The Journal of Economic Perspectives· 2013Q1
The Economics of Slums in the Developing World
- 422citations
- Q1SCImago
- 2013year
Short summary
Slums in developing countries exhibit poverty trap characteristics, with human capital thresholds, investment inertia, and policy failures preventing residents from accessing urban economic opportunities.
AI-generated from the title and abstract; the full text is not read.
Key points
- Slum poverty in developing nations resembles poverty traps described in economic literature.
- Human capital thresholds, investment inertia, and policy failures impede slum dwellers' economic advancement.
- The study questions the assumption that slums are solely temporary features of rapidly growing economies.
- Standard policy interventions have frequently failed to curb slum expansion.
AI-generated from the title and abstract; the full text is not read.
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.
The authors' abstract, as published at the source. The Journal of Economic Perspectives, 2013 · DOI ↗
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Field: Urban Studies
Urban StudiesSocial Sciences