A PIECE in this week’s finance section discusses whether slums are poverty traps. Economic research on slums is very tentative: speak to anyone who researches shanty-towns and they will tell you how difficult it is to get even the simplest data. But most economists agree on one thing: some people do very well out of slums.
The people who control housing are one such group. Contrary to popular belief, a large proportion of slum-dwellers rent their home. About 92% of households in Kibera, a massive Nairobi slum, do so. And there is plenty of opportunity for exploiting tenants.
A new paper* by Sean Fox of Bristol University focuses on absentee landlords in Kibera. Well-connected types, Mr Fox finds, can acquire control over swathes of land thanks to their political connections. One survey found that 41% of Kibera’s landlords were in fact government officials: 16% were politicians.
These landlords can exploit their privileged position. Research from MIT, again in Kibera, find that when the chief of the local area and the landlord come from the same tribe (but the tenant does not), renters end up paying 6-11% more. Chiefs and landlords collude to extract higher rents. Investments in housing infrastructure are also lower when a landlord and the chief belong to the same tribe.
We discuss the consequences of these oligarchic arrangements in the article:
In Kibera, a big slum in Nairobi, the authors of the MIT study show that rents represent one-third of non-food expenditure, whereas in rural areas in Kenya 90% of households pay no rent at all.
Mr Fox reckons that these arrangements are partially a legacy of colonial rule. He argues:
Colonial administrative structures were weak and highly centralised, and municipal authorities were granted very limited authority over development and regulation…In a context of rapid population expansion, such structures have proven cumbersome and have contributed to the proliferation of unplanned settlements.
In other words, clumsy colonial governments were bad at controlling urban development. Mr Fox demonstrates this empirically. Legal fragmentation in the colonial era, a proxy for indirect rule, is strongly correlated with contemporary slum incidence (measured here as the percentage of a country's urban population living in slums):
Poorly-run colonial systems allowed for the emergence of dodgy groups that monopolise rental markets. These unfortunate arrangements remain today.
* Fox, S. (2014). The Political Economy of Slums: Theory and Evidence from Sub-Saharan Africa. World Development, 54, 191-203.
via:http://www.economist.com/blogs/freeexchange/2014/02/metropolitan-economies
No comments:
Post a Comment