offer the cost-reducing advantages of agglomeration economies and economies
of scale and proximity as well as numerous economic and social externalities
(e.g., skilled workers, cheap transport, social and cultural amenities), the social
costs of a progressive overloading of housing and social services, not to mention
increased crime, pollution, and congestion, can outweigh these historical
urban advantages. Former World Bank president Robert McNamara expressed
his skepticism that huge urban agglomerations could be made to work at all:
These sizes are such that any economies of location are dwarfed by costs of congestion.
The rapid population growth that has produced them will have far outpaced
the growth of human and physical infrastructure needed for even moderately efficient
economic life and orderly political and social relationships, let alone amenity
for their residents.2
Along with the rapid spread of urbanization and the urban bias in development
strategies has come this prolific growth of huge slums and shantytowns.
From the favelas of Rio de Janeiro and the pueblos jovenes of Lima to the
bustees of Kolkata and the bidonvilles of Dakar, such makeshift communities
have been growing rapidly. Today, slum settlements represent over one-third
of the urban population in all developing countries.