-income countries with only a marginal share. The risks of further retrenchment are significant, as trade tensions, policy uncertainty, and elevated debt levels continue to weigh on investment. Reigniting momentum will require ambitious domestic reforms to strengthen institutions, rebuild macro-fiscal stability, and deepen trade and investment integration—the foundations of a supportive business climate. At the same time, international cooperation is indispensable. A renewed commitment to a predictable system of cross-border trade and investment flows, combined with scaled-up financial support and sustained technical assistance, is essential to help emerging markets and developing economies—especially low-income countries and economies in fragile and conflict situations—bridge financing gaps and implement the domestic reforms needed to restore investment as an engine of growth, jobs, and development.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Ahmedabad : More but Different Government for “Slum Free” and Livable Cities(World Bank, Washington, DC, 2012-11)This paper analyzes real estate market dynamics over the past decade in the city of Ahmedabad, India, with a view to improving the living conditions of the large population living in slums. The paper combines census data, the National Sample Survey, and slum household surveys to review the demand side of the market. Satellite photography was used to estimate the production of both formal and informal housing over the past ten years. Analysis of the execution of the development plan for the Ahmedabad region and town planning schemes shows how the system of housing supply has evolved. These analyses are used to assess the feasibility of various approaches to achieving "slum free" cities, the goal of the Government of India's planned assistance program Rajiv Awas Yojana. The paper concludes that notwithstanding a substantial increase in public housing production in recent years, providing subsidized formal homes from government or through reservations for lower income groups in private developments would take more than a generation just to handle the current slum population -- representing one-third of households. Providing basic environmental infrastructure services in existing underserved neighborhoods -- a proven approach under the Slum Networking Program -- and bolstering infrastructure networks for the city to accommodate increased demand are affordable and feasible. Addressing issues such as rural-urban land conversion and ambiguous land tenure, and allowing flexibility for realistic building standards and increasing maximum floor space standards in certain neighborhoods can help to ensure a growing supply of housing that is affordable for moderate and low-income households.Publication Rental Housing : Lessons from International Experience and Policies for Emerging Markets(Washington, DC: World Bank, 2013-03-22)This book rental housing lessons from international experience and policies for emerging market is an effort to bring rental housing to the forefront of the housing agenda of countries around the world and to provide general guidance for policy makers whose actions can have an effect on where and how people live. It warns of the challenges they face and provides guidelines on how to develop or redevelop a sound rental sector. it can enable key players in housing markets be they government officials, private rental property owners, financiers, or nongovernmental organizations to add rental housing as a critical housing option and to have an informed discussion on how best to stimulate this sector. The housing policy of most nations focused on increasing home ownership. There had been very little discussion about rental housing, less about social housing, and virtually none about public housing. This book includes totally five chapters: chapter one is introduction; chapter two is the rental market and its players; chapter three is legal, tax, and financial issues; chapter four is recommendations and conclusion; chapter five is country experiences.Publication Federal Republic of Nigeria Slum Upgrading, Involuntary Resettlement, Land and Housing(Washington, DC, 2015-06-23)This report aims to extract lessons on slum upgrading and involuntary resettlement policies and practices learned from the process of addressing the Badia East case, which involved complex interactions between affected people, NGOs, the Bank and Lagos State Government. In doing so, this report will discuss the Local Government Support Programme (LMDGP) as a complex and rich case study from which to extract lessons on involuntary resettlement, land, housing and slum upgrading, as well as overall urban development issues, although it is by no means meant to be an evaluation of the LMDGP project itself nor of process that followed the submission of a request for inspection to the Inspection Panel. Rather, it intends to provide an in-depth analysis of, and make recommendations on urban land and housing issues and the modalities of urban sector engagement in mega-cities like Lagos with inefficient land markets. The report was based on an extensive desk-review of relevant documents on urban issues in Nigeria and Lagos and on the LMDGP; interviews conducted in Lagos and Abuja during the period of January 18-31, 2015 with a range of stakeholders; and a series of case-studies on relevant international experiences in the areas of slum upgrading, involuntary resettlement, land and housing.Publication Land and Urban Policies for Poverty Reduction : Proceedings of the Third International Urban Research Symposium Held in Brasilia, April 2005, Volume 2(World Bank, Brasilia, 2007)The first paper of this section (Durand-Laserve) documents how increasing pressures on urban land and the 'commodification' of shelter and settlement has increased 'market evictions' of families holding intermediate tide to property, although international declarations and pressures have contributed to reducing 'forced evictions.' The second paper (Mooya and Cloete) uses the tools of the New Institutional Economics to analyze the argument in Hernando DeSoto's path-breaking book, The Mystery of Capital, that full legal tide is the key to turning 'dead capital' in the form of informal property held by many low-income families into an economic asset and to detonating broad-based economic growth. The paper concludes that intermediate forms of tenure can have the virtues of full legal tide if properly constructed, and then examines the case of Namibia in this context. The third paper (Fernandes) documents and assesses the recent efforts of the Brazilian federal Ministry of Cities to develop a comprehensive approach for regularizing title throughout that country. In the fourth paper, Abramo gives a structural and theoretical over-view of informal settlement in Brazil. The fifth paper (Rakodi) looks at traditional land delivery systems in five medium-sized Sub-Saharan African cities, and concludes that policies and programs can build on their strengths.Publication Land and Urban Policies for Poverty Reduction : Proceedings of the Third International Urban Research Symposium Held in Brasilia, April 2005, Volume 1(World Bank, Washington, DC and Institute for Applied Economic Research, Brasilia, 2007)The first paper of this section (Durand-Laserve) documents how increasing pressures on urban land and the 'commodification' of shelter and settlement has increased 'market evictions' of families holding intermediate tide to property, although international declarations and pressures have contributed to reducing 'forced evictions.' The second paper (Mooya and Cloete) uses the tools of the New Institutional Economics to analyze the argument in Hernando DeSoto's path-breaking book, The Mystery of Capital, that full legal tide is the key to turning 'dead capital' in the form of informal property held by many low-income families into an economic asset and to detonating broad-based economic growth. The paper concludes that intermediate forms of tenure can have the virtues of full legal tide if properly constructed, and then examines the case of Namibia in this context. The third paper (Fernandes) documents and assesses the recent efforts of the Brazilian federal Ministry of Cities to develop a comprehensive approach for regularizing title throughout that country. In the fourth paper, Abramo gives a structural and theoretical over-view of informal settlement in Brazil. The fifth paper (Rakodi) looks at traditional land delivery systems in five medium-sized Sub-Saharan African cities, and concludes that policies and programs can build on their strengths.
Users also downloaded
Showing related downloaded files
Publication A Detailed Anatomy of Factor Misallocation in India(World Bank, Washington, DC, 2016-01)This paper complements the results of earlier work on factor misallocation. The paper first expands the methodology and provides two important decompositions for the main indices. The main result is that factor and output misallocation across districts is at least as important as misallocation within districts. Second, the paper provides an exploration of the service sector that complements earlier work on manufacturing. The analysis shows that labor plays a fundamental role for misallocation in services, whereas land is the determining factor in manufacturing. Third, the paper expands our earlier work on the effects of policies on misallocation by looking at a much broader range of policies, and find strong evidence of their effects on misallocation. Finally, the paper take steps towards the identification of the causal effect of misallocation on output per worker by developing a novel instrumental variable approach and a simulation approach that allows for checking the consistency of the empirical results.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Informality : Exit and Exclusion(Washington, DC: World Bank, 2007)Informality: exit and exclusion analyzes informality in Latin America, exploring root causes and reasons for and implications of its growth. The authors use two distinct but complementary lenses: informality driven by exclusion from state benefits or the circuits of the modern economy, and driven by voluntary 'exit' decisions resulting from private cost-benefit calculations that lead workers and firms to opt out of formal institutions. They find both lenses have considerable explanatory power to understand the causes and consequences of informality in the region. Informality: exit and exclusion concludes that reducing informality levels and overcoming the 'culture of informality' will require actions to increase aggregate productivity in the economy, reform poorly designed regulations and social policies, and increase the legitimacy of the state by improving the quality and fairness of state institutions and policies. Although the study focuses on Latin America, its analysis, approach, and conclusions are relevant for all developing countries.Publication Healthy Cities(Washington, DC: World Bank, 2023-10-18)With most people already living in cities and the global urban population estimated to double by 2050, cities are central to human well-being and sustainable development. Whereas cities reap the economic and social benefits of agglomeration, proximity to services, and innovation, they also face significant health and environmental issues. The presence of urban poverty, complexity of urban systems, rapidity of often-unplanned urbanization, and certainty of unanticipated shocks complicate urban strategies for health and well-being. Indeed, COVID-19 revealed the significant vulnerability of global and urban systems to pandemics and the imminent climate-related impacts. Cities can confront these threats and support communities by integrating healthy city action with other urban development agendas and prioritizing human and ecosystem health in the design and management of urban environments. The Healthy Cities Report aims to provide high-level guidance to practitioners in green, inclusive, and resilient urban development while asserting the essential role of cities in improving human and ecosystem health. It introduces an action-oriented ‘TIP’ Framework for achieving healthy cities with three components: Targeted support, Integrated action, and Preparation for future challenges. It explores three pivotal modern issues—equity, climate change, and COVID-19—as they define the context for urban health policy and practice. The report suggests eight action areas for healthy cities, including adequate housing, public spaces, transportation systems, access to healthcare, water and sanitation systems, food systems, effective institutions, and sustainable funding.Publication Taxes, Spending, and Equity: International Patterns and Lessons for Developing Countries(Washington, DC: World Bank, 2025-11-17)Taxes and public spending underpin the basic administration of government and finance the human capital and infrastructure investments needed for economic growth. They can also have a significant and immediate impact on poverty and inequality. The question of how public finance can support longer-term growth objectives while promoting equity has become even more important in recent years, given the high fiscal deficits and debt levels most countries emerged with in the aftermath of the COVID-19 pandemic. These included the increasing cost of debt and the need to restart environmentally sustainable growth while helping households address the learning losses and other social scars caused by the pandemic. This paper examines the global evidence on which households pay which taxes and who benefits from what spending, and critically, the net effect on different households across the income distribution. The aim is to identify the patterns and lessons that emerge for designing progressive fiscal policies. A global dataset of 96 countries is assembled, spanning all regions of the world and all national income levels, grounded in the Commitment to Equity (CEQ) approach to fiscal incidence.