Cohen Urban Assistance and the Material World

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Environment&Urbanization Vol 13 No 1 April 2001 37

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Urban assistance and the material world:learning by doing

at the World Bank

Michael Cohen

SUMMARY: This paper explores the contradictions between the ambition toestablish a more effective framework for the development and management of cities,and some of the realities of urban life. It discusses this through the lens of the World

Banks evolving urban assistance programme during the 1980s and 1990s as it shifted from urban projects to strengthening municipal and metropolitan capacity,and from supply to demand orientations. The first section sets out the as yet unresolved problems of metropolitan management. The second describes the diffi-culties and dilemmas that international agencies faced as they developed urban

programmes. The third describes the World Banks efforts to strengthen urban inst i-tutions in different urban and country contexts. The paper concludes by empha-sizing the need for more attention to the material world the physical and spatialcontext of homes and neighbourhoods where urban dwellers spend most of their lives and make most of their investments. To ignore this it to risk cities in the futurehaving even less cohesion than the sprawling metropolises of today.

I. DEFINING THE PROBLEM

WHETHER IN BUENOS Aires or Mumbai, Dhaka or Dakar, cities havemore jobs and more people, cover more land and generate more wastes.Urban social and economic behaviours are more comp lex, whether insidethe evolving forms of households, neighbourhoods, districts or enter-prises. Above this material world are increasing n um bers of institutionspresu ming to p lay a role in what h as loosely been defined as ur bangovernance.

Demograp hic growth , spatial expan sion, econom ic differentiation,social com plexity, cu ltura l diversity and institution al fragm entationwou ld suggest that m etropolitan forms and frameworks should emergeto respond to the m any challenges w hich accomp any th ese processes. Theenormou s problems of poverty and inequality, and dan gerous levels of pollution in m any big cities are begging for solutions. But even with theadd ed pressures of global izat ion, which is comm only perceived asincreasing the concentration of u rban pop ulations in metropolitan areas, (1)there are few cities wh ich claim to have created successful metrop olitanframeworks for managing th eir affairs. Managing urban life and helpingto meet the needs of growing pop ulations wou ld seem to require a visionof the whole, and institutions able to operate at the metropolitan level.Yet, everywhere, the metropolitan impulse is frustrated.

Michael Cohen i s the di rec-

tor of the Graduate Programin International Affairs atthe New School Universityin N ew York. He w orked atthe World Bank from 1972 to1999 and participatedheavily in the framing of World Bank urban policiesand assistance programmes.

Address : InternationalCenter for AdvancedStudies, N ew York Univer-sity, 53 Washington SquareSouth, New York, New York

10012, USA; e-mail :[email protected]

1. See, for example, Hall,Peter an d Ulrich Pfeiffer(2000), Urban 21: The Report of the Global Commission onthe Urban Future , E and F NSpon, London.


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Not only are institutions an d forms of action insu fficient in th e face of growing urban needs but the conceptual frameworks from the variousdisciplines are also undeveloped in the face of this real world challenge.Analytical failure is reflected in norm ative failure: we d o not u nd erstand ,and our actions h ave only marginal impacts on m etropolitan p roblems.Thomas Bend er observed that:

It is becoming commonplace that established representations of thecity and subu rb do not hold . Our capacity to describe or theorize the socialand spatial organization of the contem pora ry m etropolis is man ifestlyinadequate to wha t we know of the metropolitan experience. (2)

This commentary can be extended to other fields, including econom ics.In a sense, the process of metropolitan growth is an u rban economist sdream . It is the final confirmation tha t economies of scale and agglomer-ation are so irresistible that u rban a reas will continu e to grow to unp rece-dented d emographic, economic and spatial dimensions. Bigger is not onlyinevitable bu t it is also better. (3 ) So w hy do these economic incentives notgive birth to app ropriate metropolitan institutions?

This parad ox also faces stud ents of political science and pu blic adm in-istration. Seeking to find institutional formu lae for balancing the needsfor representation, decision-making in the p ublic interest and the notionof subsidiarity , which argues that decisions should be taken at the levelclosest to where their impact is felt, the institutional sciences posit theneed for institutional auth ority and arr angem ents with m ultiple levelsand respon sibilities. Each level reflects both the m ultiple an d p arallelscales of urban problems and the need for mechanisms to mediate conflictand coordinate efforts. These are captured in the economic notions of spillovers and externalities wh ich su ggest that behaviours in one

jurisdiction are likely to have impacts in others. This is certainly correctwh en app lied to environmental issues and strongly argues for metropol-itan environmental m anagement.

But th ere are few examp les of positive urban man agement su ch asBarcelona, Curitiba or Seattle. These cases, each a metropolitan area , arerather noted for their culture, environmental management or blend of dynamic economy and livable neighbourhoods. For many years, Metro-Toronto was the most frequently-cited example of effective metropolitangovernment and it attracted thousands of urban specialists and publicofficials from around the world to learn how to think and work at themetrop olitan scale. But a recent reform abolished Toronto s metropoli-tan government. Had m etropolitan governm ent in Toronto been a case of false ad vertising? (4)

II. URBAN ASSISTANCE AS A SOCIALEXPERIMENT IN THE WORLD BANK

a. The Early Beginnings

THERE IS ALSO the issue of inap pro pr iate urba n gov ernm ent. Whenworking in Abidjan in 1969, I observed a long line of red crosses on thewh ite walls of houses in Ad jame. The busy movem ent of people andtraffic seemed t o ignore wh atever m essages these red crosses weresend ing. After the second block, I realized that th ese were not an nou nc-ing clinics. When I asked wh at they mean t, a middle-aged wom an in thestreet angrily replied: Ah, the government w ants to knock dow n our

38 Environment&Urbanization Vol 13 No 1 April 2001

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2. Bend er, Thomas (2001),The new metropolitanismand a p luralized pu blic ,

Harvard Design Review,Winter-Spring, pages 70-77.

3. See, for exam ple, Becker,Charles, Jeffrey Williamsonand Edw in S Mills (1992),

Indian Urbanization and Economic Growth Since 1960 ,

Johns Hopkins UniversityPress, Baltimore.

4. Bourne, Larry (2001),Designing a metropolitanregion: the lessons and lostopportu nities of theToronto experience inFreire, Mila and RichardStren (editors), TheChallenge of UrbanGovernment: Policies and Practices , The World Bank,Washington DC, pages 27-46.


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hou ses in order to fix up the city. The houses with red crosses will be bull-dozed.

The following week, this prediction proved correct. Bulldozers cutwid e swath es through the Adjame neighbourh ood of 100,000 people.Some peop le tried to protest but police pu shed th em aw ay with night-sticks and even fired a few shots in the air. Abidjan, the capital city of theIvory Coast, was being improved in spite of the wishes of its residents.The events in Adjame were not isolated; the government had bulldozed20 per cent of the housing stock du ring the first decade of ind epend ence,to m ake the ci ty modern . The then Minister of Constru ction ha dproclaimed governm ent policy as build big, beautiful, and forever .(5) AFrench geograph er work ing in Abidjan had described this policy asdou ble or nothing ; build ings either conformed to the im age of Abid janas a modern city escaping its colonial past or they w ere to be destroyed (6) another example of people receiving h arsh m edicine in their best inter -ests .

This approach was not unusual; indeed, it followed precedents set inEurope and North Am erica. The p revious year, bulld ozers had m ovedinto parts of the South Side of Chicago and d isplaced p eople in the nam eof progress. But this app roach was being questioned . In Britain, there wasthe growing dissatisfaction from those displaced by redevelopment andthe move to new pu blic housing estates. In the United States, analyses of the race riots in Detroit, Los Angeles and New ark had concluded that riotsseemed to occur in cities where so-called anti-poverty programmes hadbeen successful .(7) If the red crosses of Abid jan w ere symbols of policyfailure, they were no more d ram atic than the blowing u p of the recentlyconstructed Pru itt Igoe apartm ent bu ild ings in St. Louis. The irony, of course, was that th e Ivory Coast government w as hoping to h ouse itspeop le in n ewly constructed ap artment bu ild ings. Definitions of progresswere relative and changing, yet they had immediate consequences forpeople, particularly poor people. These patterns had been repeated inman y cities, rich an d poor; in poor cities, frequently making poor p eoplepoorer in the nam e of making the city look rich.

After comp leting the research in Abidjan an d p ublishing a book aboutthese contrad ictions (wh ich made me persona non grata in the Ivory Coastfor several years), I was offered a job at the World Bank, which w as begin-ning to be asked by its member governm ents for help in add ressing urbanproblems. Starting in the early 1970s, the Bank began what became thelargest development assistance program me to ad dress the p roblem of urban poverty, although man y other mu ltilateral and bilateral agenciesalso d eveloped urban programm es. Ten thousand urban centres in m orethan 150 coun tries received interna tional aid. Urban know ledge, experi-ence, resources and ideologies from both rich and poor countries wereapplied to cities and towns, large and small. From the Bank, projects,plans, investments, research and loans were used to mobilize and lever-age local resources to provid e needed hou sing, water supp ly, sanitation,transp ortation, environmental m anagem ent, edu cation, social servicesand commu nity d evelopm ent. Some US$ 60 billion w as transferred tothese urban areas, in most cases through their national governm ents.

The prim ary objective was to alleviate poverty and many succeededin providing essential services. This assistance also involved, both im plic-itly and at times explicitly, the tran sfer and app lication of m odels of thefuture from one society to another. Urban aid was n ot just abou t meetingpresent needs bu t, perhaps m ore imp ortantly, about d iscovering new


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5. Statem ent by MichelGoly-Kouassi, in Fraternit

Matin , 1969.

6. Ha eringer, Philippe(1969), Quitte ou double:les chances del'agglomerationabidjanaise , ORSTOM,Abidjan.

7. Balbus, Isaac (1971), The Dialectics of Legal Repression ,Russell Sage, New York.


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mod els to guide future d evelopm ent.During this period, the world s urban pop ulation increased r apid ly,

from 37 per cent of the w orld s populat ion in 1970 to 47 per cent in 2000.Projections suggest that the urban population in Africa, Asia and LatinAmerica will double between 2000 and 2025. How well cities, countriesand the world as a w hole will respond to this extraordinary pop ulationshift w ill depen d in som e measu re on how the experience of this earlierperiod is und erstood. Were some countries and cities able to solve theirurban p roblems? What p olicies and projects actually worked and accord-ing to w hat criteria? Were the experiences of rich countr ies helpful to poorcountries? How can we un derstan d th e transfer of urban m odels to citiessuch as Abidjan wh ere the red crosses reflected values and aspirationsbased on perceptions of modernity and development in high-incomecountries? Is it possible to avoid th e mistakes of the p ast to imp roveprospects for th e future? These questions su ggest not only th at retro-spective evaluation might be interesting an d even p rovocative but thatthere are real stakes involved for th e quality of the lives of coming gener-ations. (8)

This paper reflects on th e intentions and objectives of wh at w as triedat the World Bank, wh at was achieved an d w hat controversies emerged ,including some that have still to be resolved. It also suggests what thisexperience might contribute to a better un derstand ing of cities. It isinevitably influenced by the fact that the author was deep ly involved inthis effort du ring this period as a staff member and man ager in the WorldBank. It is up to th e reader to jud ge the balance between on-the-groun dexperience and the objectivity of this analysis.

b. Assistance as Experiment

One view of international assistance which m ay be helpful in structur ingan h istorical analysis is to consid er assistance as an experim ent. Based onassump tions about problems and their likely remedies, one individu al,group or institution decides, by whatever process, to help another. Theprocess is essentially experim ental, withou t the certainty that assu redresults will be achieved. The decision to help is based on expectations thatspecific outcomes m ight ensu e, but the intern ational and hence-cross-cultural dimension makes the w hole enterprise risky and far from secure.Moreover, assisting a na tion, a city, a commu nity or a hou sehold in n eedalso involves an acknow ledgmen t that, for whatever reason, the recipientis lacking som e resource or oppor tun ity which th e assistance is intendedto provide. The situation is not perfect, so the likelihood of total successis, from the ou tset, in doubt.

This decision is also inherently political and economic because, at somelevel, there are expectations about reciprocity, whether the recipient isexpected to p erform some subsequent service or pay back a loan. (9) Theremay also be legal and contractual obligations on both sides of the rela-tionship. The original social objectives of assistance can easily becomelost in the complexities of these relationships. So too can the extraord i-nary opp ortun ity to learn from each case by taking a critical persp ectiveof what is ultimately a social experiment.

c. The Efficacy of International Aid

At a time w hen th ere is growing med ia coverage of econom ic and social


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8. US National Academ y of Sciences (2001

forthcoming), Report of the committee on urbandemographic dynamics ,Washington DC.

9. Haw kins, Edward (1970),The Principles of Development

Aid , Penguin Books,Harmondsworth.


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distress in m any p arts of the w orld, many p eople are learning about theactivities of international financial institutions su ch as th e InternationalMonetary Fun d, the World Bank, the various United N ations agencies andthe more than 50 bilateral national aid programmes. Some question thecontent of aid and, specifically, the economic conditions which accom-pany large-scale financial assistance in the face of economic crisis. Theybelieve that fiscal policy cond itions are too severe and may prod uce moremisery than they alleviate. Others argue against these institutions them-selves, created by the Western industrial democracies in the post-warperiod to provid e developmen t assistance.

Comp laints abou t international bureau cracies, lack of transparency andinsufficient p ublic accountability of the internat ional finan cial institutionsare all valid to some extent bu t they need to be und erstood in terms of theorigins of these institutions and how they have evolved from being dom i-nated by rich countries to their present management by representativesof ministries of finance from both r ich an d poor countr ies. Their assistancereflects political and econom ic intentions, bu t not only of the rich coun-t r ies. With India and Pakistan , Peru an d Ecuad or, Guatemala andHond uras, and m any other countries watching each other s every movein the international institutions, the norm s of international behaviour andcriteria for official international assistance are very mu ch the result of negotiated and med iated processes whose results may u ltimately satisfyno one. (10)

Yet, the reality is that, despite notable exceptions such as p otential envi-ronmental an d social damage from h ydroelectric dams requ iring reset-tlement or other large infrastructure p rojects, most aid has p rovidedpositive benefits to recipient countries and commu nities. (11) This is not tosay that all imp acts have been positive or that the imp acts have achievedeither the potential or envisaged benefits at the mom ent of design. Watersupply systems have been bu ilt but their maintenance and op eration havesuffered u nd er conditions of local budgetary au sterity, hence their bene-fits may have been limited. Millions of children have received primaryeducation, vaccinations and other health and nutritional assistance as aresult of international aid. This may not have received mu ch med ia cover-age or political attention but it d oes deserve to be includ ed in an y overallcalculation of wh ether aid h as been useful or not.

The debate over aid mu st also take into account the nu mbers involved:at no time in th e past 30 years has international aid exceeded US$ 60billion a year. This is 20 per cent of the ann ua l bud get of the US Depart-ment of Defense du ring the same p eriod or equivalent to the an nu alexpenditure in the US on dog food. The reality is that US$ 60 billion formore than 2 billion very poor p eople in low- and midd le-income coun-tries is hard ly likely to have a m ajor imp act on a global scale. A stud y of US foreign aid in the mid-1990s revealed that a sam ple of the Am ericanpublic believed that about 15 per cent of the US budget was devoted tointernational aid; the reality was much more modest, not even reachinghalf of 1 per cent.

From an u rban p erspective, the quan tity of urban assistance has alwaysbeen small. While the exact nu mbers have been the subject of mu ch debateby the few p eople wh o have actually don e the hard w ork to und erstandthe nu mbers, the reality is that u rban aid has been a small propor tion of total aid an d even sm aller when compared to the efforts mad e by the low-and m idd le-income coun tries themselves. (12) An estimate in the early 1990sof investment in urban infrastructure conclud ed that total investment

10. See, for exam ple,Caufield, Catherine (1996),

Masters of Illusion: The World Bank and the Poverty of Nations , Henry Holt andComp any, New York.

11. Cassen, Robert andAssociates (1994), Does Aid Work? , Clarendon Press,

Oxford.

12. See, for example, thework of DavidSatterthwaite (1998), Theconstraints on aid anddevelopment assistanceagencies giving a highpriority to basic needs ,PhD th esis, London Schoolof Econom ics and PoliticalScience. Urban aid is n oteven mentioned in theEarthscan series, The Realityof Aid , Earthscan, Lond on,2000.


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from pu blic and pr ivate sources was abou t US$ 150 billion a year with notmore than US$ 6 billion a year coming from external sources. (13) Again,although international urban assistance is an imp ortant social experiment,its magnitud e and importance should not be overestimated in the realwor ld of d aily global finan cial flows and transactions.

Putting aid into context is also importan t because the most carefulanalytical stud ies of the efficacy of aid have conclud ed that the p olicyenvironments in which investments are mad e both m acro-economic andsectoral p olicies hav e major imp acts on the success or failure of projectsand, more specifically, on their financial and economic rates of return. (14)Indeed, one might argue that there is an iron law of development proj-ects : it is impossible to und ertake a sustainable d evelopment project ina contrad ictory p olicy environmen t. For examp le, in countr ies experienc-ing high inflation, such as Argentina or Bolivia in the 1980s, it was verydifficult to execute investments since pr icing services and recovering costswa s nigh imp ossible. Similarly, building h ousing for the p oor in a citywh ose government w as bulldozing its slums w as hard ly likely to increasethe availability of housing. Imp roving those slum s in situ w as mu ch morelikely to increase the quan tity and quality of hou sing than u sing the bull-dozer as a policy instrum ent, as in Abidjan.

d. The Context of Urban Growth

Understanding the context of urban aid also requires knowing about theshifting patterns of urbanization. Can we confirm the hypothesis of urbanconvergence with cities in the North and South sharing their most impor-tance characteristics: declining infrastructure, growing un employment andsocial problems, d eteriorating environm ent, bud get crisis and a lack of social consensus on how to solve these problems? (15) How has the growingscale of urban areas affected their social, econom ic and political institutions?For example, have new forms of management been d eveloped to cope withmetropolitan areas and m ega-cities such as Mexico City, S o Paulo, Jakar taor Manila? These are not only academ ic questions bu t are central issues forpolicy makers w ho have the responsibility to ensure the continued prod uc-tivity of these cities. If elected mayors had pr imarily political and adminis-trative responsibilities in the 1950s, today they are expected to be m anagersof local economies, protectors of their na tural environments, comp assion-ate advocates for social expenditures, as well as effective marketeers fortheir cities in the w orld of global urban competition for investmen t, tourismand comm unications. (16) These deman ds reflect the trends of the past half-century and the now accentuated pressures on the pu blic sector to d o morewith fewer resources, all the time being aw are of the financial pressures of pr ivatization of infrastructure and services.

The most generalized feature of these cities, however, is their increas-ing internal diversity: of peop les, institutions, econom ic and social behav-iours, p hysical form s and capacities. Processes of differentiation h avedr amatically changed urban life in the past half-centu ry both in term s of pace and content of change. The patterns of differentiation between n eigh-bourhoods, families, men and women, the young and the elderly, ethnicand religious group s and the segmented labour forces working in themany sectors of the economy are reflected in social d istance, new patternsof inclusion an d exclusion, comm un ications, opp ortun ity and, m ostvisibly, competition an d conflict. (17) Many cities have experienced increas-ing social tension, exacerbated by economic change and the u nexpected


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13. World Bank estimate,1991.

14. World Bank (1991),World Development Report:The Challenge of

Development , OxfordUniversity Press, Oxfordand New York.

15. Cohen, Michael (1996),The hypothesis of urbanconvergence in Cohen,Michael, Blair Ruble, Josep hTulchin and Allison

Garland (editors), Preparingthe Urban Future: GlobalForces and Local Pressures ,Johns Hopkins UniversityPress, Baltimore.

16. Kantor, Rosabeth (1995),World Class: Thriving Locallyin the Global Economy ,Simon and Schuster, NewYork.

17. See reference 8; alsoCohen, Micha el (2000),Mirando a traves de uncaleidoscopio urbano , LaFactoria , Junio-Septem bre,Barcelona, pages 33-52.


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impacts of global economic pressures, whether they be interest rates, oilpr ices or new form s of economic migration. Global chan ge prov idesincreasing op por tun ities for the expression of local d ifferences by u pset-ting existing locally and historically med iated relationships. Indeed , citieshave become wor lds of d ifference.

The challenge for urban assistance is no longer simp ly to provid ecircumscribed packages of physical aid as might have been understoodin the p ast bu t, rather, to ask how the capacity of local institutions can bestrengthened in ord er to man age these increasingly comp licated urbanproblems in env ironments of diversity and change. Cities are vastly morecomplicated p ublic and pr ivate arenas, with global, national, regional andlocal dim ensions, with m ore app reciation of the imp acts of one sectorup on another and with increasing nu mbers of well-trained u rban analystsand technicians who are well-aware that few cities in h igh-income coun-tries have solved their u rban p roblems. In a w orld of rapid comm uni-cations, new s of urban success , such as the redu ction in th e crime ratein New York, encourages u rban man agers to consider the same policies intheir localities, even if the alleged outcomes w ere debatable in New York and the method s not ap propriate for their own cities and popu lations. Asthe stakes of this urban enterprise grow as they must so too do thestakes in und erstanding better what has w orked and wh y. Investing inun derstand ing how to ensu re econom ic and social opp ortunities in citiesmay be one of the most importan t social and research investments wh ichthe world could make as it starts its first urban century . This pap erseeks to contribu te to tha t learning in the sp irit of a saying by one Africanleader 30 years ago: Science with ou t conscience is the ru in of thespirit. (18)

III. THE DILEMMAS OF STRENGTHENING URBANINSTITUTIONS

a. Learning by Doing

BY 1981, STAFF at the World Bank decided to und ertake a retrosp ectiveevaluation of its first ten years of urban assistance. During th is period, theBank had contributed finance to 62 projects in 36 countries, contributingUS$ 2 billion of lending toward s total p roject costs of abou t US$ 4.6 billion.These projects were group ed in to four categories: hou sing (sites-and-serv-ices and slum u pgrad ing), urban transport, integrated urban d evelopm entand regional developm ent. Starting from two p rojects a year in 1972-73,the p rogramm e had expand ed to 13 projects by 1978 and eight to ten p roj-ects a year, thereafter. Total project costs and loan sizes increased from lessthan US$ 10 million for in itial operations to an average US$ 140 million by1981, of wh ich t he Bank finan ced an avera ge US$ 60 million for eachproject. (19)

This review, entitled Learning by Doing , was intend ed to answerthree questions: what h ad been achieved by the first generation of proj-ects? What had been learned? And was it possible to reduce the Bank sown financial costs of urban lend ing wh ich w ere perceived by m anagersthrou ghou t the Bank as h igh and un justified? The review began in 1981,with d iscussions with executing agencies in borrow ing countr ies followedby an analysis of files of docum ents for 62 projects, ma ny of w hichinvolved investments in many cities within ind ividual coun tries. An effort


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18. Hou phouet-Boigny,Felix, President of C ted Ivoire, 1968.

19. Cohen, Michael (1983), Learning by Doing: World Bank A ssistance for Urban Development, 1972-81 , WorldBank, Washington DC.


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was m ade to estimate the nu mbers of urban poor w ho had actually bene-fited from the projects.

Learning by Doing conclud ed tha t: Project team s of officials from recipien t coun tries, Ban k staff and

consultants had been able to d evelop low-cost, affordable solutions forthe provision of hou sing and u rban infrastructure. Many of these solu-tions demon strated that enormou s cost savings were possible if thepr imary criterion w as affordability by the poor. The cost of sites-and -services in Bauchi, Nigeria was 4 per cent of the cost of the cheapest u nitbeing built by the public sector in that coun try. The Kamp un g Improve-ment Program me in Indon esia, with p er capita costs of US$ 37, show edtha t provid ing services for the p oor w as feasible. Of the US$ 4.6 billiontotal p roject costs, abou t 40 per cent of the benefits in 75 per cent of theprojects directly reached p eople w hose incomes w ere below one-thirdof the national average per capita income. The rates of return on the nineprojects approved in 1981 had an estimated econom ic rate of return of about 20 per cent.

If the projects enjoyed physical success, they were nevertheless facingnu merous time-consum ing obstacles and institutional problems su chas land acqu isition, tend ering and award ing of construction contracts,inadequ ate cost recovery and inadequ ate coordination among pu blicsector agencies.

Although the first-generation p rojects were estimated to have helped 11million urban poor a considerable number this was vastly inad e-quate to the scale of the needs of the growing nu mbers of urban poor.

To add ress the last two problems above, mu ch more attention had to bedevoted to th e policy and institutional contexts of projects. Ind ividualneighbourhood projects needed to be more closely linked to the poli-cies and routine functions of mu nicipal governments such as op erationsand mainten ance of urban infrastructure and tax collection.Although Learning by Doing generally gave the first decade of opera-

tions a positive evaluation, there was w idespread d ebate inside andoutside the Bank on wh ether this evaluation w as too positive or too nega-tive. Over time, the comp lexity of its sub ject and evalua tion criteriasuggested that the report had been reasonable in both its positive assess-men t of p hysical accomp lishm ents an d its critical view of institutionalweaknesses. (20)

The most serious conclusion w as that u rban assistance, wh ile positive inits modest results, had been unable to significantly ad dress the scale of theneeds accompanying urban growth. (21) This was consistent with the obser-vations of other u rban analysts. (22) Rather than devote d etailed attention tourba n p rojects at the neighbou rhood level, it w as necessary to sup portprocesses which generated the necessary capacity to produce many morehouses and urban infrastructure networks. These includ ed p romoting theconstruction ind ustry, reforming land acquisition and registry procedures,strengthening the capacity of local governments to p lan, develop andoperate urban service expansion, and identifying incentives to encouragethe participation of the private sector. Going to scale was increasinglyrecognized as essential if urban poverty was to be significantly reduced. Atthe sam e time, there was a clear sense that financing sites-and-services andslum upgrading was not sufficient to meet the broader agenda of issuesfacing cities. The range of comp onents to be integrated into projects nowincluded transport, education, health services, nutrition and, most impor-tantly in the minds of some, employment generation. (23)


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20. It is interesting to notethat in the alm ost 20 yearssince its pu blication andafter a large number of external evaluations of Bank u rban op erations,Learning by Doing hasnot been regarded as an inside w hitewash .

21. Discussion by the Boardof Executive Directors of the Retrospective Review of Urban Op erations,December 1982.

22. See, for instan ce Tur ner,John (1976), Housing byPeople , Pantheon Books,New York; also Cohen,Michael (1983), Thechallenge of replicability:towards a new p aradigm

for shelter in developingcountries , Regional Development Dialogue ,United N ations Centre forRegional Development,Nagoya, August.

23. In m id-1986, whilewaiting for the traffic lightto change in down townWashington DC, the authormet Robert McNama ra,wh o had by then retiredfrom the World Bank. Heintroduced h imself andMcNam ara grabbed him bythe lapels of his coat andstarted to say in a loudvoice, attracting manybystanders, You urbanguys knew how to dohousing but you had noidea abou t creating jobs. After what seemed like aneternity, McNamara wasprom ised a set of recentBank w ork on urbanemp loyment, to be hand -delivered th at da y. Thefollowing m orning at eightoclock, McNam ara calledsaying: Your conclusionsare OK, but your reasoningis terrible!


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b. Conceptualizing Urban Management

Many of the issues of scale and the role of ur ban institutions had longbeen discussed by man y of the international agencies working on u rbandevelopment. (24) Yet many par ticipants in the interna tional urban d ebatenoted the institutional difficulties of building strong municipal institu-tions with th e absence of democratic trad itions in m ost countries, includ-ing many with military governments, auth oritarian regimes or one-partystates.

It was no sur prise that u rban p olitical leaders later mayors wereoften leaders of the opp osition, against th e national governm ent. InLondon , for exam ple, harsh political conflict led to the abolition of anelected metrop olitan governm ent for London by Mrs. Thatcher. In LatinAmerica, the job of mayor of the capital city w as perceived as a stepp ingstone to the presidency. For interna tional agencies to tur n to th e mu nici-pal arena w as not only a technical and institutional challenge but a p olit-ical challenge.

c. Institutional Arenas to improve the Management of Cities

Much of the World Bank s financial assistance to cities during the 1980sfocused on th is problem. Six specific arenas can be d istingu ished w herethis work took place simultaneou sly in m any countries and th ese aredescribed below.

Municipal government in large and often capital cities . One of theimmediate complexities faced by u rban assistance was how to operate incapital cities where national ministries and departm ents were frequentlyinvolved and frequently part of the problem. National pride in the ap pear-ance of the capital city w as a comm on ra tionale used to justify the bull-dozing of slum s in Dakar, Manila, Mexico City, Nairobi and man y othercities. The decisions to d o so d id not originate in local institutions bu t fromthe p olitically d istant n ational officials. These sam e national officials werealso the defenders of building standards and codes whose implied costsassured that th e poor, a growing share of the city s pop ulation, could notafford legal hou sing in the city. The codes w ere instrum ents of ph ysicaland social exclusion.

The challenge to providers of international urban aid was to politelyavoid being sucked into these regressive and un just policies. The WorldBank team visiting Lagos in 1978 was asked to help in the financing of alarge slum removal programme, which the team gingerly sidestepp ed. Ateam beginning d iscussions with the govern ment of the Philipp inesdu ring the Marcos adm inistration, when Imelda Marcos was Governor of Metropolitan Manila and Minister of Hu man Settlemen ts, received arequest to sup port the removal of slum settlements on the Tond o fore-shore of Manila Bay, the very area w hich it was h opin g to imp rovethrough slum u pgrading. In that case, the slum dwellers themselves usedtheir strong p olitical organizing skills to resist government p lans and tonegotiate a situation w here the World Bank s assistance cou ld actually beused to improve the area.

Limiting the dam age of being involved w as not the p urp ose of workingin these cities. The objective was to try to strengthen local institutions ina p rogressive direction so that mu nicipal governments could plan, d esign,finance and manage th eir ow n p rogrammes. This meant m aking a big


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24. See, for instance, thediscussions du ring the 1976United Nations Conferenceon Hu man Settlements(Habitat) held in

Vancouver.


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investment in learning about mu nicipal institutions, includ ing finance,personnel systems, investment p lans, technical capacities and weaknesses.This effort frequent ly revealed su rp rises. In Madras in 1977, a senior Bank financial advisor discovered hu nd reds of dead former emp loyees on thepayroll of the mun icipal corporation, which had 28,000 emp loyees at thetime. In Ou agadou gou in 1978, it w as found that n o mu nicipal vehiclehad two w orking head lights. The total revenue of mun icipalities in someof the West African capital cities was below US$ 1 per p erson p er year,hard ly sufficient to p rovide any services. Ind eed, more than 70 per cent of mu nicipal expend itures wen t on p ersonnel costs in some of these cities.

Arguing th at m un icipal governments w ithin capital cities neededautonom y and political supp ort p roved d ifficult as wa s the case inWashington DC. The record of international assistance in capital citiessuch as Lagos (when still capital of Nigeria), Bangkok, Mexico City andBogota w as less effective on the w hole than in other cities in those coun-tries. In some cases, the Bank an d other d onors tried to avoid the capitalsaltogether, for examp le, Delhi, Brasilia, Islam abad , Ankara or Algiers not a lways su ccessfully. A footnote to this experience was the strong objec-tions by th e Bank to finan cing new capital cities such as Abu ja, Dodom aand Brasilia on the grou nd s that the op portu nity costs of such p rojectsw ere excessive and that th eir justification w as political rather th aneconom ic. In fact, the new capital cities wen t to g reat lengths to exclud ethe p oor, frequently the sam e peop le needed to complete these vastconstruction projects.

Groups of cities outside the capital . One of the most effective arenasfor urban assistance in th e 1980s proved to be working w ith group s of cities outsid e the cap ital. The Paran a State Project in sou ther n Brazil,developed in the early 1980s, involved the provision of basic mu nicipalservices to 237 towns. After each tow n received investment fund s in thefirst year, annual allocations w ere based on local performance in operat-ing and maintaining those investments and increasing local revenues tocover the operating costs of more facilities. A self-selection mechanismoperated wh ereby ind ividua l mun icipalities had strong incentives toimprove local managem ent and revenue p erforman ce. Acknowledgingthe risk that such a mechanism could prove to have Darwinian conse-quences with th e weaker m un icipalities falling furth er behind thestronger in term s of qu ality of infrastructure an d living conditions Paran a state officials prop osed th at all municipalities receive a basic life-line allocation for water sup ply and sanitation investments.

This project proved to be very successful and was repeated not on ly inParana but, w ith some modifications, in several other states in southernand central Brazil. While these p rinciples were useful in Brazil, they werenot acceptable to the Mexican govern men t in its comp licated revenue-shar ing relations w ith the Mexican sta tes. Similar objections w ere voicedin other coun tries wh ere constitut ional arrangem ents between thenational and state or provincial governments preclud ed su ch perform-ance-based relationships. Neverth eless, elaborate program mes to aidgrou p s of cit ies were d eveloped in Argentina , Colom bia, Mexico,Nicaragua, Ind ia, Ind onesia, Korea, Philipp ines, Thailand , Ghana, Kenyaand Zimbabw e du ring the 1980s. As experience was gained w ith theseprojects, the average number of multi-city projects and cities per projectincreased every year during this period.

This major expansion of urban aid ou tside the cap ital cities is one rela-tively invisible yet positive aspect of the urban assistance experience


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because most international observers tended to stay in capital and/ orlarge cities. Yet, man y smaller cities were the loci of sustained and rap idurban grow th. By the m id-1990s, and with p reparations for the Habitat IIConference in Istanbul, the World Bank s urban p ortfolio had grown toinclude assistance to local programmes in more than 7,000 cities andtowns. The criteria adopted by state governments for selecting munici-palities to participate in these program mes tend ed to combine threeelements: potential for economic growth , local institutional p erformance,and measu res to ensure minimu m levels of urban, mostly infrastructure,services to satisfy the basic needs of growing u rban p opu lations.

Inter-governmental financial relations . Two of the m ost comp licatedaspects of strengthening m un icipalities proved to be und erstandingnational systems of inter-governmen tal financial relations, and trying toimp rove the pred ictability and transp arency of these systems for themu nicipal institutions who were sup posed to be the recipients of nationalor federal assistance. If it was d ifficult to raise question s abou t the justiceof building codes w hich discriminated against the poor, it turn ed ou t thatinquiring abou t the logic of revenu e-sharing and national grants andpaym ents to local governm ents was m uch more delicate. As noted by thethen Minister of Finance and Development of Pakistan, the late Mahbubul-Haq, a former colleague at th e World Bank an d not someone afraid of political controversy: Inter-governm ental financial relations is all abou tpolitics. It is the essence of governm ent. The Bank shou ld stay aw ay fromthis su bject. (25)

Indeed , revenue-sharing formu lae between levels of governm ent weredetermined both by constitutional arrangements which establishedgovernment itself and by unending political negotiations between insti-tutional levels and constituencies. Whereas in the OECD coun tries, sub-national governm ent expend itures typically accoun ted for 20 per cent of GDP, the average for most low- and mid dle-income countr ies is only 6 percent. (26) Local and p rovincial governments were backwaters, with the bestand the brightest having gone on to n ational jobs or to the p rivate sectorin the capital cities. Their only assured source of power was the annualallocation of revenue to be u sed to finance provincial and mu nicipal serv-ices in ways which would m aintain political pow er and p osition.

How ever, just as it was d ifficult to supp ort su ccessful p rojects in contra-dictory policy environm ents, it was equally risky to develop a mun icipalinvestment programme in a city whose annual revenue allocations wereun pred ictable and frequen tly tied to programm es of little relevance to theurban poor. Addressing inter-governm ental financial relations, despiteMahbub ul Haq s w arnings, w as an essential feature of d eveloping effec-tive urban assistance programmes.

Developing metropoli tan f rameworks . If mun icipal development andinter-governmental finance were fraught with problems, many of thesewere compoun ded at the metrop olitan level. Most cities were expan d ingbeyond their physical boundaries and municipal jurisdictions GreaterSo Pau lo is now 75 miles across. Central mu nicipalities were facingincreasing p ressures on th eir bud gets, often in coun tries facing severenational fiscal crises, and the last thing th ey wished to d o was to coordi-nate their activities with new jurisdictions on their peripheries wh ich werealready comp eting with th em for scarce investments and revenu es. Yetsome city officials recognized that environm ental p roblems such aspolluted a ir and water or increasing qu antities of solid w aste did n ot stopat mu nicipal boundar ies. Moreover, needed investments in infrastructure


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25. Personalcommu nication inIslam abad , October 1986.

26. Dillinger, William(1994), Better Urban Services ,the World Bank,Washington DC.


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netw orks in transp ortat ion, w ater supp ly, sanitat ion and dr ainagerequired metrop olitan frameworks if they w ere to be effective.

These problems were also increasingly complicated due to th e actualdynam ics of city growth them selves. Subu rbanizing ind ustrial activities,pattern s of informal sector trade, growing mobility of persons and goodswithin and between jur isdictions, as well as the full range of social prob-lems of un emp loyment, del inquen cy, petty crime, dr ugs and gangviolence all underlined the need for a broad spatial and jurisdictionalpersp ective of metropolitan life. Yet cities foun d that designing a m etro-politan institutional framew ork w as an almost imp ossible political exer-cise. The m ore than 20 mu nicipa lities in the m etropolitan area of BuenosAires with more th an 11 million peop le are unable to use the m word , for a long list of historical reasons most of wh ich are political. Thecity of Buenos Aires and the p rovince of Buenos Aires have been under thecontrol of different p olitical parties for the last two decades, and political imperatives make them blind to the myriad reasons why they need towork together. (27) Inquiries by th e World Bank, th e Inter American Bank,the US Agency for International Developm ent and the UNDP concerningthe need for metropolitan assistance in Buenos Aires has fallen on deaf ears for m ore than tw o d ecades.

Not all situations have proven so intractable. Metropolitan Manila,with 12 municipalities in the Greater Manila Area, now home to over 8million p eople, began a process of institutional reform in the 1980s toimprove sectoral coordination. A metropolitan commissioner w as respon-sible for keeping tr ack of various local and metrop olitan-wid e initiatives.One institutional outcome was the creation of the Manila MetropolitanWater Sup ply and Sewerage Board which has coordinated activities andinvestments in these sectors. Similar efforts were tried in tran sportation,with less success. The Filipinos w ere so clear about the need for a metro-politan institutional comm itment that they amend ed the national consti-tution to ensure legal and constitutional au thority for these reforms. Thisprocess of metropolitan strengthening was helped by formal and infor-mal World Bank assistance over a decade.

Othe r As ian examples have demon s t ra t ed a wid e spect rum of options. (28) Metropolitan development in Ind ia has been an anom aly in theotherwise anti-urban development policy of the federal government. Fourmetropolitan d evelopm ent au thorities w ere established in the 1970s inCalcutta, Bombay, Madras and Delhi. The Indian Planning Com mission,the main d evelopm ent plann ing institution in the country, was longimpressed by the pred ominance of rura l pop ula t ion in the Indianeconomy and adopted a wide range of strategies affecting employment,indu stry, taxation an d patterns of urban investment w hich sought tocounter-balance urban growth . Yet India n evertheless experimented withcoordinated metropolitan investment p olicy through m etropolitan d evel-opment authorities. These have not escaped the common conflicts withmu nicipal adm inistrations bu t they recognized the n eed for broaderspatial and jur isdictional perspectives. In th e first three cities, these metro-politan institutions h ave been respon sible for m anaging World Bank financial assistance as part of their overall investment resources and havegenerally received high marks for th eir efficacy.

One interesting experiment in this framework took place in Calcutta,where the government of West Bengal wanted to provide infrastructureinvestment to th e 36 municipalities surroun ding the m un icipality of Calcut ta itself. Officials decided to u se a mechan ism m uch like the


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27. Cohen, Michael an dDario Debowicz (1999),The five cities of Buen osAires: an essay on p overtyand inequality in urban

Argentina , InternationalCenter for Advan cedStudies, New York University, March 2000.

28. A rich su rvey of metropolitan developm entin Asia is bySivaramakrishnan K C andLeslie Green (1986),

Metropolitan Management:The Asian Experience ,Oxford University Press,New York.


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successful program me d eveloped in Par ana in Brazil: mu nicipa litieswou ld be given investment allocations for the first year, with subsequ enttranches of resources being dependent on municipal capacity to operateand mainta in the facilities created in th e first year an d on increases incollection of mu nicipal revenu e. Not all of the 36 mun icipalities were ableto take adv antage of this program me bu t 27 were successful. The govern -ment of West Bengal was pleased that a system of incentives had encour-aged imp rovemen ts in some of the local jur isdict ions, al l the t imeworrying that those municipalities which had been unable to improveneeded to be assured that they would receive funds sufficient to ensurebasic needs. (29)

In Francophone Africa, following on French u rban reforms in th e early1980s, the governm ents of C te d Ivoire, Senegal and Zaire (now Repub-lic of Congo) all created metropolitan governments which consisted of mu nicipalities or comm un es in Abidjan, Dakar and Kinshasa. These insti-tutional changes encouraged greater d ecentralization of decision m akingin Abidjan an d Dakar an d set the stage for lively local politics at thecommu ne level. None of these units, however, had su fficient bu dgetaryresources to undertake investments or p rovide m any services but they d idoffer the promise of decentralized man agement. (30)

Municipal strengthening through decentralized reform . Almost allmunicipalities suffered from specific problems of financial and technicalcapacity, regardless of size and location. Their financial problems resultednot only from their dep end ence on higher levels of governm ent bu t alsofrom their inadequ ately trained p ersonnel, wh o neither knew how toman age complicated issues of urban finance at the p olicy level nor howto manage revenue and expend iture on a d aily basis.

This began to change significantly in the late 1970s and well into the1980s, through what Tim Cam pbell has called a qu iet revolution withreference to the experience of decentra lization in Latin Amer ica. (31) Thereturn to democracy in m any Latin American coun tries, experiments w ithmu lti-party states in some African countries and , later, the collapse of theSoviet Union and th e creation of many n ew ind epend ent states in EasternEurope and Central Asia all contributed to greater opening up of politicaland administrative systems. While this process was welcomed by manycities and town s, there w ere two major related issues: first, rising expec-tations for u rban government and second, the n ow evident w eakness of these same institutions. In some cases, national governments delegatedor devolved pow ers and responsibilities to local governm ents as a way of shed d ing f inancia l obl iga t ions . The term u n f u n d e d m a n d a t es ,borrowed from the reaction of state governments in the United States tothe revenu e-sharing p rogramm es of the 1980s and thereafter, becamecomm on elsewhere. Local governments w ere no longer d epend ent oncapricious revenue-sharing behaviour by national government officialsbut neither did they have the capacity to raise the revenues needed tofinance their own programmes.

International urban assistance sough t to help local governments bu ildthat capacity, both on the financial and technical sides. The World Bank sup ported man y stud ies of mun icipal finance. These generally concludedthat, wh ile sales and income tax revenues continued to be almost w ithoutexception national revenues, local governm ents did h ave the mandate totax local property. This resulted in detailed work throughout the 1980sand early 1990s on the p otentials and obstacles of prop erty taxation. (32)

The problem w ith prop erty taxes, how ever, was th at their collection


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29. This programm e wa sincluded the Third CalcuttaUrban Developm entProject, assisted by theWorld Bank.

30. Attah i, Koffi (2000),

Metropolitan governancein West Africa: the cases of the m etropolises of Abidjan,Dakar, Douala, Bam ako,and Ouagadougou ,Bureau National d'EtudesTechniques et d eDveloppement, Abidjan.

31. Campbell, Tim (1998),

The Quiet Revolution: The Rise of Political Participationand Local Government with

Decentralization in Latin A merica and the Caribbean ,World Bank, WashingtonDC

32. See, for example, thework of Dillinger, William(1992), Urban PropertyTaxation , World Bank,Washington DC.


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dep end ed on a complicated set of prior steps, nam ely, land registration,boundary setting, valuation studies and then collection itself. Manyargued that the costs of these steps m ade p roperty tax adm inistrationproh ibitively expensive for cities in low -income countries. Nevertheless,many cities saw no alternat ive. During the 1980s, the World Bank a lonefinan ced the establishm ent of urban land registration systems in morethan 33 countries. (33) This effort was complemented by assistance fromthe French governmen t and m any p rivate French supp liers of compu tertechnology as w ell as by th e (then) Office of Hou sing and Urban Devel-opm ent of the US Agency for International Developmen t. These cadas-t r a l systems were sup posed to be mad e easie r wi th the g rowingapp lication of geograp hical information system technology and comp ut-erized databases, and even specific software developed for municipalmanagement.

But land registration alone requ ired su ch an effort in cities wh ererecords w ere either m issing or in p oor condition that there are few exam-ples of cases where assistance in land registration can be show n to h aveincreased p roperty tax revenu e. This issue w as further comp licated bydifficulties in ensu ring that cadastral systems could keep u p w ith rapid lyexpand ing city bound aries and new patterns of land occupan cy. This issueis not only the death -knell for prop erty taxation but it also has imp ortantimplications for housing where squatters require some form of securityof occupan cy or tenure to encourage their investment in hou sing andurban infrastructure. In many cities, some form of intermed iate tenure oroccup ancy perm its have been issued to cope w ith the complexity wh ichproperty taxation h as encouraged.

The attention to property taxation by the international agencies and thesubsequ ent hu ge waste of time an d financial resources to prepare for theoperation of such a system is regrettable. In oth er areas of mu nicipalfinan ce, the story is brighter. Dozens of training p rogram mes and tra ininginstitutes w ere created d ur ing the 1980s and into the 1990s to train mu nic-ipal officials in finan cial man agemen t, particularly in bu dg etary an dproject management. The d isturbing d iscovery in the 1970s that m ost cityofficials had n o idea even how to read a bu dgetary table or evaluate thecosts of their investment projects became painfully evident later in the1980s at the municipal level. (34) Decentralization h ad been d ecreed; nowwas the time to learn how to m anage m oney. One of the largest effortswas initiated in Calcutta, with th e creation of an Institute of Local Govern-men t and Urban Stud ies which sough t to train 10,000 officials du ring afive-year p eriod starting in the ear ly 1990s.

A second broad area for mu nicipal aid was in strengthening the non-financial techn ical capacity of mu nicipal em ployees to opera te and main-tain m un icipal services. Some of these systems were critical for bothhealth and environmental quality. One particularly important service,garbage collection, actually accoun ted for about 50 per cent of mu nicipalexpend iture in m any cities, yet these program mes w ere inefficient an d, asin man y cities in high-income countries, notoriously corrup t. (35) Thisrecognition led to financing of garbage collection an d d isposal, includ inggarbage t ru cks , in d ozens o f c i t ie s such as Accra , Dakar, Lagos ,Ouagad ougou , Dhaka and the cities of northern Mexico du ring the 1980sand 1990s.

Strengthen ing management of municipal i nfrastructure . An espe-cially imp ortant m un icipal responsibility in many cities was the manage-ment of infrastructure such as water supply, sanitation, drainage, roads


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33. Bernstein, Janis (1988),

Urban Land RegistrationSystems , World Bank,Washington DC.

34. In 1979-1980, the author

taught two six-week courses on urban projectman agement, one forfrancophone African projectdirectors in Abidjan an done for anglophone Africanproject directors. On th efrancophone course, onlyone of the 33 stud ents couldcalculate projectcontingencies; on th eanglophone course, theresults were onlyma rginally better. Thestudents were responsiblefor the man agement of millions of dollars ininternational urban aid.

35. Bartone, Car l, L Leite, TTriche and R Schertenleib(1991), Private sectorparticipation in m unicipalsolid waste serv ice:experiences in LatinAmerica, Waste Management and Research Vol 9, N o 6,pages 495-509.


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and street lights. Estimates by World Bank staff in 1990 of the value of thes tock of th is inf ras t ructure in low- and mid d le-income countr iesamou nted to rough ly US$ 3 trillion. Annual investmen t was in the orderof US$ 150 billion or 5 per cent of the stock. Any soun d ma nag er canund erstand that ensuring the p roductive operation of this stock has hu gebenefits; for example, a 5 per cent increase in benefits wou ld equ al annu alinvestment w ithout an y new finan cial costs involved either from th ebud get or from borrow ing, as well as avoiding env ironmental and socialcosts. (36) The message from these figures w as that cities needed to getmore out of what they already had before they considered new invest-ment.

These observations became the basis of an intense internal effort w ithinthe Bank to stud y urban infrastructure. This work prod uced many impor-tant a nalytical conclusions an d recomm end ations for coun tries. (37) On ewas that cities needed to devote more attention to the d emand side of infrastructure provision, giving greater p riority to the needs of users andconsumers instead of the supp ly bias of engineers and other p rovidersof infrastructure services. Interestingly, the findings of this work wereparalleled in a study by th e US National Academ y of Sciences at the sametime. (38) This work also explored how other institutional arrangementscould be d esigned to improve infrastructure managem ent, (39) suggestingthat a ran ge of privatization approaches was available.

IV. ADDITIONAL DILEMMAS

a. Introduction

IN ADDITION TO these six institutional arenas, four dilemmas formimportant building blocks in this discussion. These are the frequentlystated (false) choice between reducing poverty and strengthening insti-tutions; institutional comp lexity through wh at was called the ChristmasTree debate; the distinction between investment and man agement; andthe qu estion of u rban land reform. Together, these issues help to fur therclarify th e essential dilemma of the m etropolitan p roject.

b. Reducing Poverty versus Strengthening Institutions

All of the efforts of the 1980s were intend ed to contribute to bu ilding insti-tutional capacity in cities. This capacity was needed if the cities were toprovide th e policy gu idance, finance, managemen t and provision of needed services for growing n um bers of poor urban households. Ind eed,the p rimary rationale for this institutional effort was to create the capac-ity to alleviate pov erty.

Yet, for reason s wh ich are not clear, some observer s of urban aid beganto argue in the late 1980s that th e Bank, and to some extent the other donoragencies, had shif ted their focus aw ay from p overty redu ction an dtowards management. This was clearly a false dichotomy even if Bank staff and others appeared to shift their focus from designing low-costhou sing schemes tow ards improving mu nicipal revenue collection. If some staff and some observers understood this work as primarily beingabout mu nicipal management, they had failed to u nd erstand how policyobjectives had remained the same bu t that a new, more p romising set of instrum ents and app roaches had been identified.


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36. Cohen, Michael (1998),Stock and flow inmetropolitan

management , The Brookings Review ,Washington DC.

37. World Bank (1994),World Development Report 1994: Infrastructure for

Development , OxfordUniversity Press, Oxfordand New York.

38. US National Academ yof Science, Committee onInfrastructure (1993), In

our own backyard ,Washington DC.

39. Kessides, Christine(1993), Institutionaloptions for the provision of infrastructure , World Bank Discussion Pap er 213,Washington DC.


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c. Institutional Complexity: the Christmas Tree Debate

A review of urban op erations by the Bank s project d irector for the SouthAsia region conclud ed th at many p rojects were Christm as Tree projectswith m any bright lights and fragile comp onents resembling Christmasdecorations. At that tim e, the Bank was hav ing considerable d ifficultiesadvancing the third Integrated Urban Development project for Calcuttabecause of dispu tes with the governm ent of West Bengal and the Ind ianfederal governm ent. This review argu ed that m ulti-sectoral projects weretoo comp lex and d ifficult to imp lement for urban implementing agenciesin India and too expensive in staff time for Bank staff to keep track of.Single sector investm ents, such as water su pp ly or sanitation, werepreferred because they were more man ageable and more easily und er-stood. The image of a Christmas tree p roject became an icon in th e debateover m ulti-sector versu s single sector investm ents.

While the review m ay have been correct in term s of the complexity of the Bank s man agement of its lending p ortfolio, it denied the essentialmu lti-sectoral character of cities and balanced u rban developm ent. It waswron g to advise city governments to invest in one sector withou t payingattention to the others, and par ticularly to the p ossible externalities of projects. This kind of thinking d irectly related to th e generally agreedinadequacy of the Bank s attention to the env ironmental consequences of its assistance un til the late 1980s and beyond . (40) Moreover, investm ents inone sector failed to p romote a broader set of mu ltipliers wh ich couldcreate need ed jobs and incomes in the city as a w hole. This issue is criti-cal because, by limiting th e complexity of investment packages for inter-nal bu reaucratic reasons, the form of assistance unn ecessarily became adevelopment fact wh ich d istorted balanced u rban d evelopment debatesin many cities. The supp ly biases of the donors and lend ing agenciesproved to be as arbitrary as th e local political and institutional environ-ments in the coun tries in wh ich the agencies tried to w ork.

d. Investment versus Management

Another important design dilemm a arose in th e attempt to find a reason-able balance between investment and management of local institutions.On the on e hand , the needs of growing city pop ulations w ere enormou sand largely un met. Investing in urban infrastructure and creating newneighbourhoods m ade sense and wou ld c lear ly have h igh ra tes of econom ic and finan cial return. The constraint on investment w as notmoney bu t the ability of local institutions to use th e fund s effectively. Thisled to a view that the management of local institutions needed to be rein-forced before increasing investm ent. If this position w as just ified, itoutraged man y officials in low- and mid dle-income countries whobelieved that if they had the funds, they would have the justification tostrengthen institutions, including gaining the necessary autonomy forlocal authorities from n ational governments.

Find ing the b est app roach to increasing th e scale of ur ban services,pa rticularly to the poor, was a challenge withou t a single correct answer.Some observers pointed to the success of the Kampu ng Imp rovementProgram me in Jakarta a s an examp le of finally attaining scale in urbanservice delivery but others pointed to the lack of direct cost recoverythrough user charges from p articipating hou seholds. Hen ce, urban serv-ices were really being subsidized by general taxation. This was accept-


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40. See, for exam ple, thecritiques of Bank op erationsby Herm an Daly inCau lfield (1996), seereference 10, page 223.


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able to the governm ent of Indonesia and the city governm ent of Jakarta,both of wh om argu ed that this was ap prop riate for the Indonesiancontext and th at the country h ad both the financial resources and themora l obl iga t ion to fun d services for the poor. This pos i t ion w ascompletely un realistic in ma ny cities in poor countr ies becau se thenational level was in n o p osition to subsidize these program mes w ithinind ividu al cities, and local institutions w ere not collecting local taxes tosupp ort such p rogramm es.

e. Urban Land Reform

A fourth d imension of add ressing the main m etropolitan p roblems isurban land reform which is, of course, political, as illustrated by theWorld Bank activities in Mad ras. With more th an 4 million inhabitants bythe late 1970s, Madras h ad more than 200 slum areas housing almost half the p opu lat ion. The state government of Tamil Nad u had created aMadras Metropolitan Development Authority to develop a strategy andinvestment program me for the city. The Authority began d iscussions withthe World Bank in the m id 1970s, and by 1977 had signed an agreementfor the first p hase of a m ulti-sectoral progr amm e, including sites-and-services, slum up grad ing, supp ort for small enterprises, construction of aring-road an d th e pu rchase of new bu ses. Preparations for a second phasebegan in 1978, including a d ramatic expansion of the slum improvementprogramme.

But this second project faced a serious policy obstacle. Expansion of theslum improvement programm e meant that government had to expropri-ate slum s on private land and that slum dw ellers had to be granted someform of legal occupancy. This was requ ired to m ake the pro ject s infra-structure investments legal and to reassure slum d wellers that theirinvestments in their own m odest dw ellings wou ld not be bulldozed inthe futu re. (The official nam e of the agency working on slum s in Madrasin the 1970s was, ominou sly, the Slum Clearance Board .)

Convincing the Tamil Nadu state government to grant tenu re to slumdwellers seemed impossible. Middle-level bureaucrats in the city andstate governments saw no prospect of urban land expropriation beingcondoned by the state s political leaders. Finally, after the p roject packagewas assembled an d th e loan size determined , the author, as team leader,met w ith the chief minister of the state, M G Ramachandr an, in late 1979.He w as one of the m ost pop ular stars of the large Ind ian film ind ustry.Sitting in a da rk room , wearing d ark glasses, he listened patiently toexplanations of the project and the need to grant tenu re to slum dw ellers.The room fell silent u ntil, suddenly, he smiled and asked, in Tamil, Don tthese peop le vote? The answer w as yes. He then smiled again and said,What s the problem, they will vote for me. (41) Urban land reform hadbeen app roved.

This proved to be one of the easiest and most su ccessful p olicy negoti-ations on th is difficult issue. Not on ly were slum improvement projectsdirect threats to pr ivate land own ers, who frequently did not receiveadequate compensation for their land from their respective city govern-ments, but these projects were seen as legitimating th e rights of the poorto secur ity and a place in the city. Critics argued that th e poor w ould notpay for the costs of slum im provem ents. In the case of Madras, they wereproved wron g. By the mid 1980s, 99 per cent of the p articipating h ouse-holds were meeting their month ly paymen ts on a regular basis. (42)


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41. This meeting took p lacein Governm ent House inOctober 1978. The authorparticipated in the briefingof the Chief Minister.

42. World Bank d ocum ents.


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V. METROPOLITAN PROCESSES: WORKING WITHIN A WORLD OF DIFFERENCES

INCREASINGLY, THE METROPOLITAN areas of the world are m arkedby d ifferences: d ifferences in access by ind ividu als, hou sehold s andcommunities to services, resources, opportu nities and , most of all, qualityof life. Most cities in low- and mid dle-income countr ies and m any in high-income coun tries are experiencing deepen ing and cum ulative patterns of inequality. If you are a black male in Washington DC, your life expectancyis 14 years less than you r w hite neighbour in northern Virginia. (43) Astud y of children in N ew York conclud es that geography is destiny ;cumu lative d ifferences in p ersonal, family and neighbourh ood charac-teristics determine futu re opp ortun ity. (44) In cent ral Buenos Aires, 11.5 percent of the p opu lation received 68 per cent of public investment in infra-stru cture an d social services between 1991 and 1997. (45) These patterns arenot static. During the 1990s, the bottom 80 per cent of New York s popu-lation lost real income. (46) How are these patterns related to the formationof metropolitan areas an d to the metrop olitan project itself?

Recent studies in the United States suggest some provocative categoriesfor analyzing metropolitan p rocesses for instance, the stud y of metro-politan Ch icago w hich highlights fragmentation, d ifferentiation, growinginequalities, poverty concentrations, decentralization, polarization andwh at the auth or refers to as a spatial mismatch , whereby problems arelocated in spa tial areas or jur isdictions lacking the resources to ad dressthem. (47) The study also shows how th ese processes are mu tually interac-tive and can reinforce one another. A study of 100 US cities provid es someof the first rigorous econometric analyses of these processes, (48) showingthat labour, hou sing and m ortgage markets respond to changes in crime,school dropouts and female-headed households. This in turn affects themetropolitan opportunity structure because these elements are mutuallyinteractive. Differences deepen over time. This is also evident in a stud yof Latin America which shows that, historically, macro-econom ic grow thhas had a d isproport ionately strong impact on u rban p overty, withpoverty increasing m ore deeply d uring p eriods of recession and beingslower to decrease when growth resumes. (49) The cumu lative causationmod el prop osed in the US 100-city stud y shows the mechanisms by whichthis happens.

Some broad general conclusions regard ing m etropolitan societies overtime can be suggested from these and oth er stud ies: Some aspects of the d iversity of large cities, wh ich contribute to their

economic and cultural vitality, can also undermine social cohesion,econom ic prod uctivity a nd , eventu ally, future social mobility a ndopportunity.

There is a grow ing tension between th e prom ise of metropolitan growthin econom ic terms, both at the urban and n ational levels, and grow ingeconom ic and social differences between individuals, household s andcomm unities within them.

Short-term economic differences are becoming structural in the sensethat th ey are reflected in p atterns of residen tial investment and n eigh-bourhood quality of life. Spatial and ph ysical differences in tu rn d eepensocial and economic differences and inequalities, giving rise to p olar-ization within the popu lation.

These structural differences are reflected in radically different percep-tions of politics and social ju stice across neighb ou rhood s and , not


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43. Collins, Chuck andFelice Yeskel (2000),

Economic A partheid in America,: A Primer on

Economic Inequality and Insecurity , The New Press,New York.

44. Citizens s Comm itteefor Children of New York (1999), Tracking N ew York sChildren , New York.

45. See reference 27.

46. Parrott, James, AliceMeaker and ZofiaNowakowski (1999), The

State of Working New York:the Illusion of Prosperity: NewYork in the New Economy ,Fiscal Policy Institute, NewYork.

47. Orfield, Myron (1998), Metropolitics , The BrookingsInstitution, Washington DC.His book demonstrateshow these processes haveworked in Chicago andinclud es extraordinarymaps to illustrate the rich

data on the differenceswh ich have been created.

48. Galster, George (1998),An econometric model of the urban opportunitystructure: cumu lativecausation among citymarkets, social problemsand underserved areas ,The Fannie MaeFoundation, WashingtonDC, September.

49. Morley, Samuel (1998),The Impact of the

Macroeconomic Environment on Urban Poverty, UNEconom ic Commission forLatin Amer ica, Santiago.


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surp risingly, give rise to w hat are politely called an tisocial behaviours for instan ce, the stoning of cars driving on the autopista in Buen osAires by residents of the neighbouring villas miserias . Another m oreconstructive reaction was the turning inward of residents of favelas inRio to strengthen n eighbourhood organ ization an d qua lity of life.

These inw ard-looking behaviours a re occur ring at all income levels, aswitnessed by th e rise of gated comm un ities in both rich and poor coun-tries. These gated or fortress communities (50) are pow erful testimoniesto the intend ed exclusion of people.

While these pattern s are proliferating, their imp acts on econom icprod uctivity and social cohesion are receiving u neven a ttention. On theone han d, much attention is paid to declining crime rates in New York and to the consequent su rge in tourism and hence employment. So-called zero-tolerance app roaches are being transferred from N ewYork to oth er cities, recently even to Amsterd am wh ich h ard ly hascompar able problems. But in reality, growing inequality is generallyperceived as a necessary evil in the face of globalized economic compe-tition. Local governm ents p erceive man y of the pattern s describedabove as beyond their control; one local reaction w as resignation to theloss of local power and also a giving up of local responsibility. Relativelylittle attention has been d evoted to u rban social policy.

The breakd own in metropolitan areas erodes responsibility and thecapacity to m anage th e ph ysical landscape of cities. Not on ly are theremajor issues of the absolute levels of consumption of natural resourceswithin metropolitan areas witness the growing dramas concerningwater su pp ly in cities such as Beijing or Los Angeles but also who w illhave access to natu ral resources, includ ing public space. The m arginalcost of water is increasing in every city in the w orld. Indeed, hu maninteraction with the environmen t itself is increasingly un derstood as thecause of man y natural disasters. (51)This paper has discussed the difficulties of achieving effective metro-

politan governance by telling some of the urban assistance stories. Thecomplexities of metropolitan areas are dau nting in them selves but th edilemmas involved in building needed institutional and policy frame-works present further complexities. The record of metropolitan institu-tion-building is not promising. Instead of purposeful actions creatingcentripetal m etropolitan forces to reinforce collective p roblem-solving, theopp osite seems to being taking p lace. Cumu lative p rocesses of decentral-ization, fragmentat ion, differentiation and eventual social and economicpolarization in cities such as Abidjan, Buenos Aires or Manila seem to bepulling institutions apart.

One key challenge for metropolitan areas is political leadership . If polit-ical leaders can pu t across in w ords and action that the d iverse mem bersof the metropolitan comm un ity have shared interests, there are possibili-ties for shared futu res. If not, the tend encies toward s fragmentation andpolarization w ill grow an d become reflected in ph ysical and spatial struc-tures. In tu rn, this w ill reinforce differences wh ich w ill be beyond thepow er of pu blic policy to change.

If the d ifferences foun d in the m etropolis are what make it attractiveand prod uctive, these d ifferences must also be explicitly m anaged toavoid th eir becoming chronic problems lead ing to m etropolitan collapse.Here, the excesses of the attraction of a collapsing Calcutta d ur ing the1940s and 1950s or a h eavily congested Bangkok in the 1990s suggest tha tvigilance is necessary to avoid creating urban n ightmares or the clich s


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50. Blakely, Edward andMary Gail Snyd er (1997),Fortress A merica: Gated Communities in the United States , The BrookingsInstitution, Washington DC.

51. A history of managingthe land scape of LosAngeles demonstrates how

metropolitan vulnerabilityto fires, droughts and evenearthquakes is anotheraspect of this equationwh ich deserves attention.Davis, Mike (1998), T he

Ecology of Fear ,Metropolitan Books, HenryHolt and Com pany, NewYork.


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of urban d oom which have been evoked in earlier periods. (52)But what values should guide policy and vigilance? Perhaps the first

step is to asser t local social responsibility. The forces affecting metropoli-tan growth are not beyond the effective control of political leaders. Thetools of residential integration, service delivery, and land use are notd eterm ined in the far aw ay financial centres of New York or Tokyo;rather,they are m ostly local. Building codes, methods of school finance,training and management of green spaces are not to be found on the Inter-net; they are the responsibility of local governments and local leaders.While the challenges are d ifficult, they are n ot imp ossible. Rather, theyrequire building p ublic sup por t in constructing a futu re in w hich differ-ences once again become strengths and not w eaknesses.

Here, the experience of international urban assistance may be helpful.This has show n that even in v ery difficult environm ents, includ ingextreme econom ic scarcity an d institutional w eakness, it is possible toachieve material improvements in the quality of people s lives throughph ysical imp rovements in infrastructure and h ousing. The metropolitanproject , wh ile frequently un derstood in institutional and cu ltural terms,shou ld also include a p hysical project.

One physical d imension of metrop olitan areas can be seen through thehou sing lens. During th e 1990s, attention to hou sing shifted from a focuson p rojects, and even public policies, towards understand ing the perform-ance of the hou sing sector an d, in par ticular, housing m arkets. This shiftrepresented a long-overdu e recognition th at ind ividu al projects wou ldnot, by them selves, solve the u rban h ousing problem. Ind ividu al proj-ects were projectizing the city , introducing a n ew set of artificial differ-ences in h ousing q uality, density, infrastru cture stand ards and socialservices between neighbou rhood s and areas within cities. (53)

While these p rojects were frequently p hysically successful, d emon -strating that upgrad ing could work in Karachi or Madras, they were lesssuccessful in institutional terms. Some of their assumptions made littlesense wh en considered for the city as a w hole, for examp le, charging thepoor for infrastructure when the midd le- and up per-income people in thesame city continued to receive large subsidies. Most imp ortantly, even inthe largest scale program mes such as those in Ind onesia, they were unableto m eet a large share of overall deman d. The p rojects failed w hat I calledin 1983, the challenge of replicability. (54)

VI. BEYOND ASPATIAL DECISION-MAKING

WH ILE EXPAN DING THE hou sing p olicy d ebate ha s been u seful, insome respects it has been disastrous because it also broke many impor-tant linkages with oth er key aspects of urban d evelopment. The focus onmarkets meant, for example, that location, urban form and spatial patternsw ere no longer p erceived as central to ur ban p olicy d ecisions. If themacro-econom ists were thinking aspatially , then the hou sing econo-mists and u rban d ecision makers seemed to be following th is dangerousprecedent at the city level.

The imp lications of this aspatialization or dematerialization of thecity cannot be over-estimated. Without location, it became impossible toun derstan d that on e of the key attributes of housing is accessibility towork and services. Decisions on location p recede d ecisions on area andplot size. In cities, we all trad e off space for location. The number and size


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52. Glass, Ruth (1989),Clich s of Urban Doom,Blackwell, London .


54. See reference 22, Cohen(1983).


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of rooms m ay be importan t, but even these are evaluated in the context of location; downtown, in the first ring suburbs or at the end of the bus orsubw ay lines. Withou t location, housing inv estment d ecisions becameseparated from transport and any p ossibility of linkages with integratedland use p lanning and location of emp loyment. Ind ustrial location wasleft to pr ivate market d ecisions w ith the imp ression that the d ark forcesof globalization were land ing at secretly chosen locations and establishingfactories or shop ping malls. This separation led to less attention to issuesof residen tial density and , ominou sly, to the acceptance of defeat in thebattle to somehow connect transport p lanning with a reduction in thedistance between residence and w ork. In th e city, laissez-faire means giveup and suffer the consequen ces.

Hou sing withou t attention to location is also an invitation to ignorelinkages w ith the d esign, operations, financing and man agement of infra-structure such as water su pp ly, sanitation, pu blic parks and social serv-ices. Given the supp ly biases foun d in infrastructure performance in bothrich and poor countries (55), and the resu lting often inefficient pa tterns of infrastructure investm ent and service prov ision, the role of user orconsumer preferences in the form of demand for services is critical. It isalso critical to assu re some real accoun tability for th e managers of priva-tized u rban infrastructure. To p lace hou sing d ecisions w ithin a m arketframew ork without p aying attention to the costs and externalities of infra-structure is to severely u nd ermine th e p ossibilities of prod uctivity of investment in cities: the p rodu ctivity of labour, land and capital.

The weakn ess of separating hou sing from infrastructure is, of course,most obvious when one considers the impacts of residential settlementon the natu ral environm ent and landscape. The case of Buenos Aires illus-trates this point: from 1928 to 1985, the city exper ienced on e flood everyseven years; since 1985, it has experienced seven floods in the metrop oli-tan area every year. (56) Residential settlemen t and land use withou t atten-tion to landscape and the natural environment can be disastrous, withhu ge econom ic and financial costs. And lest there be any mistake aboutthis issue, single sector actions can easily be th e basis of what used to becalled natural disasters but are now und erstood as having a hum an origin.

A focus on hou sing in a market context can, ironically, misund erstandthe economic mu ltipliers existing w ithin cities and town s. For examp le,wh ile the emp loyment created by hou sing investment is very importantwithin the overall construction sector, that employment is only a small(and time-bound) share of the total investment in neighbourhood infra-structure, transp ort, schools, hospitals and commercial establishm entsthat is needed to serve the occupan ts of that hou sing. When p laced w ithinthe 40-year life span of the housing u nit, the jobs generated d ur ingconstruction tu rn ou t to be a small prop ortion of total direct emp loyment.It is only when h ousing is tied to spat ial decisions, in real places, in neigh-bourhoods, that these multipliers can be un derstood and app reciated. Wehave been won derfully remind ed of this point by Jane Jacobs (57) whoseexplanation celebrates the complexity of wh ole systems an d deplores themistakes mad e when only partial perspectives are adop ted in policy andaction.

These econom ic multipliers are also paralleled by cultural mu ltipliers,historical patterns of comm unication, sociability and innovation. (58) Neigh-bourh oods have identities as geograph ic and social places where par tic-ular forms of cultural expression occur. Over t ime, this expression alsohas a value which, in many cases, can also be translated into economic


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56. See work on flooding in

Buen os Aires by Herzer,Hilda (1999),Inundaciones , Faculty of Architecture, Design an dUrban Planning, Universityof Buenos A ires, July.

57. Jacobs, Jane (2000), The Nature of Economies , TheModern Library, New York.

58. As described richly bySir Peter H all in his book,Cities in Civilization,Pantheon, New York, 1999.


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and finan cial value. When one mentions Soho, St.Germain d es Pr s or LaBoca in Buenos Aires, the names of these neighbourh oods evoke recogni-tion and expectations about certain cultura l, architectur al and even, insom e cases, comm ercial style. The id entities of places are historicalconstructions th rough time. Youth in Berlin may wear Soho tee-shirts buttheir referents are clear; they are to far away n eighbourh oods w hosesymbol ic mean ing is equated wi th a n ar t i s t ic and fashion-se t t ingvanguard 10,000 kilometres away.

VII. THE PHYSICAL WORLD AND CIVIL SOCIETY

a. Connecting Housing to Social Processes

THE OVER-EMPHASIS on the role of housing as a commodity withinhou sing mar kets also runs the risk of separating th e process of creatingurban settlemen ts from civil society itself. A generation ago, John Turner,the British arch

Documents

Cohen Urban Assistance and the Material World