The world is rapidly urbanising, and urban informality is a central feature of our times. Conventional thinking views informality as corrosive to clean government, but new scholarship illuminates the complex relations between informality, power, and governance in cities. New technologies offer opportunities to disrupt entrenched power networks, tackle corruption, and ease the precarious lives of city dwellers. We look at how anti-corruption policies should be designed and implemented in urban settings marked by high levels of informality.
- The world is urbanising rapidly, and informal economies dominate many cities. Exposure to corruption is significant for urban dwellers living and working informally, especially in the areas of livelihoods and housing.
- Corrupt practices in urban settings include, among others, co-optation of collective organisations of informal workers, dishonest schemes that embed opportunities for rent seeking into urban infrastructure and services, and forbearance as a mechanism to convert informality into private political or economic gain.
- The popular remedy of formalisation to improve urban governance comes with substantive qualifications and caveats.
- Smart-city technologies offer mixed anti-corruption prospects. New platform economies such as ride sharing could reduce exposure to corruption in certain circumstances, but blockchain solutions for land markets are unlikely to make a mark. Remote sensing through drones and satellites could be helpful when deployed by the right users.
- An updated understanding of corruption and urban informality suggests ways to rethink interventions. Rather than grand change projects that aim to shift a city’s corruption equilibrium, practitioners can pursue selective tactical interventions to enhance transparency and support agency and voice among the marginalised. These may combine to trigger major advances in urban integrity.
Rethinking the informality-corruption nexus
How should anti-corruption policies be designed when the ways people live and make a living in rapidly growing cities are often marked by high levels of informality? What do we actually know about the relationship between corruption and informality in cities? Is there a distinctively urban dimension to this relationship, or can we just use insights from research on anti-corruption and local governance more broadly?
Urban informality, affecting economies, individual livelihoods, and living arrangements, is a central feature of our times. The world is rapidly urbanising, with the fastest rates experienced in the Global South. High and persistent levels of informality are a defining feature of these burgeoning cities. But our understanding of the relationship between corruption and informality is still evolving. Informality has long been seen as corrosive to clean government, as it both drives and is driven by corruption. This conventional wisdom is gradually giving way to a more nuanced understanding of how governance and informality may be related. Connecting insights from research on corruption, informality, and cities offers a richer account of the urban informality-corruption nexus than any single perspective can provide on its own. Meanwhile, emerging technologies – often discussed under the labels of ‘smart cities’ and urban digital empowerment – raise hopes for new ways to break open entrenched power networks, tackle corruption, and ease the precarious lives of city inhabitants.
This U4 Issue first lays out some of the principal features of urbanisation and informality. It then examines the relationships between urban informality and corruption, summarising a large body of empirical studies to shed light on the complex and multifaceted nature of these relationships. Next, it discusses how corruption might be reduced in settings of urban informality. We explore some of the most popular and promising anti-corruption approaches, from formalisation and technological approaches to more incremental and tactical interventions. The conclusion calls for moving beyond a narrow, formalistic view of curbing corruption in settings of urban informality and instead finding ways to encourage the agency that often flares up in unexpected places and situations.
An urbanising world
The number of people living in cities worldwide has more than quintupled since 1950, increasing from 751 million to 4.2 billion in 2018. Since about 2008, more people live in cities than in rural areas, and this rapid growth is expected to continue. This will add another 2.5 billion urban dwellers by 2050, at which point the world’s population will be two-thirds urban.65f26c32c559
More than 90% of future urban population growth is projected to take place in Asia and Africa. India, China, and Nigeria alone are expected to account for 35% of this growth, adding more than 400 million, 250 million, and 180 million urban residents respectively over 30 years. Despite a popular focus on megacities, much of this urban growth will be dispersed across secondary and tertiary cities with fewer than 500,000 inhabitants. Such cities already host half the world’s urban population.e1dabc961ec1
Serious governance challenges lie ahead. Sixteen of the 20 countries that post the highest urban population growth rates in 2018 score in the bottom half of Transparency International’s Corruption Perceptions Index (CPI), pointing to high corruption risks in the public sector.a7e49ac18033 Likewise, the top ten most rapidly urbanising countries for which data are available have extraordinarily high proportions of their urban workforce in informal employment, from 63% in Mali to 88% in Nigeria and Angola.e311d3b5a00d
Urban informality data
Variations in measurement and definitions notwithstanding, there is broad consensus that informal economies and informal housing are highly prevalent, persistent, and on the rise in many cities around the world.
Informal economic activities in cities
An estimated 2 billion workers, more than 60% of the world’s employed population, are in informal employment. On average, close to half of the workforce in cities (43%) is informally employed.a5230129c78a As well as providing livelihoods, informal economic activity provides affordable and available goods and services to large parts of the urban population in cities of the Global South. For example:
- In Sub-Saharan Africa, 70% of urban households source food from informal outlets, including street vendors.8a2973feca4e In Kampala, three-quarters of the estimated 200 markets are believed not to be formally registered.abf54c595bac
- Informal, small-scale transport is the predominant means of getting around many cities, accounting for more than half of all public transport trips in Tehran and Cairo, more than 70% in Mexico City and Manila, and more than 90% in Algiers and Dakar.7fcb147fbc4f
- Access to piped water and formal water networks is not available to more than two-thirds of poor urban households across Africa and Asia-Pacific.99324ec69d18 Indeed, the proportion of the urban population with water piped to premises and/or access to improved sanitation has declined in some African countries over the past three decades.8ceda254f317 Frequently, small-scale and informal water vendors pick up the slack.883e7b9ee038
High levels of persistent informal economic activity have prompted many observers, including those focused on formal governance institutions, to accept informality as the ‘new normal’ in many cities. This has led them to reappraise and explicitly acknowledge the functional value of informal institutions in urban governance.04793efad920
Informal urban housing: Ubiquitous and on the rise
Formal housing supply is not keeping up with urban population growth, and this is driving new informal settlements in many cities. Urban housing is also embedded in land markets, which are overwhelmingly informal in many developing countries. In West Africa, for example, only 10% of land is registered in some way, and only 2%–3% with official government titles.ab9593594a4b In urban areas across Mexico, nearly 40% of owner-occupied dwellings lack full deed.ece2c5baae59 One in five residents of Rio de Janeiro live in a favela, while a third of Guangzhou residents live in informal urban villages. In Mumbai, an estimated 40% of people live in so-called slums.ed9dcf983a23 Across Africa, the incidence of informal urban housing is higher still, encompassing on average 60% of the urban population.3e0af923c9c6
These figures, however, mask a high degree of diversity across world regions, countries, and cities in terms of what informal settlements look like. In South America, buildings that lack proper title are often owner-built and owner-occupied. In Sub-Saharan Africa, large shares of informal housing are small-scale rental units owned by absentee landlords, while in China, large-scale developments instigated by developers and local officials sprout up in peri-urban areas but lack proper permits and titling.1dff0f17e684 Informality in urban housing is by no means confined to developing countries alone, as the lack of affordable housing is reaching crisis point in some Northern and Western cities too. In the United States, more than 2 million housing units are estimated to be located in informal subdivisions.83b4ae11b009
Globally, the share of the urban population living in slums declined by a few percentage points between 2000 and 2014. But it is still very high in absolute numbers and is increasing in several countries. More than one in five urban residents are now slum dwellers. In 2014, more than 880 million people across the world called urban slums their home, up from just over 800 million in 2000.c6dc83980034 This number is expected to double by 2030 and even triple by 2050. Informal settlements are thus the predominant form of urban housing in many developing countries. Not just a temporary stopgap for new arrivals, they are increasingly a long-term reality across generations in many places – more poverty trap than steppingstone, as one expert bluntly puts it.7ba470b07871
Urban governance and informality: Major patterns and dynamics
At least four main structural features distinguish cities from rural areas: their population scale, density, diversity, and rapid growth.d5a7c3001c3e These features combine to create distinctively urban governance situations, corruption risks, and informality dynamics. A brief overview is provided below.ceca9239dc1b
Cities still attract migrants, but recently urbanising places offer fewer economic prospects
Urban scale and density offer economic agglomeration effects that turn cities into beacons of opportunity. Survey-based estimates in China, for example, suggest that migrants are willing to sacrifice 8% of their incomes over five years for the privilege of becoming urban residents.4918368d0ac6 Yet this promise is wearing thin in the most recently urbanising places. In the highly integrated global economy, geographic divisions of labour and competitive advantage in manufacturing and low-skill production are already firmly entrenched. This makes it difficult for newly industrialising countries and their cities to follow the same economic development paths as their forerunners.
As a consequence, in some of the most rapidly urbanising areas of the world, particularly in Africa, urban economic investments, manufacturing capabilities, and job opportunities are not growing in line with the influx of new residents. This phenomenon has given rise to what are called consumption rather than production cities.76002e718856 These new urban centres host many poor people who have little prospect of moving quickly into formal, well-paid employment, yet face high urban costs of living. This has important consequences for urban inequality, political identities, mobilisation dynamics, and the overall political economy of cities.
Urban politics is typically more competitive than rural politics
Cities are disproportionally governed by parties that are in opposition at national level. Bigger constituencies enable a deeper bench of qualified candidates for office and a higher number of informed voters.82c990e2739f Density and spatial proximity make political organisation easier and encourage poorly resourced opposition parties to concentrate their efforts in large cities. Cities also tend to have sufficient socioeconomic scale and diversity to support several competing clientelistic networks. As a result, they tend to offer more political choices for residents and more intense political competition than rural settings.a55689882fc6
Urban governance is complex and multi-level
Rapidly growing cities tend to outgrow their jurisdictional boundaries and evolve into functional metropolitan areas that require coordination across several local districts. The jurisdictional reach of city government covers, for example, less than half of residents in Mexico City, Manila, or Jakarta.24d270318c11 Coordinating vital urban functions involves dozens of local jurisdictions in São Paulo and Mexico City and more than 100 in Abidjan.852e1b29859a Similarly, many urban services fall under the responsibility of national or state-level actors or move back and forth between levels, requiring tedious coordination. Political rivalries may further complicate the situation. In Kampala, for example, responsibilities for specific policy areas have shifted multiple times between city and national-level government entities in waves of decentralisation and recentralisation that reflect a power struggle between the two political camps that control the city and national governments.e8280f0db592
Taken together, these characteristics of urban centres influence the relationships between informality and corruption in crucial ways. Governance complexity and multiple public service problems are typical red flags for corruption. Insufficient formal sector employment and insufficient and/or unaffordable formal services provide the backdrop for high levels of informality. At the same time, multi-level governance and intense political competition in urban areas suggest that there are many potential entry points for political agency and mobilisation.
Corruption and informality: What do we know?
‘A terra não se vende, mas compra se – The land cannot be sold, but it can be bought.’
– Mozambican saying24947d6fd9ff
How does corruption affect informal economies and livelihoods? How do corruption and informality interact more broadly? The following sections synthesise relevant empirical literature, sorting the evidence into four broad segments:
- Macro-structural accounts that chart some principal relations between informality and corruption, primarily based on regression analyses
- Empirics on ‘street-level’ corruption in informal urban settings and people’s everyday experiences in cities when interacting with public officials, services, and bureaucracies
- Empirics on urban corruption systems, the deeper rent-extraction mechanisms that operate in urban settings
- Empirics on urban policy capture, the systematic bending of higher-level decision-making processes and policies to illicitly favour special interests
A macro-level view of corruption and informality
Various macro-structural analyses establish a clear positive correlation between corruption and poor governance on the one hand and informality on the other. These studies essentially support the conventional premise that poor governance – from red tape to corruption – crowds out formal economic activity and drives people into informality, and/or that a high degree of informality fosters corruption and poor governance.eca3e9da4933 Given interpenetration between the formal and informal sectors,24da9da311db such general claims may be of limited explanatory value. But it is noteworthy that even at this macro level of analysis, recent studies point to a complicated relationship between corruption and informality.
Analysing Central and Eastern European countries, for instance, Williams6a3f8fe732cc finds that positive labour empowerment and social protection interventions are more powerful explanatory factors for lower levels of informality than the absence of red tape and corruption. Dreher and Schneider3a35e9e565b9 find that corruption and informality are complements in low-income countries, but not in high-income countries, where low informality goes hand in hand with higher levels of corruption. This may be because low informality in richer countries signifies high state capacity to prevent economic actors from exiting from rules and regulation into informality, and thus governments become a potentially lucrative target for corruption on the part of actors seeking to evade and bend the rules. Dutta, Kar, and Roy3950c2a93e17 identify a similar dynamic in Indian states, where informality and corruption are found to be complements in low-income states and substitutes in higher-income ones. What’s more, the idea of a symbiotic relationship between informality and corruption has been challenged. Bologna,d7a741c07948 for example, finds in her comparison of more than 400 Brazilian cities that corruption depressed economic performance in the informal sector, yet had only a statistically insignificant effect on formal sector output.
Street-level experiences of corruption and informality
‘Un político pobre es un pobre politico – A politician who is poor is a poor politician.’
– Mexican politician and businessman Carlos Hank González
Conventional governance surveys rarely break out their data by experience and perceptions to discuss the formal versus informal spheres of governance. However, some local-level surveys and a growing number of qualitative studies (using, for example, focus groups and participant observation) have begun to shed light on the relationships between corruption and informality. The emerging empirical picture is rich and defies easy classifications.
Micro-enterprises: High corruption risks, yet not so different from the formal sector
A survey of micro-enterprises in Tanzania finds that the vast majority, 88%, are paying bribes and that corruption is regarded as a significant problem.8cff2f8db451 Firms exposed to bribery are more likely to be concerned about regulations and the quality of utilities than their non-bribe-paying informal peers, suggesting that these corruption risks are tied to interactions around public services and regulations. A survey-based investigation into corruption exposure of different types of metropolitan transport services in Lagos finds a similar risk of bribery for more and less informal modes of transport. A staggering 90% of transport providers reported having been asked for bribes by the police in a three-month period, yet these rates are similar for taxis, motorcycles, and tricycles, which exhibit varying degrees of informality.1998e6c5f793
A comparative cross-city survey in seven major urban areas in West Africa arrives at a somewhat lower, yet still significant estimate for the prevalence of bribery. It puts the overall bribery rates among informal firms that had contact with public institutions at 37% on average, reaching 40% in Bamako, 45% in Abidjan, and 47% in Lomé. Again, transport was found to be the sector most exposed to bribe payments.541a2551c950
Informal livelihoods: Corruption as a daily challenge
People living and/or earning livelihoods informally have been widely documented as being subject to persistent harassment, violent abuse, and extortion, with female vendors often the primary victims.8d8031cc95d7 Two quotes from focus group research point to the strikingly similar experiences of street vendors on two continents:
‘The police and fiscais [government inspectors] arrive on motorcycles. They kick us and throw our goods to the ground. Sometimes they take them, unless we pay.’ – Street vendor in Luanda, 2013600dc31c8800
‘If you don’t pay what they [guards hired by the municipality] ask for, sometimes they will even beat you, throw your merchandise on the street, kick you, take your stuff away, and the municipality will not do anything. They are on their side.’ – Street vendor in Lima, 20120e7a6dc9a96e
These statements are emblematic of other accounts collected through ethnographic research on street vending. The quote from Lima is affirmed by a different study, in which half the city’s officials reported it was commonplace for street vendors to pay bribes to stave off enforcement actions.9cdcefd5fe30
Bribe payments take up a significant share of the already low incomes of people who earn their living informally. A survey of 400 street vendors in Mumbai paints what is probably the most detailed picture of bribery in urban street vending. It suggests that two-thirds of street vendors pay on average 15% to 20% of their daily income as bribes. These sums include larger periodic payments to administrative authorities when eviction is threatened and smaller, daily bribes to the police to fend off harassment. Respondents also report an increase in harassment and bribe paying, regarded as the principal reasons for stagnating net incomes in the vendor segment. Female vendors are slightly less likely to report paying bribes, a pattern the author attributes to the even lower social status and impoverishment of female vendors, who often live in penury and thus present a less attractive target for extorting bribes. The survey also teases out strategies of resistance employed by the one-third of vendors who claimed not to pay bribes. Some run away when the police or public officials show up, while some of the older, experienced vendors simply stand their ground.a8cf3c68fc72
Most, though, have little choice but to pay up. Their dilemma is highlighted by the tragic story of Tunisia’s Mohamed Bouazizi, the vendor whose death helped spark the Arab Spring (see box).
Street vendors in Tunisia often operate in a legal grey zone and are subject to permanent harassment by the police. On 17 December 2010, Mohamed Bouazizi, a young Tunisian vendor, was once again asked to pay a bribe he could not afford and saw his scale and wares, which he had purchased on credit, confiscated. He was so fed up with this constant harassment and extortion that he set himself on fire and died. The incident is widely believed to have helped spark the so-called Arab Spring of upheavals and political transformations across the Middle East and North Africa.
Informal housing: A different set of corruption risks
Exposure to street-level corruption in informal housing is more difficult to assess, and there is less evidence available for several reasons. For one, compared to informal livelihoods, informal housing is much less comparable across countries and regions and thus less amenable to cross-country surveys. As noted above, informal housing takes a variety of forms, including owner-occupied homes, units rented by absentee landlords, and large-scale commercial housing developments, among others. National and local-level jurisdictions may apply and interconnect in different ways across countries. Zoning and construction are typically administered locally, but property rules are usually a national policy domain.334fa0efeba0 Similarly, the institutional backdrop of property systems varies, often combining elements of customary and statutory law that create fragmented, incomplete, and at times inconsistent systems. This means that stakeholders, their incentive systems, and the most pertinent corruption risks differ across cities and countries. Corruption analyses focusing on individual cities occasionally include brief accounts of bribery in informal housing. Budhani et al.,355ca34e6b5c for example, describe how dwellers in informal settlements in Karachi must pay off both officials and the police on a regular basis to avoid eviction.
There is ample research on how bribery and corruption shape the institutional backdrop for formalising and maintaining formal property and housing arrangements in a city.1eeeee12a3a8 Property transfer, registration, and building permitting have been found to be rife with bribery as well as red tape, opacity, and bottlenecks conducive to bribery. These include:
- Bribery risks. Eight of the ten fastest urbanising countries for which data are available have reported bribery rates in land registration above 20%. The rate is more than double this in Uganda, Senegal, Ghana, Bangladesh, Tunisia, and India, and reaches a staggering 75% in Pakistan.faaa8d833b8a Similarly, in Asia-Pacific, 45% of senior managers in construction businesses reported paying bribes to obtain corruption permits, while in Latin America it was 11%.1dbaf9ec656b Data from anti-corruption helplines operated by Transparency International further confirm these findings. A majority of complaints were received from urban areas, and corruption in relation to land issues was the main source of grievance.ef43d2d1de4d
- Complex administrative procedures. Registering property takes six procedures and around 60 days in Sub-Saharan Africa and Latin America, and a staggering 111 days in South Asia. Obtaining a construction permit requires 15 procedures and around 150 days worldwide, reaching 190 days in South Asia and Latin America.62b65782cc51 In Indonesian cities, land registration and permitting is reported to be more expensive than the land itself.d16270f34e98
- Opacity. In 51 economies the only way to obtain information about the documentation required for property registration is through in-person contact with a public official. Only one-third of low-income countries publish related fee schedules online. And only 10% of lower-middle-income countries – and not a single low-income country – make property ownership information freely available.88ab6f620290 Opacity is commonly believed to come with high risks of corruption and incentives for both more and less legitimate claimants to resort to bribery to navigate registration systems.
Street-level bribery to purchase, for example, protection from eviction is only the tip of the iceberg, however. These transactions are rarely individual opportunistic exchanges, where the power holder extracts extra payments from a vulnerable person or the latter purchases administrative discretion. Rather, many are embedded in and sustained by systemic rent-seeking and corruption schemes involving many stakeholders and drawing on a broad repertoire of corruption strategies beyond bribery alone.
A meso-level perspective: Informality and systematic rent extraction
‘77% of survey respondents in African cities and 61% in Asian cities believe public office holders benefit most from urban reforms due to corruption.’ – UN Habitata667f1858682
‘Land scams become possible . . . because the bureaucracy is hand in glove with politicians. Virtually everybody from top to bottom is on the gravy train and works overtime to provide illegal gains to realtors, rather than acting as custodians of public interest.’ – Investigative news article, Mumbaie6fa74095b34
These observations are derived from a review of the literature on taxation of the informal sector. Very little of the limited research into the bribery and corruption experience of informal urban livelihoods seeks to root observations in a deeper explanation of how these bribery exchanges come about and how they are linked to broader political and social dynamics. Neither surveys, interview-based corruption literature, nor deeper ethnographic accounts in urban studies have offered, until recently, such deeper analysis. This is changing, however, with a new crop of studies on urban political economies and the meso-mechanics of corruption,bba9a9a45d44 which draw on and update an established canon of work on patronage and clientelism.
While a comprehensive picture of these dynamics is beyond the scope of this paper, three broad themes stand out and will be discussed in the following sections: (a) the co-optation of collective interest representation in the informal sector; (b) corrupt rackets that create, expand, protect, and embed opportunities for rent extraction into the infrastructure and service landscape of cities; and (c) the role of forbearance as a cross-cutting but overlooked mechanism to convert informality into private political or economic gain.
Entrenched systems of rent extraction: Self-reinforcing and expanding
‘You’ll never see the big guys … They are somewhere “up there.”’ – Informant in the Kampala informal transport sector0fad8c788aa4
‘The biggest barrier is not land tenure, it’s not engineering, it’s not financial, it’s not the feasibility of it and it’s not the willingness [of slum dwellers] to pay … The biggest thing is the vested interest: either the local cartels or simply the government of the day … With a concerted effort, you can genuinely deal with [water supply to] Kibera within a year.’ – Water expert in Kenya, referring to Kibera, the largest informal settlement in Nairobi499b0e4f2959
The co-optation of collective organisations of informal workers, to turn them into vehicles for extracting economic rents and political resources, already hints at mutual interests, transactional reciprocity, and opportunistic alliances between economic and political actors. Yet such collusive arrangements go beyond maximising exploitation based on the day-to-day operations of informality. They are also geared towards actively producing, reinforcing, and expanding the conditions that underpin informal markets and informal livelihoods. These alliances are based not on temporarily intersecting interests but on deeply interlocked and aligned interests. In short, they manufacture and hardwire informality into urban infrastructures and economies for sustainable rent extraction.
The political settlements perspective advanced by Khan09b6a33da229 has brought such rent-extraction alliances into focus. The conceptual and empirical work under this approach has greatly advanced our practical understanding of how power is organised and interacts with informality in these arrangements, albeit with an exclusive focus on the national or sectoral level. Goodfellowabc785b8870d has adapted the political settlements lens for the urban context and demonstrated how it can be extremely useful for guiding and interpreting research on urban rent-extraction systems.
More specifically, Goodfellowd0f4d37d573e documents the contours of the deeper relations that underpin the highly lucrative informal transport sector in Kampala. As it turns out, it is common knowledge inside the sector, although difficult to prove conclusively, that politicians at both city and national levels get a cut of illicit payments. Moreover, they are believed to be among the biggest owners of minibus fleets. They reportedly built up their ownership stakes by asking businessmen who sought favours from them to ‘buy ten or twenty matatus for them as a bribe … They all started doing it, so now most owners happen to be politicians’.bbe44dbcb48e Owners often hide behind strawmen who formally front these businesses. Similarly, accounts of the informal urban transport sector in Nairobi hint at the likelihood that the most lucrative routes are controlled by former police officers and gangs with deep connections into law enforcement and government.d79f0ecb204a
Similar collusive rent-extraction systems have been identified in the urban water sector. Far from simply extracting bribes from informal vendors who fill critical gaps in public water provision, water ‘mafias’ – collusive networks of political and economic power – actively influence public water infrastructure and provision. They do so in ways that maximise and entrench lucrative private business opportunities and the rents from informal provision. In Jakarta and Mumbai, private water vendors and local officials run elaborate kickback schemes and collude to limit public access to water and maximise private profits, with a 50% markup over costs.12cd8db3645f In Nairobi, similar scheming led to an estimated 80% markup of water prices for underserved communities.f29bb8e254e9 Water infrastructure in the Mexican city of Neza was allowed to become dilapidated to enable officials to collect bribes for repair work, while selective shut-downs were deployed as political weapons.a15651d5c361 Similarly, in Lagos, service extension to underserved neighbourhoods was sabotaged to protect private rent opportunities.0dfa414fad3a
Manufacturing scarcity and locking in informality is only one side of the coin, however. Selective access and privileged availability is the other side. Free water provision via mafia vendors in Bangalore07def6a0815d and the placement of community standpipes in Mumbaib23ac7aa18ec have been tactically aimed at securing vote banks. In Mumbai, elites managed to retain, protect, and expand the subsidised access they enjoy at the cost of expansion to underserved neighbourhoods.b53488cf183d Entrenched rent-extraction systems in the urban water sector have also been able to withstand partial privatisation. In urban Ghana, illegal connections to the water networks were enabled by corrupt employees, and patronage networks inside the water bureaucracies ensured that no disciplinary action was taken.bf9e59d284bf
Rent-extraction schemes are perhaps even more deeply rooted when it comes to urban informal settlements. As it turns out, the on-the-surface business of bribery for dealing with code violations or securing plots masks much deeper structures aimed at extracting rents or pursuing political goals in insecure tenure situations.
In Bogota, for example, a survey of housing officials found that two-thirds believed government interference is a more serious obstacle to inclusive housing than budget constraints.5403963cbec7f7d5d4e4fefa In Kibera, the largest inner-city informal settlement in Nairobi, it is estimated that more than 90% of residents rent from absentee landlords who benefit from this highly profitable venture to the tune of around $30 million in rental income annually. More than half of these landlords are believed to be government officials or politicians.3ca21f64bcc1 Informal housing markets are also identified as important sources of rents for government officials from Karachi to Dar es Salaam.f1ce5c031506
The agency of inaction: Forbearance as a cross-cutting mechanism
Things that are not done or do not happen are easily overlooked in analysis, since they lead into the epistemologically difficult terrain of hypotheticals and counterfactuals. And when inaction is noted explicitly in studies, it is often explained as the result of a lack of knowledge or capacity for acting. This is often the case with regard to forms of informality, such as informal housing schemes or untaxed economic activity, the persistence of which is often intuitively attributed to a lack of enforcement capacity.
On closer inspection, however, there is another important driver of inaction that might be relevant in urban informality: deliberate, calculated forbearance as a tool for a variety of both legitimate and corrupt aims and objectives. Holland79cac0998fac defines forbearance as the ‘intentional and revocable nonenforcement of law.’ The idea that calculated forbearance matters is an old one, going back at least to Scottffae70943e6b and his groundbreaking work on urban machines. Scott posits that politics in weaker governance settings mostly plays out in the enforcement and implementation stage, rather than in the policymaking stage. As he put it, ‘A large portion of individual demands, and even group demands, in developing nations reach the political system, not before laws are passed, but rather at the enforcement stage’.49c0ecc46c39 This has also been a longstanding tenet in the area of taxation, reflected in the observation that ‘tax administration is tax policy’.2596f989177a The idea of wilful inaction features everywhere in the grey policy literature on governance, where ‘lack of political will’ is a popular yet deeply unsatisfying shorthand to explain many significant enforcement gaps.
Deliberate forbearance is a common theme in recent analyses of urban informalities and urban political economies. Holland7c3fe40ec917 has begun to systematically unpack its drivers, forms, and consequences. Conceptually, she shows how forbearance may be a vehicle for conventional corruption or plutocratic policies (when regressive in impact, and depending on whether or not it is contingent), or, alternatively, may serve a clientelistic or welfarist purpose (when progressive in impact, and again depending on whetherit is contingent or not). Either way, forbearance, more than any other policy choice, is directly linked to producing and sustaining informality. It is an elegant, elastic, and effective political instrument. As non-action it does not run into resource constraints or capacity problems, nor does it require the assembly of political coalitions. It can be revoked with relative ease and thus has a credible-threat potential that produces and sustains exploitable uncertainty, vulnerability, and ultimately dependency on the part of beneficiaries. It can be dispensed with impunity and plausible deniability, easily excused as a result of resource or information problems. It is thus hard to identify and sanction as an act of corrupt quid pro quo.
With these features, calculated forbearance might be the most important strategy in the politics and rent-extraction dynamics of informal urban settlements and livelihoods. It certainly surfaces in many empirical accounts. Hollandb6ca565da4b1 documents how elected officials in Santiago systematically reduced crackdowns on street vending in poorer districts prior to elections. And she traces how forbearance plays a major role in the low enforcement rates, well below 1%, for evictions in Lima and Bogota. The lens of forbearance also helps explain the lack of political will with respect to property system reforms: politicians in many settings prefer insecure tenure arrangements over more secure property rights, as insecurity allows them to retain the option of forbearance in their political toolbox.807f71ac16b4
For Turkey, the non-eviction of urban squatters is described as the primary means to secure urban votes.2917ae27f5f5 More low-income urban residents have acquired their homes through illegal settlements and illegal sale than through official social housing programmes. The implicit subsidy in terms of savings on rent is estimated to be three times the total of the combined value of all social programmes for this group.e03f04e944ab
In Zambia, deliberate non-enforcement of laws against street vending was identified as an important part of the opposition platform in the 2011 elections and helped bring about a change in government.f110e42e6d02 Calculated forbearance has also been empirically linked to the election cycle in the Indian state of Uttar Pradesh between 2000 and 2009, where illegal tapping of electricity was allowed to increase by a significant 3 percentage points in the run-up to elections as a political move to sway voters.b381dde079ac
A systems view: Informality as pawn and weapon in urban policy capture
‘The Law, in its majestic equality, forbids, the rich, as well as the poor, to sleep under the bridges, to beg in the streets, and to steal bread.’ – Anatole France, The Red Lily3605805d804e
Policy capture is not about flouting and exploiting the rules of the game (street-level corruption), or about systematically organising and maximising this type of rent seeking (meso-level corruption). Rather, it involves institutionalising undue influence on the rules themselves and, even more fundamentally, on the process of defining the rules.c89125077da7
Some aspects of policy and government capture are well researched and well understood: for example, the financing of political campaigns and how it creates deep dependencies that structure policymaking in favour of special interests. The classic framework for thinking about policy capture in the urban realm is the notion of urban machines. Vote buying and patronage as strategies to entrench political control have proven particularly effective in fast-growing cities that experience a large influx of new residents. An emergent body of analysis in urban political studies has begun to revise this account in the context of contemporary urbanisation.88a98a36a3af These new insights go beyond the scope of this paper, but it is relevant here to focus on a dimension of policy capture that is less researched and bears a direct link to urban informality.
Informality as elite rhetoric and practice for policy capture
Central to this dimension of policy capture is the work on informality by Roy,02d157f33f66 who posits that ‘informality exists at the very heart of the state and is an integral part of the territorial practices of state power.’ This echoes longstanding claims by scholars of political settlements, who view informal institutions as tools that the powerful can use to align formal institutions with their rent-seeking interests.13199ab55353 It underpins the analysis by dependency theorists on the role of informal labour as the main engine of capitalist expansion and exploitation.2ced22b69ea6 Yet Roy and colleagues expand on this view and apply it to the context of cities and urban development, and in so doing they direct attention to different types of informality. Divorcing informality from its association with the weak, small, poor, marginalised, and disorderly, they advance the notion of elite informality that shines a spotlight on the many informal development practices undertaken by the rich and powerful. Roy enlists urban expansion in Kolkata as an illustrative example. As she notes, ‘Elite informality is often legitimized … Thus, the new towns on the peri-urban edge of Kolkata exist in direct violation of the state’s own proclaimed policies of protecting agricultural land and wetlands … But rarely are they seen to be informal or illegal’.ac7241df501f
This reframing of the narrative is what makes this strand of critical urban scholarship so refreshing. One can test this on oneself: when one hears the term ‘urban informality,’ doesn’t it call up the image of an urban slum, rather than of a gleaming shopping mall erected on environmentally protected land? Once one accepts the concept of elite informality, examples are easy to come by. They include the blatantly illicit violations of building and zoning regulations by senior government officials in Hong Kong for their own homes; illegal golf courses or systematic violations of building codes by developers connected to senior government levels in China; and the headquarters of the most influential industry association in Bangladesh, allegedly built on illegally obtained land without proper approval in an ecologically sensitive zone in Dhaka.38ae86c6c7a8 Such projects continue to defy legislation and present a physical manifestation of impunity.
More often, however, elite informality manifests as projects that strategically exploit legal loopholes with the help of inside experts.093ba40bb398 They may start out as illegal developments but are later regularised rather than kept in convenient legal limbo like their counterparts in slums. Case studies attest to a multitude of such projects, ranging from palatial mansions in Delhi to corporate offices and luxury developments across cities in India, Bangladesh, Mexico, and Pakistan.bc42cdb619d9 Rules and regulations are often changed prior to the construction of lucrative developments in order to give them a veneer of legality and steer business opportunities or windfall profits from land ownership to connected developers. This happened, for example, in Queensland, Australia, where politically connected developers benefited disproportionately from rezoning changes, pocketing more than AUS 400 million over a five-year period alone.ca856d33bd20
Kigali provides perhaps one of the most vivid examples of this type of entitled urbanism, where elite informalities are made possible by adapting rules rather than flouting them. For while bribery rates in the property registration sector overall are described as extremely low and affect only 4% of people interacting with the system,ef282c3b0374 Kigali has changed its zoning laws several times, back and forth – an indicator that the laws have been manipulated to accommodate the many high-value real estate and urban development projects in the city.021a8c4d9876 As in other cities, the widespread and unchallenged opacity of ownership and transactions in high-end real estate and urban land makes these assets prime vehicles for laundering money and investing ill-gotten gains.8cddfe48e9f3
Critical urbanists have used insights on elite informalities and the biased use of the informality narrative to turn the discursive table: they have coined a new concept of informality as the negotiability of value. This fresh perspective provides a much more even-handed vantage point from which to examine informalities. It highlights the essentially political nature of the concept and thus makes salient the delegitimising connotations that bias the approach to conventional, street-level informality. At the same time, it exposes elite informality and stealth formalisation for what they are: subtle forms of policy capture that deserve to be subjected to political challenge. Finally, given the many ways in which the formal and informal are entangled, it might be most productive to understand this interplay as a sort of bricolage, made up of at times messy interfolding bits and pieces across various planes, partly deliberately construed, partly occasioned by emerging practices.64e06b644c3a
What to do and where next for city integrity?
What does the analytical landscape on informality, corruption, and urbanisation tell us about possible anti-corruption strategies?
First and foremost, it cautions against silver bullets. The diversity and contingency of practices and actors at the nexus of informality, corruption, and urbanisation frustrates the quest for blanket policy solutions. Yet the same complexity and contingency also affects corruption schemes and the grip on power by the corrupt, which is never complete and immutable. These insights can in turn inspire locally grounded struggles for incremental and transformative changes, because they dispel both the overwhelming quest for an all-encompassing solution and the paralysing sense that nothing can be done. As Pieterse76c0fe65d3ea puts it: let’s pursue ‘radical incrementalism’, so that ordinary practices become a template for social change and people’s empowerment.
A comprehensive inventory of all policy measures that might have an impact on urban informality and corruption is impossible. They range from initiatives anchored in right-to-the-city, urban justice, or general human rights principles all the way to technology-centred ‘smart-city’ or ‘smart-citizen’ initiatives. Relevant interventions may take place far outside the immediate urban realm. For example, changes to how parties select candidates or how taxes are raised and shared between local and national levels might fundamentally change the dynamics at play in an urban context. Such measures are outside the scope of this analysis. Instead, the following sections briefly revisit two of the main types of direct interventions that have been most prominent in recent years – efforts around formalisation and the strategic use of technology – and then move on to suggest some worthwhile areas for applying the interventionist needles of urban acupuncture.
Formalisation: Pathway to progress and integrity?
Perhaps the most common recipe for dealing with the negatives typically associated with informality is formalisation. At times this is couched in draconian terms, with suggestions to eradicate informality by cleansing city streets of unlicensed vendors, evicting squatters, and undertaking surveillance, surveying, monitoring, and mapping to make the structures of informality legible and sanctionable. At other times formalisation is presented in enabling terms as measures that can cut red tape, enhance access to registration services, and provide incentives to use them.
Formalising land and housing
In terms of formalising informal housing arrangements, most influential is probably still the work by de Soto8cefcddfeae9 and others following in his footsteps. According to this view, formalisation of land and property ownership is an essential way not only to help poor households gain tenure security and protect against corrupt extortion, but also to equip them with an economic asset that opens access to credit and housing markets and unleashes their entrepreneurial energy.
Yet evidence on what formalisation can and cannot achieve and on how this links back to dynamics of corruption is scarce, and frequently diverges from this intuitive narrative. While an analysis of Mexico’s titling programmes finds a reduction of local clientelism,2b2e8412cd4d research on Chinese housing markets concludes that formalisation efforts around peri-urban land are not expanded due to fears of undermining social stability and accelerating illegal encroachment of developments into environmentally sensitive areas.b14e2e1aca4a Research on the value of deeds in Mexican cities also suggests that formalisation is barely effective in reducing poverty. It is found to benefit primarily communities that are highly educated and politically efficacious and who enjoy a ‘culture of formality,’ while the value of informal property by the poor is much more influenced by structural and material attributes than by complete formal ownership rights.c15035fcdb63
More generally, it is feared that an approach based on formalisation of individual ownership may be too narrow and rigid in the many contexts where urban property ownership structures are complex – shaped by a mosaic of customary and statutory law, individual and common ownership, inconsistent and incomplete record keeping, and so on. Nor can such an approach easily accommodate the layers of pragmatic arrangements that often structure and coordinate a web of different uses, functions, and relations attached to urban land and property. Land experts therefore increasingly embrace the more elastic notion of a social continuum of ownership and use that covers a wider range of possible arrangements as a means to understand and improve urban housing. They also argue for the recognition of hybrid land and property holding arrangements where these structures can be leveraged pragmatically to yield socially beneficial outcomes.ffc4ea09026d This suggests that practitioners should undertake a careful assessment of extant informal and formal arrangements in devising suitable trajectories for urban reform, while paying close attention to how abuses of power can interfere and be contained along the way.
Formalising economic activity
A common premise about the relationship between corruption and informality in the economic sphere is that formalisation is an effective strategy to protect against corruption and predatory state behaviour. These hopes are encapsulated in a remark by a street vendor in Mumbai, who said, ‘We would like to pay the amount as taxes instead of bribes for our … space. We would even love to pay double the amount that we are paying now’.56c4a5fe352a
The evidence on whether formalising economic activity reduces corruption is mixed and inconclusive, however. On the positive side, taxing informal enterprises has been found to lead to more bargaining power for micro-enterprises in Ghana,88d0d5a324c2 more public engagement in Ethiopia,a16cd89195d3 and more trust by these firms in the state in Sri Lanka4cfef7612bf0 – all traits that could be seen to pave the way for more accountability and less extortion. Yet there are also reasons to believe that such benefits are not spread equitably. In Indonesia, for example, they are found to accrue mainly to mid-size but not small firms.0488fbb7dbb3 Accounts of street vending in La Paz in the 1980s and 1990s also show that tax and bribe payments were closely tied together. The official daily payment for use of public space had to be topped up with an unofficial payment to the police.38fa42a3beef Similar tax/bribery schemes are also reported in Mumbai.c7a222204a14
These findings suggest that corrupt bureaucrats prey on informal and formal economic actors alike. In line with this premise, newly registered firms in Kenya have been found to still be subject to harassment by public officials.7af9737ae5eb And in Lima only 25% of firms in a field experiment were prepared to formalise, even with registration costs largely waived, due to limited expected benefits and low trust that the government would uphold its part of the bargain.93bf2d7b5aed
Other accounts suggest that selective inclusion or exclusion, enforcement or forbearance, are at times deployed as corrupt tactics in themselves, resulting in greater exposure to corruption and marginalisation for the least powerful economic agents engaged in formalisation.dbfe289495bc An ethnographic study of street vendors in Paraguay, for example, finds that formal recognition creates the conditions for a lack of recognition in the first place. Street vendors are deemed legitimate when they pay formal fees. However, they are rendered immediately and explicitly illegal when these payments are rejected, as is often unexpectedly the case. This turns formalisation and its sudden reversal into a tool of ‘regulation by ambiguity’ or ‘dispossession by formalization,’ as Tuckerc02f212d257b calls it.
Against this backdrop it is not surprising that a survey of street vendors in Lima found that only 20% of registered vendors believed that such formalisation brings the advantage of not having to pay bribes.29c19a00b5bd Similarly, the degree of formality in terms of collective organising within this sector did not influence exposure to corruption. In São Paulo, both organised and unorganised street vendors reported to being subject to a bribery racket by officials who used the threat of confiscation to extract bribes.a3db32d7d7fd In La Paz, street vendors indicated that they were paying smaller, more frequent bribes before organising, but larger, less frequent bribes after organising, with overall amounts remaining the same.c13e16efe631
All this suggests that, as with informal housing, sensible formalisation strategies for economic activities are highly context-specific and would most productively consider a differentiated set of activities that help reduce registration costs, expand legal protections and entitlements for the most marginalised participants, and support inclusive and accountable collective organisation of informal actors. In addition, support for segments of the formal sector that can help expand employment and economic choices for the informally employed can also be a viable strategy.1fe61206c29c
In sum, there are three main take-aways about the role of formalisation in addressing the pernicious impact of corruption. First, a narrow focus on formalisation is ill-attuned to the complex bricolage of the formal and informal in urban settings. Second, the design and success of differentiated formalisation strategies are context-specific, and benefits might primarily accrue to wealthier households and larger firms. Third, reducing exposure to and harm from corruption is not an automatic benefit of successful formalisation. Corruption exposure might go unaffected or even increase, and the modalities of corrupt rent extraction are likely to morph to adapt to the new situation. As a result, practitioners devising a sensible strategy to tackle the abuse of entrusted power need to carefully consider how such abuse manifests itself in a given context. They also need to consider how power abusers will seek to reassert practices of illicit rent extraction in any reconstituted mix of formal and informal institutional arrangements.
Technology to the rescue?
Can new technologies change the urban informality and corruption nexus for the better? A thorough discussion of this question goes beyond the scope of this paper, but it may be helpful to briefly consider three core urban technologies that directly relate to hotspots of urban informality and corruption.
Platform powers: Disrupting urban transport mafias?
In the Global North, platforms for ride hailing and flat sharing, to name just two examples, give what used to be informal social practices, or fringe businesses, a transformative reach, scale, and corporate model. Often branding themselves as technology providers rather than service operators, they follow business models that largely sidestep applicable regulations and worker protections in their markets, thus leading to what could be called a partial, temporary informalisation of the urban transport or hosting sector.92b86f2f18c8 In the Global South, however, where transport is characterised by a high degree of informality, these services might contribute to a partial formalisation of service provision, at least for the richer segments of the population who are the main users of platform-based services. Given a string of high-profile security and safety incidents, these businesses have begun to firm up their internal governance, putting in placer stricter vetting mechanisms for drivers and hosts, making pricing more transparent, and including client feedback in regulating service providers.
It is difficult to gauge the implications of these recent trends in terms of the potential for, or impact on, corruption. In the Global North, the financial muscle of globally dominant businesses, coupled with their demonstrated readiness to mobilise large numbers of customers along political lines,3b7e37e64c6a raises concerns about disproportionate influence when it comes to shaping transport policies in the public interest. In the Global South, some emerging practices could further formalise informal transport, notably taxation and vetting of drivers and offering them semi-formal recognition and enhanced economic security. This is currently being done for ride-hailing drivers in Bangalore, India, and for minibuses in Kampala on an experimental basis.aff0035a1201 But it remains to be seen how such initiatives develop amid the multiple vested interests and political and economic powers that collude to control informal transport in many cities.
Blockchain: A game changer for land management?
A distributed ledger is a database that is shared and synchronised across multiple sites, institutions, or geographies.0faaa84f189a Underlying distributed ledger technology, in many cases, is the blockchain, a cryptograhically supported architecture to protect against manipulative interventions. The terms blockchain and distributed ledger are often used synonymously. At first glance, the technology’s promise of radical disintermediation, sophisticated authentication, and tamper-proof document management appears to be ideal for improving urban land and property registries that are plagued by widespread fraud. But it is far from clear whether the use of distributed ledger technologies will have a transformational impact in this regard.
Building blockchains on top of what are often inconsistent and incomplete registries could codify existing inequalities and manipulations. And it could even further amplify these baked-in inequalities, if – as many formalisation experiences have demonstrated – it is primarily wealthier and knowledgeable citizens who avail themselves of such technology-enabled registration opportunities. Similarly, it is highly likely that the blockchain will follow the template of so many other technologies that have promised radical disintermediation but have then evolved into services that are administered through several layers of intermediaries, given that most users are neither able nor willing to operate such systems by themselves. This re-intermediation opens the door again to manipulative interventions and corruption by gatekeepers.
Finally, and most likely, the organisational requirements for data integration and migration that come with launching fully-fledged blockchains for land registries will be prohibitive in weak governance contexts. This suggests that more conventional e-government reforms that seek to digitise some aspects of land management – and have produced significant enhancements in service access and processing – might be a better bet.094c82bddf83
Drones and satellites: Sousveillance or surveillance?
Advanced satellite and aerial imaging technologies may get less attention than blockchain technology or platform companies, yet they might turn out to be the most helpful in advancing an inclusive urban integrity agenda. Satellite image analysis is becoming cheaper, more widely accessible, and more granular.3dae875bbae2 Satellite-based remote sensing is ideally suited for mapping urban growth, expansion, and development patterns,8b569a8c21ea and it can provide evidence for systematic, as well as individual, infringements of zoning and environmental regulations or unequal distribution of public infrastructure. Drones are also increasingly used for urban planning purposes. In the hands of activists, they can provide targeted analytical evidence and vivid images of specific claims about illicit luxury property developments behind thick walls or about environmental spills and hazards.
Most importantly, both technologies can be used by multiple stakeholders. Drones can, for example, be launched by non-governmental organisations, and satellite data can be procured and analysed by research collectives both inside and outside a country. This means that satellites and drones can help generate an alternative evidence base where official data are not publicly available or are subject to question. This can combat the opacity that fosters impunity and establish a new baseline of transparency for urban development and corruption issues.
Publicly exposing hard-to-map infrastructural inequality, such as skewed roll-outs of public infrastructure to politically connected districts, is insufficient to remedy these situations. But making such patterns visible can be a useful, at times necessary, step towards creating pressure for change. Satellite imaging has already helped map politically motivated power outages in Ghana,57fa670bdf4f ethnic patronage in slum upgrading in Nairobi,26e36d96e662 and local pollution hotspots tied to political connections in China.7512e327ab31 It has been instrumental in identifying building code violations in US cities2c7c7dd941fe and property tax evaders from Italy to Greece.be3e79c6f982 In Arusha, Tanzania, imaging has helped identify five times more buildings for taxation, resulting in a 75% increase in related tax collection.565e6ebca9d4 It has been found sufficiently cheap and granular to increase property tax collection in Kigali by a factor of 10.8f108419f7b3
There are clear prospects for further rapid advances in these technologies and their increased uptake in civil society work and research. Satellite and drone data combined with other data sources and collection exercises, such as GPS-based tracking of transport routes,7f89466e9cc4 can be expected to advance the urban integrity agenda. Such data collection offers opportunities to problematise and visualise the types of elite informality currently characterised by impunity and to validate government performance on infrastructure and public goods provision.
At the same time, some caution is in order. Political connections can still trump satellite-supported transparency. In China, for example, regulators hunt down building violations with powerful satellite monitoring capabilities, yet the best-connected developers continue to build golf courses in glaring violation of zoning rules.700ea5c20097 Moreover, the rapid creation of facts on the ground, in the form of sprawling developments preceded by illicit land grabs, might outpace regulatory enforcement even when sophisticated satellite monitoring is deployed. This has been observed in Turkish cities.ad9a4ee9d210 Perhaps most importantly, these intrusive technologies raise serious concerns about privacy-infringing uses. In the hands of corrupt governments or businesses, they offer novel opportunities to make grassroots informalities, from street vending to squatting, more legible, sanctionable, and exploitable for political and economic gain. More surveillance by the powerful will likely be a major feature of our urban future in both the Global North and South. Yet, more sousveillance – the distributed monitoring of entrusted power holders – also offers distinctive opportunities in cities around the world.b7e8b9786c01
From tipping points to entry points for interventions
Conventional theories of change underpinning many anti-corruption interventions hold that some societies are stuck in a high-corruption equilibrium. They suggest that what is needed is a big-push effort to reverse this dynamic and move the society beyond a ‘tipping point’ to achieve a low-corruption equilibrium. But another, increasingly influential strand of thinking in urbanism downplays the notion of equilibria and grand change projects. Instead, it construes the city as an organism whose dynamics are always adapting to changing circumstances, yet can be strategically influenced through a sort of urban acupuncture: small interventions that might trigger second- and third-order effects and so bring about transformational shifts.9f7324faf4f5
These two perspectives are not mutually exclusive, but thinking about acupuncture adds a useful complementary perspective on urban integrity building. It provides a more contextual and granular understanding of urban settings and an appreciation of tailored micro-interventions that can ripple outward and set in motion bigger change. This notion dovetails well with some of the nuanced empirical findings presented earlier. Social identities and political loyalties are more fluid and malleable than a cursory analysis might suggest. At macro-structural level, the complexity of urban political and economic systems makes them prone to fluctuations, shifts, bifurcated trajectories, and dynamic reversals.
What does this mean in terms of worthwhile micro-interventions that could help improve urban integrity? Identifying effective interventions is necessarily context-specific, requiring a full understanding of political, economic, and spatial dynamics in a particular locale. One promising type of micro-interventions that could potentially pave the way for new dynamics in urban power configurations relates to targeted transparency measures.
Selective transparency interventions: Budgets, contracts, interests, ownership
There are several blind spots in municipal transparency that, if filled, could help shine a stronger light on the conflicts of interests, dependencies, and ultimate beneficiaries of urban policies and resource flows. This ‘magic triangle’ of urban transparency would consist of accessible and timely public disclosure of information on:
- beneficial ownership of companies active in the local economy, and beneficial ownership of land and property holdings;
- municipal budgets and major contracts;
- the assets, incomes, and interests of senior civil servants and policymakers.
Actively enforced, these transparency measures would provide an essential step in understanding who benefits from urban policies and municipal spending. They would allow us to start identifying and tracking the interests that benefit from public contracts, specific infrastructure roll-outs, or urban development policies. Achieving meaningful transparency on all three fronts is a Herculean task. Yet, for all three pillars, reporting frameworks and disclosure templates are in place, and related norms, standards, and public expectations are becoming more demanding. There is a growing community of civil society organisations working on these issues, although so far mostly at national level.3d16bb2cb2f7 Even partial, poorly enforced implementation can make a difference. There are already documented cases in which such measures have revealed cronyism in the allocation of contracts or the hidden stakes that politicians have in specific policy decisions.b56ae7fe5f9a
Towards a rich tapestry of agency
As the empirical literature reviewed above suggests, making sense of the relationships between governance, urbanisation, and informality is best approached as a multi-disciplinary project. Scholarly research on urban informalities can accelerate critical introspection and evolution in anti-corruption thinking and action. Such research invites us to examine on a case-by-case basis the functional purpose of informality, its significance, and its relative legitimacy in the context of broader frameworks of economic and political governance. Such insights have begun to spill over into the governance research and policy community. The World Bank, for example, now urges a move from thinking primarily about the ‘rule of law’ to also focusing on the ‘role of law’.
Researchers and policymakers are developing a richer set of diagnostic instruments, institutional design options, and policy interventions intended to help discipline and democratise power. Deployed pragmatically yet creatively in service of a social justice agenda, these tools can help direct urban integrity policy interventions towards promising avenues for reform.
The political settlements approach applied to cities provides a good starting point for sharpening the analytical focus on power. It is important to not give in to what Tucker3020d32c9889 describes as ‘a tendency to reify power as an unassailable capacity held by a small number of conspiratorial actors.’ At the same time, great care is needed to ensure that new institutional reforms do not simply reproduce existing power relationships. Indeed, ‘If both designing new institutions and working with the grain of socially embedded institutions serves to reproduce inequalities of power, then what are the possibilities of fashioning more socially just and effective’ forms of governance?f3c241f63773
As the large body of work on urban issues makes clear, agency is possible and arises in many, at times unexpected, places. Urban ethnographers find instances of agency against all odds in even the most marginalised and informal urban situations. These include what Lindellf0b80ac4931a describes as ‘strategies of invisibility,’ ‘tactics of avoidance,’ and ‘everyday social practices [that] are deliberately masked, dissimulated and made opaque’ in ways that render them invisible and hard to exploit by corrupt bureaucrats or businesspeople. Other observers have noted the ‘myriad daily practices of resistance, characterised by small-scale individual actions,’ ‘not a politics of protest, but of redress’,4ef004121eaf and the ‘quiet encroachment of the ordinary’ – ‘the silent, protracted but pervasive advancement of the ordinary people on the propertied, powerful, or the public in order to survive and improve their lives’.143442d9c559
Moving towards more overt and organised forms of agency and voice, many accounts document the diverse forms of collective action and organisation that informal actors have undertaken. Self-help organisations of the urban poor have over time taken on rights-based agendas and advocacy functions. Informal workers, from home workers to street vendors to transport providers, have organised at varying levels: neighbourhood, city, national, and even international.46fd32c08455
Finally, at the most assertive end of the spectrum, the urban poor and marginalised are making claims that go beyond the ‘invited spaces of citizenship’e00fd3485623 permitted and controlled by conventional governance. This type of ‘insurgent citizenship’ or ‘urbanism from below’ includes the tested tactics of strikes and civic disobedience, as well as more aggressive protest forms such as occupations, sabotage, civil unrest, and guerrilla urbanism.9cb07ac91b62 All these forms of protest seek to shake up settled expectations about the proper, the just, and the justifiable in urban environments.
These multiple types of agency and voice are often deployed simultaneously or fluidly,139457736e6f leading Daviscc3d9b6426c7 to describe informality as ‘a means of enacting citizenship.’ The result is a rich tapestry of agency, but one that should not be romanticised or overestimated. The challenges involved in confronting entrenched political machines and economic extraction rackets are daunting, and the risks of co-optation, internal corruption, and discriminatory pursuit of self-interest are all too real.
- UN 2018b.
- UN 2018b; Post 2018.
- Author’s calculations based on UN (2018) and ILO (2018).
- Author’s calculations based on data from World Development Indicators for 2018 and Transparency International’s Corruptions Perception Index 2019.
- ILO 2018.
- Fichtmüller 2017.
- Roever and Skinner 2016.
- Cervero and Golub 2007.
- Auriol and Blanc 2009.
- Satterthwaite 2016.
- See World Health Organization (WHO) Global Health Observatory, Access to piped water.
- Jütting and de Laiglesia 2009; World Bank 2017.
- Lall, Henderson, and Venables 2017.
- Ren 2018.
- Monkkonen 2016.
- Lall, Henderson, and Venables 2017.
- Durst 2019.
- Ren 2018.
- Buckley, Kallergis, and Satterthwaite 2018.
- UN 2018a.
- For a more detailed account see Zinnbauer 2013.
- Wirth 1938; Post 2018.
- Liu and Vortherms 2018.
- Goodfellow 2018; Dodman et al. 2017.
- Post 2018; Patterson and Caldeira 1983; Resnick 2014; Auerbach 2016; Auerbach and Thachil 2018.
- Gerring et al. 2015; Majumdar, Mani, and Mukand 2004.
- Goodfellow 2018.
- IPCC 2014.
- See LSE Cities research reported in The Guardian.
- Quoted in Fairbairn 2013.
- Guha-Khasnobis, Kanbur, and Ostrom 2006.
- Autio and Fu (2015), for example, find that formal economic entrepreneurship is positively associated with good governance attributes in 18 countries in Asia-Pacific, while Johnson et al. (1997) find a reinforcing dynamic between weak governance and informal economic activity in transition countries.
- Adisa, Alabi, and Adejoh 2018.
- Fjeldstad, Kolstad, and Nygaard 2006.
- Lavallée and Roubaud 2018.
- Alfers et al. 2016.
- Quoted in Human Rights Watch 2013.
- Quoted in Alfers et al. 2016.
- Holland 2015.
- Saha 2011.
- Monkkonen and Ronconi 2016.
- See below for a more systematic exploration of rent extraction schemes in informal urban settlements.
- Unpublished data come from an analysis of Transparency International’s Advocacy and Legal Advice Centres in 14 countries, primarily located in Africa and the Asia-Pacific region.
- Monkkonen and Ronconi 2016.
- Source: Author’s calculation based on data from Transparency International 2013 and UN 2018b.
- Monkkonen 2013.
- World Bank 2018a.
- World Bank 2018a.
- Quoted in Doshi and Ranganathan 2017.
- This refers mainly to a body of ethnographic work on how corrupt exchanges are organised in practice via brokerage and other strategies (see, for example, Jancsics 2015; Baez-Camargo and Ledeneva 2017).
- Quoted in Goodfellow 2016, p. 7
- Quoted in Migiro and Mis 2014
- Chitere 2004; Klopp et al. 2014; Munene 2013.
- Key informant interview quoted in Goodfellow 2016, p. 7.
- Gandy 2006.
- Herrera 2014.
- Collignon and Vézina 2000.
- Kooy 2014; Lovei and Whittington 1991; Graham, Desai, and McFarlane 2013.
- Hirvi and Whitfield 2015.
- Graham, Desai, and McFarlane 2013.
- Cooper 2011.
- Ranganathan 2014.
- Beall, Fox, and Gazdar 2010.
- Fox 2014; Gulyani and Talukdar 2008.
- It should be noted, however, that the motivations in this context might not necessarily be corrupt, but could also be welfare-oriented.
- Holland 2016.
- Casanegra de Jantscher 1990.
- Scott 1969, p. 1142.
- Boone 2009; Onoma 2009; Collier 1976.
- Baslevent and Dayoglu 2005.
- Buğra and Keyder 2006.
- Min and Golden 2014.
- Resnick 2013.
- Carpenter and Moss 2013.
- E.g., Post 2018; Auerbach 2016.
- Roy 2011.
- Potts 2008.
- Khan 2010.
- Bland 2018; Ng 2018; Sun 2015; Yardley 2013; Dhaka Tribune 2018.
- Murray and Frijters 2015.
- Soni 2000; Doshi and Ranganathan 2018; Moatasim 2019.
- Hudalah, Winarso, and Woltjer 2016.
- Transparency International UK 2015.
- Goodfellow 2017.
- Transparency International 2013.
- The term bricolage in institutional thinking is rooted in the work of Lévi-Strauss (1962) and Douglas (1973) and has been most prominently adopted in accounts of informality by Cleaver (2002) and Cleaver et al. (2013).
- Monkkonen 2016.
- Zhang and Zao 2018.
- Larreguy, Marshall, and Trucco 2015.
- Lall, Henderson, and Venables 2017.
- Saha 2011.
- Anjaria 2011.
- Hummel 2018.
- McCulloch, Schulze, and Voss 2010.
- De Mel, McKenzie, and Woodruff 2012.
- Prichard 2010.
- Joshi and Ayee 2008.
- Jaramillo 2009.
- Joshi, Prichard, and Heady 2014; Kamunyori 2007.
- For related dynamics in conflict-afflicted contexts, see Schomerus and Titeca (2012) and Titeca and Kimanuka (2012).
- Hummel 2017.
- Itikawa 2010, referenced in Hummel 2017.
- Jaramillo 2009.
- Potts 2008.
- Ferreri and Sanyal 2018.
- Surie and Koduganti 2016; Evans, O'Brien, and Ch Ng 2018.
- Culpepper and Thelen 2018.
- Majaski 2019.
- World Bank 2018b.
- Glaeser et al. 2018.
- Donaldson and Storeygard 2016.
- Ali, Deininger, and Wild 2018.
- Lall, Henderson, and Venables 2017.
- Casaburi and Troiano 2015.
- Nichols 2010.
- Jia 2017.
- Marx, Stoker, and Suri 2019.
- Min 2019.
- Williams et al. 2015.
- Mann and Ferenbok 2013.
- Bozçağa and Holland 2018.
- Sun 2015.
- Lerner 2014.
- See, for example, the case of US politician Sheldon Silver, in which filed income declarations critically informed investigations (New York Times 2015). In Iceland, incomplete asset declarations led to the resignation of a prime minister (Guardian 2016).
- On beneficial ownership transparency more broadly, see the website of the civil society coalition Open Ownership. On transparent property ownership, see, for example, cases in the UK (Pegg 2018) and Germany (Transparency International Germany 2018). An example of diagnostic work on subnational budget transparency is the International Budget Partnership’s Subnational Open Budget Survey. On transparency in open contracts, including case studies at city level, see the website of the Open Contracting Partnership. For a summary of initiatives and resources for asset, income, and interest disclosure, see Transparency International (2015).
- Meagher and Lindell 2013, quoting Cleaver et al. 2013.
- Bayat 2004.
- Lindell 2010.
- For a summary of related studies, see, for example, Hummel (2017).
- Debord 2012; Sadler 1999; Finn 2014.
- Cornwall 2002.
- 2018, p. 365.
- See, for example, the case study of claim making by market vendors in Kampala by Lindell and Ampaire (2016).
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