What can national governments do for urban poverty reduction?Â
Design of a poverty reduction strategy at the national level needs to consider how urban poverty reduction can contribute to progress overall and complementarities across regions and sectors. Perceiving urban poverty reduction in a wider context and with reference to the many dimensions of poverty and its cumulative impacts (see Urban Poverty Matrix) would help national authorities to design their policies and strategies in a more effective way. Much of what has been discussed about urban policy would help other sectors to improve their poverty impact as well. To cite only a few examples: reducing the incidence of communicable diseases through better housing and infrastructure services; reducing crime and strengthening governance through community involvement in improving neighborhoods; increasing employment and savings through efficient housing markets; supporting macroeconomic stability through sound intergovernmental fiscal relations, fiscally responsible local government, and a strong urban labor market. Â Example of actions that can be taken
by national governmentsfor urban poverty reduction strategies  Policy-Level Decisions | Develop urban poverty alleviation strategies/measures as a component of macroeconomic and social development plans and sectoral policies. Develop instruments to help local governments respond to the demands placed on them in alleviating poverty at the local level (e.g., through fiscal transfers, matching grants, etc.). Ensure stability in revenue sharing with local authorities. Synchronize the elements of decentralization, e.g., balancing the transfer of decision-making as well as revenue generation authorities to local authorities. Take actions against corruption by supporting privatization of service provision, ensuring transparency and accountability. Design policies to remove distortions in labor markets and disincentives to hiring of low-income workers. Support equal opportunities and policies against discrimination against gender, ethnic origin, etc. Remove constraints on sectors with high employment generation capacities, e.g., housing construction. Design policies and support actions to remove bottlenecks in supply of developed land. Provide local authorities with freedom to establish land use and zoning regulations. Support tenure regularization and transferable property rights. Ensure political and economic stability.
| Programmatic Innovations | Initiate and promote national programs, for example, in Indonesia, national government support for the Kampung Improvement (slum upgrading). Central government support is one of the underlying factors of the program's success and replicability. Promote micro enterprises by encouraging financial organizations to lend to them and making funds available as seed funding or guarantees to facilitate resource mobilization. Transfer/sell unoccupied government land (treasury land) to local authorities to help them in their poverty reduction strategies.
| Regulatory framework | Identify/diagnose national policy impediments to improving the living conditions of the urban poor in major sectors, e.g., land, housing, infrastructure, health, education, labor markets. Liberalize interest rates to facilitate operations and cost recovery of microfinance organizations. Develop simplified and appropriately designed taxation policies for small businesses, banks, and financial institutions. Accept paralegal practices to facilitate collateral and credit underwriting for SMEs. Establish standards of public accountability for local authorities (e.g., municipal auditing requirements). Clarify responsibilities between different levels of government agencies Make worker protection measures and social benefits affordable and accessible to low-income groups; reduce barriers to the inclusion of informal-sector workers.
| Monitoring and coordination | Support and monitor poverty outcomes in cities through national agencies, e.g., statistics institutes, based on agreements with local authorities on appropriate and realistic benchmarks. Coordinate intercity efforts at sectoral level. Support training and dissemination of municipal experiences, e.g., through national associations of local authorities. Foster intermunicipal cooperation.
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 Source: Urban Poverty Chapter of PRSP Sourcebook.    Back to top
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