Understanding Urban Poverty; What the Poverty Reduction Strategy Papers tell us

This document is an output from a project funded by the UK Department for International Development (DFID) for the benefit of developing countries. The views expressed are not necessarily those of the DFID. It is one of two papers prepared with the support of the UK Department for International Development under a research contract for "Seeking more accurate and inclusive measures of urban poverty" (contract No: 8131). The other paper is on The Underestimation of Urban Poverty in Low and Middle-income Nations by David Satterthwaite and, like this one, is available as a published working paper from also works on urban poverty issues within the Centre for Chronic Poverty and the Centre on Regulation and Competition at IDPM. She is a member of the editorial board of Environment and Urbanization and is the editor of HiFi News, a newsletter on innovations in housing finance. SUMMARY This paper reviews 23 Poverty Reduction Strategy Papers (PRSPs) to consider how they define and measure urban poverty and thereby assess the extent to which they consider urban poverty. Nearly all PRSPs have a strong emphasis on the relative importance of rural poverty. However, many appear concerned that their poverty estimates do not fully represent the situation with respect to urban poverty. Their narrative texts complement their quantitative estimates in a number of ways, suggesting that there may be serious " pockets of poverty " within urban areas, that urban poverty may be increasing and that inequality may be higher in urban areas than in rural areas. Part of the difference in opinions regarding the scale and depth of urban poverty in the PRSPs relates to the differences in how poverty (including urban poverty) is measured. Most PRSPs still rely primarily on income-based poverty lines to define who is poor. In many nations, a single poverty line is used, with no attempt to take account of the higher monetary income needed to avoid poverty in some areas, such as the larger or more prosperous cities. For nations that include basic-needs measures in their definition of poverty, some use indicators relating to people's proximity to services, without considering whether these people can actually use these services.