Africa’s demand for urban housing is soaring, even as it faces a proliferation of slums. In this setting, can modest infrastructure investments in greenfield areas where people subsequently build their own homes lead to better quality neighborhoods in the long run? We study "Sites and Services" projects implemented in seven Tanzanian cities during the 1970s and 1980s, and we compare greenfield areas that received basic infrastructure investment (de novo areas) to geographically proximate greenfield areas that did not (control areas). Using satellite images, surveys, and census data from the 2010s, we find that de novo areas developed into neighborhoods with much better housing quality. Specifically, de novo neighborhoods are more orderly and their buildings have larger footprint areas and are more likely to have multiple stories and better amenities, due not only to the persistence of initial investments but also to private complementary investments. We also document the role of sorting of owners and residents, which only partly accounts for the differences in housing quality across neighborhoods. Finally, we study initially squatted areas that were also upgraded as part of “Sites and Services”, and our descriptive evidence suggests that they are now if anything worse than the control areas. We conclude that preemptive infrastructure investments can lead to neighborhoods with significantly better housing in the long run.
A large share of a nation’s capital stock is in its buildings. Kenya’s largest city, Nairobi, is rapidly reconfiguring its built capital and doing so in astonishing quantities – a process that comes overwhelmingly with issues of land market informality. Interesting questions arise in such a context. How does the built environment of a city evolve? Is there a role for slum-style building technology in effective urban development? What are the costs of informality and poor institutions in land markets? In this paper we provide both novel empirics and develop a theoretical framework to answer these types of questions.
The world is routinely photographed from space on a vast scale. This abundant source of information can help answer economic questions that have been, until now, hindered by a lack of suitable data. How can economists put highly detailed daytime photographs to use? This question is only now beginning to be answered leaving tremendous potential for the future.