Cities will be home to 2 billion new residents by 2045. Accommodating this growth will require large-scale development of land in and around urban areas. For lower‐income cities, this will be challenging since they tend to grow through slums and other informal settlements. Along with a lack of adequate and equitable access to public services and economic opportunities, slum residents are more vulnerable to diseases, especially highly communicable ones such as COVID-19, and they are likelier to bear the brunt of natural disasters associated with using land that is environmentally sensitive, unprotected, or more susceptible to disasters. In 2014, an estimated 880 million urban residents lived in slum conditions, compared with 792 million in 2000 (UN 2019). This number is likely to keep growing unless urban spatial expansion is planned and managed well.
IEG recently assessed the World Bank’s support to client countries on managing urban expansion, particularly through its work on land administration, land‐use planning, and land development. These three key factors determine how urban areas grow.
Land administration is the process of establishing, recording, and disseminating information about the ownership, value, and use of land and its associated resources. Making available such fundamental reference information through wider records systems is key towards recognizing a continuity of property rights and ensuring the security of tenure. This, in turn, will motivate households to invest in dwellings and contribute towards creating functioning land markets, which are crucial for the development of cities.
World Bank support to land administration is successfully strengthening property rights through land titling, which contributes to land market development. However, countries eligible for IDA, the World Bank’s fund for the poorest countries, have faced challenges with land titling and land records data management systems, which, in turn, affects their ability to develop land markets. This is partially due to limited technical capacity locally and issues related to political economy. Government planning and policies regarding land administration may not be sufficiently adapted to the local context, including the diverse and, sometimes, conflicting political and economic incentives and motivations that are at play at the local level. The political economy around land administration laws is often complex, and the time taken to reform them typically goes beyond the duration of related projects, and at times, political cycles.
Land-use planning helps regulate the use of space, focusing not only on the physical aspect, but also the economic functions, social impact, and the location of different activities within the urban environment. One of the critical functions of land-use planning is the allocation of land to private and public uses, including infrastructure and services. World Bank support to clients on land-use planning has generally been successful, but it rarely supports implementing land-use planning tools that focus on preventing the emergence of new slums or informal areas. This is critical to managing urban spatial growth. The Bank has been encouraging the establishment of independent planning agencies, which help develop preventative approaches, but it has not provided the operational support that is needed for such agencies.
Land development is the transformation of land through investments and this evaluation assessed it through two components: first, urban upgrading, which is the improvement of conditions in existing slums and preventing the growth of new ones, and second, urban transport, which includes integrating transportation with land use. These components shape how land is used and how its use evolves over time, in turn, defining how productive and inclusive cities will become in the future.
World Bank support to land development has been generally successful, but Bank projects on urban upgrading have tended to focus on upgrading existing slum areas and improving the access of slum-dwellers to infrastructure and housing. It has focused less on preventing the emergence of new slums and informal areas. On urban transport, because of the traditional focus on mobility and access, the Bank’s support does not systematically consider land prices and land markets. Excluding land market assessments from urban transport projects leads to underestimating the total economic benefits of these projects as well as not fully accounting for the benefits and opportunities that an increase in the value of land offers to various income groups, especially those from lower-income segments.
There is also a lack of systematic geolocation of the World Bank’s investments, which further limit the Bank’s ability to support countries in assessing changes in land use, increases in land values, and the associated distributional impacts.
Lessons learned and way forward
There are three specific areas where the World Bank can enhance its support to countries in managing their urban spatial growth.
- Adopting a framework that links determinants of urban expansion with strategies for managing it, in an integrated way: The framework could act as a reference for the design and delivery of the Bank’s lending and analytical work on urban spatial growth. The framework could reflect the approach of the Planning, Connecting, and Financing Cities report, the World Bank Group housing framework, the transport-oriented guidelines and recent findings from Pancakes to Pyramids: City Form to Promote Sustainable Growth report.
- Adopting preventive approaches in addition to curative ones: This could be done by securing rights of way and financing basic infrastructure in emerging neighborhoods to accommodate new urban dwellers. The World Bank should support the use of public transit, walking, and cycling as primary modes of transportation. It should also expand the use of land‐based planning tools and approaches, such as scenario planning, which is a process to support informed decision-making helping urban planners navigate future uncertainties.
- Identifying and recording precise project locations and collecting land market data: The World Bank should strengthen its data collection protocols and increase the use of technologies such as the Geo‐Enabling Initiative for Monitoring and Supervision and the Smart Supervision Application. It should also improve the collection of land market data, including mainstreaming land market assessments in World Bank investments in urban areas.
When countries manage well the factors that determine urban expansion, it can lead to fewer slums, efficient and resilient use of land, functioning land markets, and integrated urban transport systems. These, in turn, will ensure that the expansion in urban areas occurs in ways that are sustainable, efficient, and equitable.
The World Bank Group will need to adopt new approaches, frameworks, and technologies that enhance its ability to support clients, especially IDA countries, on urban expansion. This will contribute directly to Sustainable Development Goals 1 and 11, which address the need for equitable, inclusive, and sustainable use of and access to economic resources, including land, and will help the World Bank Group respond more effectively and efficiently to the twin goals – poverty reduction and shared prosperity. In addition, this will also support countries in managing their urban expansion in ways that consider the infrastructure and services that are needed to help them be more resilient towards chronic stresses and future shocks, such as pandemics and natural disasters. This will facilitate the World Bank Group’s goal of green, resilient, inclusive development.