The World Bank is moving away from an idea of poverty reduction that focuses on income levels towards an approach that means poor people can make the most of their capabilities. There is, however, little evidence that this has been put into practice in World Bank projects aimed at reducing urban poverty.

Governments and international donors such as the World Bank have long held that poverty is due to a failure to enable market forces. Planners believed that integrating the so-called informal sector into the formal sector through policies encouraging competition, and providing access to credit and technical assistance, was the solution to urban poverty.

By the end of the 1990s, the World Bank had accepted the failures of such strategies. Policy documents indicate that the World Bank now views poverty as a deprivation of basic capabilities rather than simply low incomes. Development, as Amartya Sen suggests in his ‘capability approach’, comes about when people are free to exercise their capabilities. A paper in the Journal of Human Development evaluates the World Bank’s interpretation of Amartya Sen’s ‘development as freedom’ in light of a typical squatter upgrading project in Salvador da Bahia, Brazil.

The world’s squatter settlement population of one billion represents a major challenge for developing country cities. A policy shift at the World Bank is therefore likely to have an influence on programmes aimed at squatter settlements. The author looks at to the Ribeira Azul programme in Salvador da Bahia, Brazil, which covers 135,000 squat dwellers, to consider whether the World Bank has managed to match policy with practice. The Bank sees the programme as a success, but a capability approach evaluation based on the achievement of ‘freedoms’ is more ambiguous:

• freedom to expand and individualise: dwellers have been restricted from expanding or modifying their houses, and thereby from expressing their cultural identities
• freedom to afford living costs: despite low transport costs and the use of local cooperatives for construction, dwellers have faced other costs and have not benefited from employment generation
• freedom for a healthy environment: environmental improvements have been significant, but lack of space is a major source of dissatisfaction
• freedom to participate and to maintain social networks: residents were moved close to their previous neighbours and elected councils set up, but the local community organisation has been sidelined and the largely inactive council has little power.

While the Bank’s policy language is strong on ‘freedom’, it fails to take into account the realities of urban squat dwellers, and continues to emphasise market enablement. Applying the capability approach to squatter upgrading programmes will require:

• recognising that poor people have resources and strategies to emerge from poverty
• focusing on the expansion of squat dwellers’ capabilities by removing obstacles to their expression
• recognising and maintaining the cultural identities of squat dwellers, as they are an important resource to them
• ensuring that squat dwellers have a dominant role in any upgrading project, within which the powers of pre-existing democratic organisations can be enhanced.

Source(s):
‘Amartya Sen, the World Bank, and the Redress of Urban Poverty: A Brazilian Case Study’, Journal of Human Development, Vol.8, No.1, pages 133-152, by Alexandre Apsan Frediani, 2007

Funded by: Foundation of Urban and Regional Studies (UK)

id21 Research Highlight: 14 August 2007

Further Information:
Alexandre Apsan Frediani
Department of Planning
Oxford Brookes University
Gipsy Lane Campus
Headington
Oxford OX3 0BP
UK

Tel: +44 (0)1865 483400
Fax: +44 (0)1865 483559
Contact the contributor: afrediani@brookes.ac.uk

Department of Planning, Oxford Brookes University, UK

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World Bank Urban Poverty Pages

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