Leuven and Brussels, Belgium, 23-26 May 2001
COPING WITH INFORMALITY AND ILLEGALITY
IN HUMAN SETTLEMENTS IN DEVELOPING CITIES
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ESF/N-AERUS International Workshop Leuven and Brussels, Belgium, 23-26 May 2001
COPING WITH INFORMALITY AND ILLEGALITY
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| WORKSHOP: HOME PAGE - INDEX of WORKING GROUPS |
Working group 2
In towns and cities in developing countries there is a high co-incidence between areas of concentration of poverty and areas where people live in the uncertainty of informal and illegal settlement. Poverty itself is much more than low income, it is the lack of access to the basic essentials of life including shelter, health, security and a means to earn a living. Lack of security may mean initial access to housing but it also limits options for improvement. Informal services such as water supply systems may cost many times as much per litre as the piped water of the middle and upper income groups. Health is often bad due to poor nutrition, again increasing living costs. Lack of security and restrictive regulations limit possibilities to raise finance and to earn a living. Security may have to be paid for to both corrupt public sector and private sector mafia. Breaking the vicious circle between poverty and insecurity of tenure and employment is essential. To help develop more effective actions, greater clarity is needed on connections and their linkages. This raises a series of questions:
What are the impacts on the poor, positive and negative, of living and working under conditions of informality or illegality? What evidence do we have to this?
Which comes first, poverty or insecurity?
Do the poor concentrate in areas of uncertain tenure because they have no other choice? Do these areas become a trap which prevents escape?
What is the balance between avoidance of formal taxes and service payments, but the need to pay "informal taxes" of pay-offs and protection can be more expensive? Does the lack of rights and access to municipal services increase costs significantly to the poor?
What are the most effective means related to formality and legality of breaking the vicious circle and trying to develop positive synergies of development?
What are the implications for urban development policy of conclusions ?
What are the implications for practice? What research is still required to provide a better basis for improved policy and practice?
From the start the term used in the title of this work group, "vicious circle" was questioned. Was the relationship between poverty and informality or illegality necessarily vicious? There can be positive aspects to this relationship. Is this relationship best described as a closed circle? There is poverty without illegality and illegality without poverty. We reject the idea that poverty can necessarily be alleviated by legalisation or formalisation. There are many other ways to approach the problem. The relationship is indirect not direct.
It was decided that we would discuss the following four questions:
1. The relationship between poverty and informality /illegality
It is very obvious that Informality and illegality can have a positive impact on poverty. They are means of helping the poor to survive, to obtain the basic needs and to begin improving their lot by access to : land, housing, jobs, services, loans. Many poor who might otherwise be excluded get the "right to the city". By these means they improve their economic situation . We discussed examples of how informal institutions overcame the deficit of the state and of the formal private sector in many of their functions. These informal institutions can secure property rights, resolve conflicts, provide education and health services as well as obtain resources and encourage collective action and the empowerment of the poor. Norms are the result of resistance and struggle (as Gus Massiah told us in his keynote presentation). In a similar vein we also saw how legality can have a negative impact. It can divide the poor, help the better off poor but leave out the poorest because they are unable to keep up regular payments; it can individualize communities and break down collective action.
On the other hand there is a negative aspect to informality/illegality. There is a cost , often a high cost. There is the economic cost of informal services, water by the bucket, the cost of transport, there are many inconveniences, and a lack of comfort. There is a high cost in the lack of security, threats of eviction, of police harassment, the threat of fires or floods with no protection . Whether it is because of where they live or because they are rural or international migrants or without papers these populations are often rejected, excluded and powerless. Most important there are often no rights for those in informal situations, no legal recourse to bad treatment or to exploitative usury and repression of all sorts by the elite or by the local leaders. Representative systems seldom identify with the concerns of those living in informal settlements.(paper no. 13) One of the most difficult things to accomplish is to help people get their rights.
In most cases there is a complex relationship between informality/illegality and poverty which is neither wholly positive or wholly negative but much more "nuanceé ". Each situation varies. From one location to another there are enormous differences in the context making it impossible to generalize. Informal housing in some parts of Africa and in Peru for instance may not be at all insecure and can be bought and sold just as formal housing is but in other places the threat of eviction is real. What is instrumental in some places is not in others.
There were many examples showing the positive and negative sides. One example of the kind of cost there is in informal/illegal settlements, is seen in the urban villages outside of Delhi. The earliest residents took over government land which they rented or sold to incoming migrants and industries without providing adequate services. The rapid growth of industries and housing both lacking proper solid and liquid waste disposal, sewers, roads etc. resulted in severe pollution problems. Thus while providing work and a place to live for the poor, but at a high - maybe exploitative - cost , this informal urbanization creats unhealthy slums and serious environmental degradation. (paper no. 3) Again in Kathmandu the lack of regulation, the small size of the subdivisions, the hands off attitude of the state may be a cause of the relatively few slums there but the absence of regulation also results in serious air pollution, frequent cuts in the provision of water, electricity and other services.(paper no. 19)
The relationship is complex and there are many reasons for this. Poverty for one is not static. The causes of poverty change over time. It is related to the macro economic situation sometimes positively but recently in times of prosperity for the rich poverty has not diminished. Poverty is not homogeneous. One can distinguish three categories of the poor:
As we saw informality and illegality effect the different of categories of the poor in different ways with the poorest being the losers.
A basic issue of poverty is security not illegality but security is not necessarily a result of legality. There are cases where the poor felt perfectly secure even in illegal housing as in Mozambique or Peru. In many other situations legalization gives security of tenure but causes individualization and diminishes collective action and the security of belonging to a group. On the other hand informality can also function better for the poorest of the poor because of its flexibility.
Legalization or regularization can be a political tool or a means of electioneering as in Peru but illegal or informal situations can also be used by politicians for electioneering. The results of attempts at regularization are not necessarily those planned as in Mauritania where in spite of having distributed more than twice the number of lots for housing than there were households yet 40% of the population are squatting and 60% live in makeshift one-room units(paper no. 32).
Informal leaders can be more effective than civil servants or elected officials in helping the poor. They can secure property rights, solve disputes, impose sanctions, collect fees but they can also act exclusively in their own interest, demand kickbacks, or take advantage of their followers by charging high fees for their services.
Social legitimacy is a concept that needs to be understood better. What is considered legitimate within a society is stronger than laws that are imposed on it.
2. What keeps the informal / illegal situation in existence? Agents and motives
The purpose of this section was to discuss the different agents that gain from keeping the status quo with regard to informality and illegality, and their different motives. Among the numerous interests in place, discussants emphasized the role of government, the local elite, and the formal private sector (businesses, factory owners, etc) in light of the different experiences documented by the conference papers. Two particular notions were emphasized:
As for the numerous motives that could explain in part the status quo, emphasis was placed on the stake that some interest groups have in maintaining informality as a cheap reproductive form and how informality benefits others by ensuring the development and persistence of clientelist / patronage relations.
Discussants used the case studies to highlight the impact of the lack of access to employment, land and services on causing and/or maintaining poverty; the effect of poverty on maintaining illegality and informality; and the processes through which informality cheapens the products (e.g. land and housing) for lower-income groups.
The limitations placed on strategies to cope with poverty gives way to what Peter Ward terms as the "new poverty." The increasing vulnerability of the poor due to the scarcity of opportunities and channels to find employment and access land reflects a change from the "resources of poverty" (in which solidarity-based coping strategies enable the poor to address problems of access to land, services, and jobs for example) to a "poverty of resources" where the inability of many lower-income households to fulfill their reciprocal obligations to their kin is increasingly causing a breakdown of collective initiatives and giving rise to individualization in the face of poverty (De la Rocha: The resources of poverty, 1994).
3. What has been thought to be instrumental to change the relationship of informality and poverty? Arguments and effects
Five key approaches to change the relationship of poverty and informality were discussed:
Despite the obvious benefits of legalization (eligibility for service delivery, removal of tenure insecurity, etc), it was noted that in many settings these benefits are not obvious, necessary, or sufficient, and that legalization in many situations often comes at a cost to many poorer households (e.g. down-raiding, taxation, etc) that need to be considered. The differences between legalization and formalization -or the imposition of some form of regulatory control without drastically altering processes of production or eliminating their competitive advantage-were discussed in light of the case studies.
Discussants agreed that enhancing the security of lower-income groups operating within informal systems should be the most important objective of initiatives aiming to change the relationship of poverty and informality and should guide policies and strategies. As such, legalization can sometimes prove to be unnecessary. Among the alternatives that were discussed are:
Discussants also focused on the following three questions:
Does legalization/regularization of illegal settlements constitute an effective means to fight poverty?
It was noted that as much as legalization brings about many benefits (the background papers argues that it allows the poor to capture the incremental value resulting from the increase in land prices; service provision also cheapens the cost of water and electric supply for the poor; etc), yet many experiences have not succeeded in achieving their aim of poverty alleviation.
In addition, it was pointed that two issues were often neglected:
Finally, it was noted that legalization should not be an end in of itself (for purposes such as vote winning), but rather as means towards the end of providing security to the poor. The specifics of each context should therefore determine whether legalization is needed to provide security or other approaches such as formalization, social regularization, or service provision would be more appropriate.
Does legalization have negative effects?
The most obvious cost of legalization is the displacement of original settlers and residents. It was however noted that in many settings, displacement is often minimal once houses have been consolidated (in Bogotá? for instance, Gilbert shows that the average length of residence in 4 informal settlements is 19 years). As such, to determine whether legalization has negative effects largely depends on who captures the incremental value. Solutions to deal with forced displacement of poorer residents were discussed, including cooperative landownership. Finally, it should be reminded that the poor's inability to access land that has been ex ante legalized and serviced greatly diminishes.
What are the effects on tenants?
The issue of the impact of legalization on tenants (rising land values driving up rents and forcing poorer renters out, exploitative practices, etc) was also discussed. It was agreed that such effects remain by and large unproven due to the scarcity of empirical studies (the few authors who dealt with this issue include Gilbert, Varley, and Amos).
4. What are the future areas of research?
Modalities:
Discussants were alarmed by an increasing tendency to divert from critical research and analysis towards such new approaches as studying "Best Practices", which has been critiqued in its current form as a very limited analytical method that does not allow for understanding the full scope of experiences. Discussants emphasized the importance of conducting research "from the bottom" as well as the need for more:
Themes:
Discussants agreed that providing a comprehensive list of future research themes is impossible due to the diversity of issues and contexts. However, the following themes were outlined as areas that were largely neglected and/or in which more critical empirical studies were needed:
N-AERUS: Network-Association of European Researchers on Urbanisation in the South
http://www.naerus.net