Slumonomics

It is important to point out that the conditions in several of the slums may have changed significantly since 2005.  Slums and shanty towns are constantly changing for many reasons.  Governments have be known to burn slum areas and to evict people, while in some cases (however rare) governments have attempted to improve conditions in slums.  The most successful way to improve conditions in slums is essentially to give the people living in the slums incentives to try to improve the conditions in which they live on there own.

All actors in any society will attempt to improve the conditions in which they live.  This is the nature of human action.  This fact is no different amongst people living in slums.  If people living in slums believe that the local government intends to evict them or burn them out, then they will have very little incentive to invest in the production of capital goods that do not allow for immediate consumption.  For example, a man living in a slum might want to add plumbing to his residence.  This is an undertaking that would require planning and several stages of production before the plumbing could ever actually be enjoyed.  If the man believes that there is a high probability that he will be evicted, or his house will be destroyed, then he will be much less likely to invest in such a production process. 

For a detailed discussion on the influence of expectations of government action on individuals behavior see:

Storr, Virgil and Chamlee-Wright, Emily.  "Expectations of government's response to disaster ." Public Choice, 144 (1-2) 2010.