BREAD Working Paper No. 523, September 2017

Planning Ahead for Better Neighborhoods: Long Run Evidence from Tanzania

Guy Michaels, Dzhamilya Nigmatulina, Ferdinand Rauch, Tanner Regan, Neeraj Baruah, Amanda Dahlstrand-Rudin


What are the long run consequences of planning and providing basic infrastructure in neigh- borhoods, where people build their own homes? We study “Sites and Services” projects imple- mented in seven Tanzanian cities during the 1970s and 1980s, half of which provided infrastruc- ture in previously unpopulated areas (de novo neighborhoods), while the other half upgraded squatter settlements. Using satellite images and surveys from the 2010s, we find that de novo neighborhoods developed better housing than adjacent residential areas (control areas) that were also initially unpopulated. Specifically, de novo neighborhood are more orderly and their build- ings have larger footprint areas and are more likely to have multiple stories, as well as connections to electricity and water, basic sanitation and access to roads. And though de novo neighborhoods generally attracted better educated residents than control areas, the educational difference is too small to account for the large difference in residential quality that we find. While we have no natural counterfactual for the upgrading areas, descriptive evidence suggests that they are if any- thing worse than the control areas.

Keywords: Urban Economics, Economic Development, Slums, Africa

JEL Codes: R31, O18, R14

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