Ending Poverty? Modern Slums and Stagnation in Government Action

If so inclined and wealthy enough, a person living in the Hell’s Kitchen neighborhood of Manhattan today can walk out of their $85 million combined condo to dine on “Oysters and Pearls” as well as lobster at Per Se, spend $310, and then check in on her champion breed dog at the local dog spa. Needless to say, Hell’s Kitchen at present, following years of gentrification, has become a desirable neighborhood for some of New York City’s working artists and Broadway actors. This, however, was not always the case.

For about 130 years, from the mid-1800s to the 1980s, Hell’s Kitchen constituted one of the worst neighborhoods in not only New York City but in the United States. For much of its existence, the area from 34^th Street to 59^th Street and between Eighth Avenue and the Hudson River held some of the worst slums in the Industrial Age, creating an unsanitary hotbed for gang violence and crippling poverty.

Benjamin Marx, Thomas Stoker, and Tavneet Suri, in their article “The Economics of Slums in the Developing World” in the Journal of Economic Perspectives, however, suggest that earlier success stories in places like Hell’s Kitchen might not translate to slums in the modern developing world. Instead, places like Kibera in Nairobi, Kenya and the Cidade de Deus favela in Rio de Janeiro may be caught in a poverty trap that would require substantial systematic reforms to alleviate entrenched poverty.

In order to determine if modern slums are in fact stagnant or even in decline, Marx, Stroker, and Suri use existing databases that measure a number of poverty indicators such as sanitation, government expenditures, and housing to find any patterns of progression. The researchers find that, as they theorized, many of the slums in the developing world are not seeing any sort of progression out of poverty. From 1999 to 2009, the authors find that heads of households with at least a primary education in Kibera fell from 47 to 40 percent, while Kenya’s economy, as a whole, grew 3.5 percent. Similarly, the researchers find that 70 percent of slum residents in Kolkata (also known as Calcutta, India) have lived there for over 15 years, rather than having progressed to a wealthier neighborhood.

Marx, Stroker, and Suri also note that governments historically have combated these slums through mass evictions. For example, in 2005 the Zimbabwean government enacted “Operation Clean Up” in the slums of Harare, displacing 700,000 people. The researchers find, however, that dismantling slums may not halt slum growth. Instead new slums are created, and the problem of severe poverty continues.

Marx, Stroker, and Suri conclude that instead of clearing slums or even neglecting them entirely, a “big push” method of infrastructure development—large scale changes to housing, sewage, etc.—can help neighborhoods escape poverty traps. However, the researchers acknowledge that governments in the developing world are typically unwilling to invest in slums, which therefore expand when there is no development. Marx, Stroker and Suri theorize that this lack of slum development is connected to both the lack of reporting of slum-related issues and the fact that many governments benefit from the status quo of slums remaining undeveloped through corruptive relationships with criminal organizations and landlords.

In terms of places like Kibera or Cidade de Deus, the premise of slow development within slums using government assistance may be antiquated. Marx, Stroker, and Suri surmise that the development of modern slums may not actually be inevitable, but stagnate growth is more likely to occur without a better understanding of a government’s role in fixing the problems of large-scale urban poverty.

Further, the literature on slum development, according to Marx, Stroker, and Suri­, is severely lacking in its ability to draw helpful conclusions on modern slums that may be used in areas of status quo stagnant growth. The authors ultimately urge that the study of slums in the developing world be shifted to more practical studies of government reform, where applicable solutions may be found to combat this modern form of underdevelopment and urban poverty.

Article Source: Benjamin Marx, Thomas Stoker, and Tavneet Suri, “The Economics of Slums in the Developing World,” Journal of Economic Perspectives 27, No. 4 (Fall 2013): 187-210.

Feature Photo: cc/(lecercle)