Tuesday, August 9, 2011
Welfare Expenditures and Slums
The following quote appears in the UN's 2003 report, Slums of World.
There is evidence over the last decades, some nations have raised public expenditures on social and basic services as a percentage of Gross Domestic Product (GDP), which suggests there might be an improvement on slum conditions.
Do increases in welfare expenditures necessarily help the people living in slums? I would argue no. Here are some reasons:
There is evidence over the last decades, some nations have raised public expenditures on social and basic services as a percentage of Gross Domestic Product (GDP), which suggests there might be an improvement on slum conditions.
Do increases in welfare expenditures necessarily help the people living in slums? I would argue no. Here are some reasons:
- The money may never make it to the slums (in any form).
- The money may be spent on services that the slum dwellers do not want or need.
- If the conditions in the slum do indeed improve in the short-run, then more people will flock to the slum, and there will be more over-crowding, possibly leading to even worse conditions.
I am not arguing that these expenditures definitely will not improve conditions for individuals living in slums. I merely am pointing out that it should not be assumed that these expenditures will definitely improve conditions. Such an assumption could lead to very poor policy making decisions. Imagine a scenario in which the slum is growing as a result of the government providing services to the slum. This would lead to a higher cost of the services, and we have entered a spiral of increasing costs.
# posted by Gavinomics : 5:06 PM
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