CHAPTER FOUR
Urban Poverty and public policy
Some basic concepts of urban poverty
Causes of urban poverty
Major Aspects of Poverty
Policies and strategies towards alleviating
urban poverty
4.1 Some basic concepts of urban poverty
• Poor household can be defined as one whose total income is
less than the amount required to satisfy the ‘minimum needs’
of the household. Governments estimate a minimum budget
(income) for each type of household. A household with income
less than the official poverty budget is considered poor.
There are two types of measure of poverty:
Absolute poverty and Relative poverty. .
Absolute poverty refers to a condition where household income is below a
necessary level to maintain basic living standards (food, shelter, housing). It
is a universal measure.
Relative poverty compares people’s incomes to those of others in their
society. It looks at how well off the poorest members of society are in
comparison to the rest of the population. Relative poverty
is a situation where people are poor in comparison to other peop
le living in a country. It is defined as a condition where
household income is a certain percentage below median income
Cont……
If a society gets a more equal income distribution, relative poverty will fall.
While absolute poverty can be eradicated, relative poverty can only
be alleviated, because what is minimally accepted today may vary
over time, from villages to urban areas and from country to country.
Relative poverty also varies with levels of economic development,
and the perceptions and expectations of the majority on what is
minimally acceptable.
For example, while clean piped water may be a minimum acceptable standard of
living in a city, it may not be a minimum requirement in a village.
Similarly, while possessing a telephone may be a minimum necessity in a country
like the United States, it may not be a minimum requirement in a country like
Ethiopia.
Likewise while Internet connections may not be a minimum necessity in Ethiopia
today, they may become a minimum necessity twenty-five years from now.
Absolute poverty Relative poverty
Does not concentrate on biological
Any person not in a position to needs but rather makes a comparison
obtain essential commodities like b/n two people in the environ ment
food ,cloth & shelter It is not considered when measuring
Income level is considered in AP relative poverty as a person will still be
AP however, does not include a considered poor despite meeting their
basic needs.
broader quality of life issues the
Although people living in relative
overall level of inequality in society
poverty are to an extent well off
Measured using poverty line
compared to those living in absolute
It is not possible to completely ab poverty, they still cannot afford the
Quality of life is poor same standard of life as other people in
society
Measured using in using GINI-co&
Lorenz curve
There is a small margin of success
where its eradication is concerned
Quality of life is marginally better as
those living under relative poverty
have access to healthy care services
Cont…..
For the measure to be absolute, the line must be the same in
different countries.
Also, it does not change when the income distribution changes.
Measures of relative poverty are almost the same as measuring
inequality: If a society gets a more equal income distribution,
relative poverty will fall.
While absolute poverty can be eradicated, relative poverty can only
be alleviated, because what is minimally accepted today may vary
over time, from villages to urban areas and from country to country
Cont……
Relative poverty also varies with levels of economic development,
and the perceptions and expectations of the majority on what is
minimally acceptable.
For example, while clean piped water may be a minimum acceptable
standard of living in a city, it may not be a minimum requirement in a
village. Similarly, while possessing a telephone may be a minimum
necessity in a country like the United States, it may not be a
minimum requirement in a country like Ethiopia.
Likewise while Internet connections may not be a minimum necessity
in Ethiopia today, they may become a minimum necessity twenty-five
years from now
Cont…..
• Urban poverty can result in a broader cumulative deprivation,
characterized by:
Inadequate or unstable income, which translates into
inadequate consumption;
Inadequate, unstable or risky asset based income, considering
that there are many different kinds of assets – including social,
human, financial, physical (capital goods, equipment, etc.) and
natural (for instance access to productive land);
Poor quality/insecure housing and lack of basic services, squalid
living conditions, risk to life and health, poor sanitation, air
pollution, crime and violence, natural disasters; and
Discrimination and limited access to formal labor market,
for e.g for women, the discrimination they face in labor markets
and access to credit and services; discrimination faced by certain
groups based on their ethnic origin or caste; breakdown of
traditional family and community safety needs.
Cont…..
In general urban poverty is a multidimensional
phenomenon.
The urban poor live with many deprivations.
Including, limited access to
employment opportunities and income;
inadequate and insecure housing and services;
violent and unhealthy environments;
little or no social protection mechanisms; and
limited access to adequate health and
education opportunities
Cont……
4.2 Causes of urban poverty
[Link] economic growth and stagnation
[Link] segregation
[Link] educational achievement
[Link] Market Dualism and Discrimination
employment discrimination and wage discrimination
5. Globalization
Globalization is forcing developing countries to restructure their economies to
make them more competitive in the global market by right-sizing government
role, reducing or eliminating subsidies, and by privatizing government-owned
firms and enterprises. Government budget cuts, particularly in areas such as
education and health, have reduced the level of services available to the poor
4.3 Major Aspects of Poverty
Poverty essentially has three closely interrelated aspects:
“poverty of money”,
“poverty of access” and
“poverty of power.”
These make the working, living and social environments of the poor
extremely insecure and severely limit the options available to them
to improve their lives.
Most of urban poor live in overcrowded and unsanitary slums and
squatter settlements and often do not have access to basic
infrastructure and services.
They are forced to live in illegal and informal settlements because
they cannot enter formal land and housing markets. The reasons for
the formation of slums and squatter settlements are numerous.
4.4 Policies and strategies towards alleviating urban poverty
1. Good Governance and Capacity
Building
2. Labor Markets & Employment
3. Land, Housing and Urban Services
4. Financial Markets
5. Social Protection and Social Services
6. Urban Environment
[Link] Governance and Capacity Building
Government is one of the actors in governance
• All actors other than government and the
military are grouped together as part of the
"civil society." In some countries in addition to
the civil society, organized crime syndicates also
influence decision-making, particularly in urban
areas and at the national level.
• Similarly formal government structures are one
means by which decisions are arrived at and
implemented.
Figure 4.2 Urban actors
Good governance has 8 major characteristics
Capacity-Building
• Sustainable and intensive efforts to alleviate
urban poverty require substantial capacity
building, particularly in the public or
governmental sector, among the organizations of
the poor themselves and among the civil society
organizations that work towards empowering the
poor.
Capacity-building, as defined here, has essentially
two aspects:
• institutional change and
• human resources development
Cont…..
Institutional Change: Institutional change, encompassing regulatory,
fiscal and organizational frameworks, needs to focus on creating an
environment that empowers the poor to address their problems
and become an integral rather than a marginal part of the city.
This includes removing barriers that restrict their access to finance,
housing, infrastructure, education and other urban services.
It also includes encouraging them to organize themselves and to
acquire skills and information to enable them to enter into equitable
partnerships with other actors in society.
The role of the government should be to ensure a more
equal playing field for the urban poor
• One of the key requisites for sustained poverty alleviation
is decentralization and devolution of fiscal, regulatory and
executive powers to the local level
Cont….
Human Resources Development in the Government or Public Sector
Poverty alleviation requires both attitudinal change and skills development among
government officials.
• Government officials need to regard the poor as clients and partners, rather
than the “governed” and ignorant who need to be taken care of. They need to
realize that often the poor know how best to solve their own problems and
succeed if a supportive institutional environment exists.
• The job of government officials is to facilitate the creation of such supportive
institutional environments.
• Government officials also need to learn from the situation on the ground
rather than develop policies that are based on imported models, theories and
standards from developed countries.
• In addition to attitudinal change, government officials also need
assistance in developing their skills, not only to interact with
organizations of the poor but also to provide the technical
assistance required to address the problems faced by them and to
improve their working and living environments.
Human Resources Development among the Poor and their Partners
Human resources development in the organizations of the poor and
among civil society organizations working with the poor is also
required. They need capacity-building in strengthening and
expanding collective mechanisms and improving the articulation of
their needs and demands.
(a) Strengthening and Expanding Collective Mechanisms
• If poor are organized, united and in possession of technical and
managerial skills, they can improve their conditions and break the
cycle of poverty.
• They can resist stronger groups, and influence decision-making
and build equitable partnerships with governments andother
actors in society. Coalitions among them help strengthen the
bargaining positions of the poor and assist them in building
beneficial partnerships.
Cont…..
Community-based organizations and collective mechanisms that are
developed around issues of long-term concern, and that are able to
engage the poor continuously and sustainably, such as community
trade-based savings and credit schemes, have a greater potential for
empowering the poor and breaking the cycle of poverty. This is
because they create a core, organized group within communities
around which other issues of common concern can be discussed and
addressed by activating other community members.
To acquire power vis-à-vis other actors in the city, the poor have to
organize themselves into collective mechanisms such as community-
or trade-based organizations. This requires concerted effort in
training new community organizers and further developing the skills
of existing community organizers.
Cont……
Moreover, the poor and their partners also need assistance in
transparent management of community- and trade-based organizations
including such skills as financial and operations management, working
in group environments and consensus-building. They also need skills
such as negotiation, coalition-building and networking to build
partnerships with other actors in urban areas.
(b) Improved Articulation of Needs and Demands The poor and their
partners need assistance in improving their skills at advocacy and in
accessing, analyzing and disseminating information, including skills
related to improved technologies and markets. They also need
assistance in social marketing techniques to effect social and political
change, including more effective use of information technologies to link
with international and regional civil society movements and campaigns,
and the local and international media.
Cont…..
Increasing Access to Information
One of the key components of power and wealth creation is
access to information and knowledge and the ability to use that
information or knowledge for economic or social
[Link] and initiatives that seek to provide information
to the poor in easily understood media and forms greatly
contribute to their empowerment.
A free flow of information also contributes to transparency in
decision-making. Some governments, for example, require public
hearings before large infrastructure projects are initiated. Even
where such public hearings are impartial, the poor are often
unable to participate or influence decision-making because they
do not have the financial or human resources to interpret the
information provided. Some non-governmental organizations and
Cont…….
academic institutions are working to fill this gap. For instance,
non-governmental organizations and academic institutions may
analyze and evaluate trends and the feasibility and impacts of
programmes and projects in the city, and where needed, to work
out alternative solutions to governmental proposals.
The processed information can be then provided in an
understandable form to the groups and communities that would
most likely be affected. Equipped with such information, poor
communities can resist projects that were either unnecessary or
whose negative impacts would be far greater than their potential
benefits.
2. Labor Markets & Employment
• Employment opportunities for the urban poor are
affected by diverse factors including macroeconomic
conditions, regulatory constraints on small businesses,
lack of access to job market opportunities, infrastructure,
education and training, and bad health.
A subset of policy interventions particularly targeting the poor at the local level are:
Support to small and micro-enterprises Increasing access to job opportunities
Supporting home-based, income-generating activities and employment intensive
work programs
Other enabling policies
a) Facilitating the flow of information on jobs and markets for products,
b) Providing practical job training
c) Supporting the sectors that have higher employment generation capacity. For
example, the construction sector (including housing and infrastructure) accounts for
between 40 and 70 percent of gross fixed capital formation in developing countries.
Other enabling policies
d) Cities can also take a role in the creation of short-term
employment, for example, through public works programs. Such
programs typically address urban infrastructure deficiencies through
small works investments.
e) Facilitating child care to enable women to work. Governments can
initiate simple and cost-effective programs with the help of NGOs
and community-based organizations (CBOs).
3. Land, Housing and Urban Services
The vulnerability of the urban poor is exacerbated by the
inadequate provision of basic public services, as well as by policy
and regulatory frameworks that govern land and housing supply
and property rights.
Policy reforms are required in the areas of Tenure security, property
rights and land development regulations; Housing finance; Service
provision.
Many of the urban poor have to house themselves illegally because
a) Land policies do not make sufficient developed land
available:
b) Land and housing regulations make housing
unaffordable: prices to increase.
c) Land and housing regulations make it difficult for the
poor to follow cumbersome Procedures
d) Lack of access to credits:
Suggested Policies
a) Public authorities need to establish systems to provide tenure
security (e.g., freehold or use rights) in view of the country's
cultural context and communities‘ particular circumstances.
b) It may often be possible to sell occupied public lands to the
resident communities or individuals. :
c) Transparency in land provision by establishing a clear division of
authority among public agencies, simple rules and mechanisms of
provision (which are accessible by everybody), and by establishing
private property rights.
d) Easy market transactions through clear and simple sales and
registration procedures and taxation policies.
e) Cities and national authorities should explore practical but
transparent methods to promote the better utilization of public land
while improving access for the poor
Cont……
f) Policies at the central level should set out a broad
framework, while more detailed planning policies should
be designed at the local level. For example, density levels
in different parts of the city and infrastructure standards
should be decided at the city level, in consultation with
local communities.
g) Flexibility should also be extended to building standards, construction material
standards, and codes.
Regulations that can be eliminated without jeopardizing safety should be
eliminated in order to keep construction costs down
4. Financial Markets
Lack of access to credit increases the vulnerability of the urban poor
by constraining their ability to improve their homes, their work, and
to start new businesses.
Credit underwriting is a major problem since the poor do not have
property to use as collateral and often lack regular incomes.
Supporting micro-finance programs and provision of tenure security
to support underwriting are possible policy actions at local levels.
5. Social Protection and Social Services
Social insurance benefits include unemployment insurance and
assistance and pensions.
Safety nets/social assistance interventions include various cash and
in-kind transfers programs such as child feeding, vouchers for
schooling and housing, etc., that supplement income
6. Urban Environment
Environmental problems exacerbate urban poverty. Poor cities and
poor neighborhoods suffer disproportionately from inadequate
water and sanitation facilities and indoor air pollution.
Poor people are often forced to live in environmentally unsafe
areas, steep hillsides and flood plains or polluted sites near solid
waste dumps, open drains and sewers, and polluting industries.
Such sites often the only ones available for housing of the poor
because they are unattractive to other potential users and land
use policies make other locations unaffordable
Possible Interventions:
a) Solid waste management:-
b) Water supply, sanitation, and wastewater
management:
c) Industrial pollution management:.
d) Cleaner fuels: indoor pollution due to household
level energy sources is also a major cause of health
poverty in cities.
In may Central European countries switching from
coal to gas in household eating and cooking has
been effective in improving air quality
Activation questions
1. How do you define urban poverty? What
criteria do you use? According to your definition
that are poor and/not poor in the urban area you
are familiar with?
2. Describe the characteristics of urban poverty
from the context of your city.
CRTC UP
Inadequate or unstable income, which translates into
inadequate consumption;
Inadequate, unstable or risky asset based income,
considering that there are many different kinds of assets –
including social, human, financial, physical (capital goods,
equipment, etc.) and natural (for instance access to
productive land);
Poor quality/insecure housing and lack of basic services,
squalid living conditions, risk to life and health, poor
sanitation, air pollution, crime and violence, natural disasters;
and
Discrimination and limited access to formal labor market