Monday, December 21, 2009

"The trouble with markets is..." unintended consequences in slum resettlement

The last para of this article is a sobering reminder that markets don't always behave as we expect them to. I've heard of similar experiences in Sri Lanka too. Nothing wrong with it in principle, right, with individually profit-maximizing actors/families. Just doesn't move people out of the slums for long. Maybe some of them are used to conditions well enough to much prefer tolerating the slum while enjoying an additional (year-round, stable) stream of income. I'd even guess (there must be research on this) that many slums spring up because they're the cheapest accommodation close to certain labour markets.

I remember driving past Kibera while working on the automation of the Nairobi Stock Exchange's Depository & Settlement System. I also remember wordlessly watching from my electric-fence-and-guard-dog -protected flat window the silent flood of humanity that begins at the crack of dawn as low-wage workers start their sometimes hours-long treks in to work, too poor even to afford a matatu bus/minivan.

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