What are the Policy Issues

The different dimensions of poverty and their causal factors underscore the need for policy and institutional reforms at the national as well as the city level, in order to achieve sustainable and replicable improvements in the conditions facing the poor. As shown in the Understanding Different Dimensions of Poverty matrix, policy actions need to be structured to enhance the poor assets to decrease their vulnerability and capacity to manage their assets.

Policy and institutional reform include:

Land, housing and urban services. The vulnerability of the urban poor is exacerbated by the inadequate provision of basic public services, as well as by policy and regulatory frameworks that govern land and housing supply and property rights. Policy reforms are required in the areas of: tenure security, property rights and land development regulations, housing finance, service provision.  more

Financial markets.  Lack of access to credit increases the vulnerability of the urban poor by constraining their ability to improve their homes, their work, and to start new businesses. Credit underwriting is a major problem since the poor do not have property to use as collateral and often lack regular incomes. Supporting micro-finance programs and provision of tenure security to support underwriting are possible policy actions at local levels.   more

Labor markets and employment.  Employment opportunities for the urban poor are affected by diverse factors including macroeconomic conditions, regulatory constraints on small businesses, lack of access to job market opportunities, infrastructure, education and training, and bad health. A range of issues concerning labor market regulations and legislation, e.g., employment protection rules such as minimum wage, hiring and firing regulations, etc., can also have counterproductive effects on the poor by increasing labor costs and thus constraining job opportunities.  more

Social protection and social services (health, nutrition, education and security). Social insurance benefits include unemployment insurance and assistance and pensions. Safety nets/social assistance interventions include various cash and in-kind transfers programs such as child feeding, vouchers for schooling and housing, etc., that supplement income.  more

Environment.  Environmental problems exacerbate urban poverty. Poor cities and poor neighborhoods suffer disproportionately from inadequate water and sanitation facilities and indoor air pollution. Poor people are often forced to live in environmentally unsafe areas, steep hillsides and flood plains or polluted sites near solid waste dumps, open drains and sewers, and polluting industries.  more