Department for International Development Drivers of Urban Change
 entry page home framework offical documents site map viedo
Urban development finance
Informal economy
Labour market
Innovative financial mechanisms
Globalisation & SAPs
Urban - rural interactions
Participatory budgeting
Transparency & Corruption
Community activitism & CBOs
Democracy & empowerment
Participatory processes & tools
Social inclusion
Urban livelihoods
Violence & Human rights
Health Children & Education
Culture & Identity
Shelter & Settlement
City planning
Land tenure
Basic infrastructure
Appropriate technology
Transport & Mobility
Environmental planning
Health hazards & Pollution
Local Agenda 21

URBAN ECONOMY | Informal Economy

The documents here collated discuss the theme of informal economy including measures to provide recognition of rights, regularisation of land and informal housing developments and street trading. In this section are also discussed matters related to conflict and confrontation over space use.

quick links

local level city level
  international level websites

local level

Grundström, Karin & Laura Like (2001) - Coping in Costa Rica - May 2001 ESF / N-AERUS Workshop [pdf]

Costa Rica - FUPROVI (Fundación Promotora de Vivienda) a Costa Rican NGO, has been developing a self-help housing construction scheme that has been implemented in numerous urban settlements during the last 15 years. Their work is based on helping people help themselves by providing them the means of getting access to the formal sector of society -governmental housing subsidies and services of commercial banks.

Kagawa, Ayako (2001) - Policy Effects and Tenure Security Perceptions of Peruvian Urban Land Tenure Regularisation Policy in the 1990s - May 2001 ESF / N-AERUS Workshop [pdf]

Peru - A questionnaire based household survey and interviews were carried out in informal settlements in Metropolitan Lima in 1999 and 2000. Based on the different consolidation aspects of legal, social, physical and economic developed in the conceptual framework, variables were collected and indicators were generated. The main finding through this household survey was that whilst there is a strong link between legal and physical consolidation, there is a weak link between legal and economic, especially that of access to credit. The survey highlights the need to create a follow-up mechanism that can accentuate the consolidation process after legal consolidation.

Riley, Elizabeth (2001) - A Portrait of 'Illegality and Informality': the favela of Pavão-Pavãozinho and the perceptions of its residents - May 2001 ESF / N-AERUS Workshop [pdf]

Brazil-This paper explores the manifestations and meanings of illegality and informality within one squatter settlement or favela in the city of Rio de Janeiro, Brazil. That favela is Pavão-Pavãozinho, a settlement of around 10 thousand people occupying a steep hillside in the wealthy neighbourhood of Copacabana.

city level

Bentinck, Johan & Shilpa Chikara (2001) - Illegal factories in Delhi: the controversy, the causes, and the expected future - May 2001 ESF / N-AERUS Workshop [pdf]

India - There over 100,000 mostly small unauthorised units located in residential areas: many of them highly polluting chemical, metal, asbestos, rubber, and plastic factories. Originally, these factories were established in and around urbanising villages, where the land-use regulations are less strict. Since, many of these industrialised villages have been incorporated into the city, and many slums inhabited by factory labour have mushroomed around it.

Fernandes, Edesio (2001) - Regularising informal settlements in Brazil: legalisation, security of tenure and city management - May 2001 ESF / N-AERUS Workshop [pdf]

Brazil - The paper discusses the advantages of innovative land tenure policies for the promotion of security of land tenure in urban areas in Brazil vis-a-vis traditional legalisation policies in which full freehold titles are recognised. For the assessment of the efficacy of the tenure policies adopted in the four case studies, the following aspects have been considered: promotion of sociospatial integration; impact on the land market; access to (formal and informal) credit; perception of security of tenure; gender implications; and impact on poverty eradication policies.

Mathema, Ashna S. (2001) - Housing and land markets in Kathmandu, Nepal - May 2001 ESF / N-AERUS Workshop [pdf]

Nepal - Increase in demand for urban housing in the latter half of this century had led to the emergence of housing as a priority sector for many national governments and public authorities around the globe. While not all informal settlements provide unsatisfactory living conditions, they are usually inadequately served with essential infrastructure.

Melé, Patrice (2001) - Protection de l'environnement, illégalité et division sociale de l'espace urbain à Monterrey - May 2001 ESF / N-AERUS Workshop [pdf]

Mexico - Les références à la protection de la nature sont le plus souvent mobilisées pour stigmatiser des formes d'urbanisation populaires. Cependant, une recherche sur la ville de Monterrey permet d'illustrer une modalité différente des relations entre qualifications environnementales et division sociale des espaces de la croissance urbaine. Ce texte se proposent d'étudier les formes de production de l'illégalité liées à des qualifications juridiques environnementales et leurs impacts sur la division sociale de l'espace urbain.

Ochieng, Crispino C. (2001) - Illegal Development in the Face of Planned Komarok Housing Program in Nairobi - May 2001 ESF / N-AERUS Workshop [pdf]

Kenya - In the research factors that could lead to development within an originally planned neighborhood of both illegal and informal built environment are identified and their causes discussed. This paper shall argue that most of the housing developments that are currently being witnessed within the planned face of Komarok housing estate are informal and thus illegal. The paper shall seek to argue that in spite of their character, they are an important part of urbanism and that should be recognized.

international level

Apuzzo, Gian Matteo (2001) - Urban communities and participation in the XXI century: the informal urban century - May 2001 ESF / N-AERUS Workshop[pdf]

The paper tries to analyse urban community future and popular participation in informal urban realities. Community-based processes can be an fundamental element to copy with informality and illegality. Two aspects must be solved: what does participation mean in urban reality of the cities of the South? How can participation be structured in a reality based on self-help?

Berner, Erhard (2000) - Learning from informal markets: Innovative approaches to land and housing provision - May 2001 ESF / N-AERUS Workshop [pdf]

Substandard and insecure housing conditions are recognised as a crucial aspect of urban poverty. In most large cities in the developing world, the formal market serves only a minority of the population. Based on Pal Baross's argument, the paper states that the conventional sequence of Planning-Servicing-Building-Occupation is a key factor in both market and state failures. The paper introduces the Philippines' 'Community Mortgage Program' and Hydarabad's incremental development scheme 'Khuda ki Basti' as best practices in this direction.

Durand-Lasserve, Alain & Jean-François Tribillon (2001) - Coping with Illegality in Human Settlements in Developing Cities - May 2001 ESF / N-AERUS Workshop [pdf]

In this paper emphasis is deliberately placed on the issues of illegality in human settlements. These issues seem to us more important than the question of informality. This latter question has already given rise to an large quantity of literature over the last two decades. For at least three decades - that is to say since the expansion of "irregular" settlements has been perceived as a lasting structural phenomenon - the debate on housing policy insistently refers to the question of the illegality of human settlements, without reaching any satisfying solution. For a long time it appeared that, in order to get rid of this problem, it would have been sufficient to combine measures of repression of illegal occupations, prevention measures legal tenure regularisation and large-scale programmes of land delivery to the poor. The results have been limited and disappointing.

Gossé, Marc (2001) - Informalité, illégalité…modèles de gouvernance? - May 2001 ESF / N-AERUS Workshop [pdf]

Nous voudrions réaffirmer qu'il n'y a rien d'informel (sans forme) dans l' "informel" et rien d'illégitime dans l' "illégal "et qu'il s'agit au contraire de reconnaître et de contribuer à consolider les moyens de développement durable des populations urbaines défavorisées, en même temps que de combattre les pratiques formalisées, légalisées de la spéculation, de la corruption et du détournement sous toutes ses formes, qui sont le fait d'acteurs politiquement illégitimes.


Habitat Agenda

Section IV C - Chapter 9: Improving urban economies

Par. 160 (c) Encourage fair treatment of the informal sector, promote the use of environmentally sound practices and encourage links between financial institutions and non-governmental organizations that support the informal sector, where it exists.

[Whole Chapter [pdf]


Documents highlighting DFID's published work in the field of informal economy and its impact on people living in urban areas:

"Managing Informal Street Traders in Mexico city" - Wakely, Patrick; Nicholas You (2001) – Implementing the Habitat Agenda: In Search of Urban Sustainability - DPU [pdf]

Mexico - Reorganising Mexico City's 100,000 street traders was among the priorities of the first democratically elected city government (1998-2000). A new programme developed under this government focused on managing street traders through administrative changes at local level, citizen participation, constructing good relations between public officials and street traders, and resolving congestion in some specific zones.

"Cuba-Urban Agriculture" Allen, Adriana; Nicholas You (2002) – Sustainable Urbanisation: Bridging the Green and Brown Agendas – DPU [pdf]

Cuba - In the early 1990s Cuba faced an economic crisis, with emergency food shortages in cities, rising food prices and a growing black market. Fruit and vegetables, even when produced in plenty in the country, often rotted in fields and warehouses because transport and distribution systems were also in crisis. Today food is more available, prices have fallen and quality has improved. To an great extent this results from a government policy of supporting urban and peri-urban agriculture at a community level.

"The Informal Economy Policy Framework in Durban" - Ibid. [pdf]

South Africa - Durban has set out on a process of policy making to support its informal economy. This has entailed elaborating a vision for the role of the informal economy in long-term economic plans, turning that vision into policy, and setting up an implementation strategy with institutional structures. A crucial element for this policy process has been strengthening organisations of informal traders so that the government has strong partners with whom to negotiate.

2003 Development Planning Unit | Sikandar Hasan | Anna Soave | Khanh Tran-Thanh || Tina Simon