The Economics of Slums in the Developing World

Benjamin Marx, Thomas Stoker and Tavneet Suri

Journal of Economic Perspectives, 2013, vol. 27, issue 4, 187-210

Abstract: The global expansion of urban slums poses questions for economic research as well as problems for policymakers. We provide evidence that the type of poverty observed in contemporary slums of the developing world is characteristic of that described in the literature on poverty traps. We document how human capital threshold effects, investment inertia, and a "policy trap" may prevent slum dwellers from seizing economic opportunities offered by geographic proximity to the city. We test the assumptions of another theory -- that slums are a just transitory phenomenon characteristic of fastgrowing economies -- by examining the relationship between economic growth, urban growth, and slum growth in the developing world, and whether standards of living of slum dwellers are improving over time, both within slums and across generations. Finally, we discuss why standard policy approaches have often failed to mitigate the expansion of slums in the developing world. Our aim is to inform public debate on the essential issues posed by slums in the developing world.

JEL-codes: I32 I38 O15 O18 R11 R23 R58 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/jep.27.4.187
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (131)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jep.27.4.187 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:27:y:2013:i:4:p:187-210

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().