Urban Change in Developing Countries

Urbanisation in developing countries presents distinct challenges and opportunities compared to the experience of high-income countries. Rapid, often unplanned urban growth creates informal settlements, strains infrastructure, and generates significant social inequality — but also drives economic development and innovation. This lesson examines the characteristics, causes, and management of urban change in low- and middle-income countries (LICs and MICs), with detailed case studies of Dharavi (Mumbai) and Kibera (Nairobi).

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The Informal Sector

The informal sector encompasses all economic activities that operate outside formal regulation, taxation, and government oversight. In many developing-world cities, the informal sector employs the majority of the workforce.

Characteristics

• Unregistered businesses — street vendors, market traders, waste recyclers, domestic workers
• No formal contracts or employment rights — workers lack sick pay, pensions, or legal protection
• Cash-based transactions — difficult for governments to tax or regulate
• Low barriers to entry — requires little capital or formal education
• Labour-intensive — provides employment where formal jobs are scarce
• Self-organised — workers create their own supply chains, credit systems, and customer networks

Scale

• In Sub-Saharan Africa, approximately 85% of employment is informal (ILO, 2018)
• In South Asia, around 82% of non-agricultural employment is informal
• The informal sector contributes an estimated 30-60% of GDP in many developing countries

A-Level Analysis: The informal sector challenges Western assumptions about economic development. Rather than viewing it as a problem to be eliminated, many development theorists (notably Hernando de Soto) argue that formalising property rights and reducing bureaucratic barriers would allow informal businesses to grow and contribute to the formal economy.

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Slums and Favelas: Characteristics

The UN defines a slum household as one lacking one or more of the following:

1. Durable housing of a permanent nature
2. Sufficient living area (not more than 3 people sharing a room)
3. Access to improved water
4. Access to improved sanitation
5. Security of tenure (protection against forced eviction)

Common Characteristics of Informal Settlements

Feature	Description
Housing	Self-built from improvised materials (corrugated iron, timber, plastic sheeting); gradually improved over time
Infrastructure	Limited or absent piped water, sewerage, electricity; unpaved roads; open drains
Population density	Extremely high — up to 100,000 people per square kilometre in some settlements
Health	High rates of waterborne diseases (cholera, typhoid); respiratory infections from indoor air pollution; limited healthcare access
Education	Low school attendance; informal community schools; limited facilities
Social networks	Strong community bonds; mutual aid; neighbourhood associations
Economy	Dominated by informal sector; small-scale manufacturing; recycling and waste collection

Terminology

Different countries use different terms for informal settlements:

• Favelas — Brazil
• Bustees — India (Kolkata)
• Barriadas/pueblos jovenes — Peru
• Townships — South Africa
• Bidonvilles — Francophone Africa
• Gecekondu — Turkey

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Management Strategies

Self-Help Housing Schemes

Self-help approaches recognise that residents are best placed to improve their own housing. Governments or NGOs provide basic support — secure land tenure, building materials, technical advice — and residents do the construction.

Advantages:

• Low cost to government
• Empowers communities
• Housing is tailored to residents' needs
• Creates local employment in construction

Disadvantages:

• Slow process
• Quality varies considerably
• Requires secure land tenure (often the biggest barrier)
• May not address wider infrastructure needs

Example: In Orangi, Karachi (Pakistan), the Orangi Pilot Project (OPP) supported residents in building their own sewerage system. Over 100,000 households installed underground sanitation at a fraction of the cost of a government scheme.

Site and Service Schemes

Governments provide serviced plots — land with basic infrastructure (water, sewerage, electricity, roads) — and residents build their own homes on the plots.

Advantages:

• More structured than self-help; ensures minimum standards
• Provides secure tenure from the outset
• Infrastructure is planned, reducing future problems

Disadvantages:

• Higher cost than self-help
• May be located on peripheral sites far from employment
• Can be captured by middle-income groups rather than the poorest

Example: Dandora, Nairobi — a site and service scheme funded by the World Bank in the 1970s. Initially successful, but over time many original residents sold their plots to wealthier buyers, undermining the scheme's poverty-reduction objectives.

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Rural-Urban Migration Drivers

Push Factors (from rural areas)