Thursday, September 10, 2009

Urbanisation and health

A recent paper Urbanization — An Emerging Humanitarian Disaster warns that the health of people in fringe urban slums is poor and subject to various risks. Since most of future global population growth is likely to be in cities, this massive increase in a very at-risk group has serious health implications.

One of the vast changes from the industrial revolution has been urban life becoming safer than rural life. Until the development of modern sewerage, understanding of hygiene, vaccinations, etc, cities typically had death rates higher than their birth rates and could only maintain or increase their populations via regular influx from rural areas. If such influx stopped for any reason, cities would shrink.

The paper uses infant mortality rates for Kenya (one of the better-run sub-Saharan African states) as an example of risk factors. The rates (in deaths per 1000 infants) are:
Rural: 113
Urban (excluding Nairobi): 84
Nairobi: 62
Clearly, in general, Kenyan cities are safer for new-born infants than country life. This, of course, constitutes a powerful reason to move to the cities.

But the grim statistics contrast the infant mortality rate in high-income areas of Nairobi with the informal settlements:
High income: <10
Informal settlements: 151
The “informal settlements” have infant mortality rates 15 times those of the high-income parts of Nairobi and about a third higher than rural Kenya.
The term informal settlements flags a key issue. The tendency of those with power to discriminate against newcomers is a major problem in urban policy around the world. In developed countries, such as Australia, it is regulatory control of land supply creating increased house prices. In developing countries, it is a failure to provide useful property rights at all.

This can be due to excessively complex and poorly adjudicated land laws, as in Bangalore in India where the Indian state is so incompetent in its administration of land law that there is effectively a black market in establishing and adjudicating land ownership. Or it can be because the state cannot be bothered to provide any useful avenue at all for allocating property rights. Either way, the settlements are “informal” because they have no formal status and so cannot enter into arrangement that require formal status, whether market arrangements or political arrangements. In the words of the urban health paper:
These slums, which are making up an increasing proportion of growing cities, lack not only most basic government services but also political recognition; as a result, so do their inhabitants. These residents are usually tolerated and their presence tacitly accepted, but the local government generally ignores them, accepting no responsibility for accounting for them in planning or the provision of services.
Peruvian economist Hernando de Soto, and his Institute Liberty and Democracy, has pushed this issue of formal recognition and clear property rights for many years. (He has some striking comments on financial derivatives as a property rights failure.)

People in these informal settlements have economic property rights. But, without legal sanction, they cannot use any service or transaction that requires legal support and cannot legally protect what they have. This not only denies them access to basic services, it also denies them access to financing or any transactions other than of a “bazaar” (immediate swap) variety. Their assets become trapped as things they control but do not own. They are left with their labour as their sole income source in a situation where there is a huge supply of similar labour and they are highly vulnerable to coercion or other forms of predation. The lack of clear and enforced property rights is not a trivial issue.

Moreover, they live without the typical support networks they have left behind in moving from rural living to urban slum life. In the words of the urban health paper:
Though in most countries health care is more limited in rural than in urban areas, the urban environment may lack health support often provided in rural settings while also posing new risks. For example, for women and children, the rural environment provides a community of kinship that often ensures physical safety, food security, and the availability of child care. Without these safeguards, many women’s mobility is limited in urban areas. Mobility and child care assistance from more experienced women allow mothers to perform two of the three steps that are theoretically fundamental to health care utilization: identifying illness and seeking care (the third being delivering care).
The higher infant mortality rates of informal settlements make, alas, perfect sense.

This property rights non-coverage persists because power-holders are not sufficiently motivated to do anything about it. Formal recognition would require foregoing the opportunities for corruption high levels of official discretions create, they would reduce the advantage of the incumbent elite in access to decision-makers and formal recognition of their assets, they would require a much higher level of genuine service by the state and resiling from some of the grander pretensions of government.

Which is not so far from why regulation-induced constraint of supply persists in developed countries such as Australia: incumbent homeowners like the higher values for their houses, it induces a higher level of political donations (licit or illicit) by developers to gain access to decision-makers, it reduces infrastructure demands on government and protects pretensions to be able to "fairly" control urban growth in an “environmentally sound” fashion.

There is, however, a very big difference between official discretion over land use compared to lack of effective property rights and any formal recognition. A difference measured in infant mortality rates of 151 per 1000—in one of the better-run developing countries. But that dramatic difference is also a point Hernando de Soto has been making for quite a while.

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