•  How do city managers best prioritize provision of basic public services to reflect local demand? This study presents a strategy to estimate the demand for public services. Using data from Pune, India, the study estimates the demand for public services, as represented  by the marginal change in the self-assessed monthly rental price of dwellings from the services. Results indicate that the value of publicly-provided services accruing to the poor is greater than that going to wealthier households, and even untargeted across-the-board investment in specific services can be progressive.
  

 Lall, S.V. and M. Lundberg,  Forthcoming.   "What are Public Services Worth, and to Whom? Non-Parametric Estimation of Capitalization in Pune."  Journal of Housing Economics. World Bank Policy Research Working Paper 3924.

• In developing countries a key development issue is that many urban residents live in the informal sector which is both unregulated and poorly serviced with basic infrastructure such as sewer and water. Based on modeling and data from Brazil, this paper argues that forcing lower income migrants into the informal sector is, in part, a strategic device used by existing residents to limit population growth, to fiscally exploit migrants by taxing them with few public services in return, and to avoid the fiscal externalities imposed by migrants who would pay less than the full cost of public services if they were admitted to the formal sector.

Henderson, J.V. (2007). "Indirect Land Market Regulation in Brazil", mimeo, World Bank.

• This study uses household survey datasets from South Africa to understand how residents value benefits from subsidized housing and whether such subsidies induce complementary private investment in maintenance. The results imply relatively poor satisfaction levels because dwellings are often far from employment centers—often in the “old” apartheid locations. Public housing provision does not seem to induce complementary private investments in housing maintenance or upgrading. However, benefits appear to indirectly by stimulating expenditures on education of children.

Lall, S., R. van den Brink, K. Leresche and B Dasgupta. (2007). “Subsidized Housing and Access to Land in South African Cities.” mimeo. World Bank.

• How do slum dwellers value location-based amenities? This study analyzes the residential location choices of slum dwellers, which are conditional on housing quality, neighborhood amenities, and community structure, and simulates the impact of alternate interventions on household welfare. The findings suggest that households derive benefits from housing quality as well as neighborhood amenities. Relocating households to the periphery has adverse consequences for household welfare, although households could be adequately compensated using the increased tax revenue accruing from alternative uses of the vacated central land.

Lall, S.V., M. Lundberg, and Z. Shalizi.  Forthcoming.  "Implications of Alternate Policies on Welfare of Slum Dwellers: Evidence from Pune, India."  Journal of Urban Economics. in press; also World Bank Policy Research Working Paper 3318.

• Citizen feedback is considered an effective means for improving the performance of public utilities. But how well does such information reflect the actual quality of service delivery? This study finds that satisfaction increases with improvements in own service status, but is also influenced by comparisons with service levels of neighbors or peers. This implies that satisfaction is at least in part determined by factors that are unrelated to actual service quality experienced by households.

Deichmann, U. and S.V. Lall (2007). "Citizen feedback and delivery of urban services", World Development, 35, 4:649-662; also World Bank Policy Research Working Paper 3070.

• What are the effects of land use zoning and density regulations on formal housing supply and slum formation in Brazilian cities? Using data for 1980-2000, this study shows that well designed city policies can improve performance of the housing market and stimulate formal sector housing response, thereby reducing slum formation – but these policies also induce migration. This suggests that policies that aim to reduce barriers for access to land need to be accompanied by instruments that relax pre-existing distortions in the land market, otherwise pro poor land regulations may in fact exacerbate the slum formation problem.

Lall, S. , H. G. Wang and D. DaMata (2006). "Do Urban Land Regulations Influence Slum Formation? Evidence from Brazilian Cities". Mimeo. July 2006, Under submission, Journal of Development Economics.

• Study on slum upgrading developed a dynamic general equilibrium model to compare the effectiveness of alternative slum upgrading instruments in an urban setting with distortions in the land and credit markets. Using data from three Brazilian cities, the analysis indicates that pre-existing land supply and credit market distortions reduce the benefits of interventions, and change the rank ordering of preferred interventions. The results suggests that partial equilibrium analysis used in typical cost-benefit work overstates the stream of net benefits from upgrading interventions and may lead to a less desirable sequence of interventions.

Dasgupta, B. and Lall, S. (2006). "Assessing Benefits of Slum Upgrading Programs in Second Best Settings". World Bank Policy Research Working Paper 3993, August 2006.

• As many local governments develop own-source revenue such as property taxes rather than relying solely on central transfers, the fiscal and distributional implications of assessment reforms become a major concern. This analysis shows that reform efforts that bring assessment of the property tax base closer to market values have significant positive impacts on revenue generation and do not have adverse consequences in terms of the tax burden faced by the poor. While current assessment reforms are a good first step, structural issues such as improved valuation, increasing buoyancy of the tax, and building taxpayer confidence need to be addressed to make these reforms sustainable.

Lall, S.V. and U. Deichmann (2006). "Fiscal and Distributional Implications of Property Tax Reforms in Indian Cities",  Economic and Political Weekly, July 22, 3209-3220.

• What enables slum dwellers to transition into the formal housing sector without direct intervention such as slum upgrading or sites-and-services programs? In Bhopal, India, one in five households succeeds in leaving a slum settlement and a major determinant is the ability to save on a regular basis. Due to limited outreach of institutional housing finance, most slum dwellers rely solely on household savings for purchasing a house. These findings underscore the urgent need to improve savings instruments for slum dwellers and to downmarket housing finance to reach the poorest residents of rapidly growing cities in developing countries.

Lall, S.V., A. Suri and U. Deichmann (2006)."Household Savings and Residential Mobility in Informal Settlements in Bhopal India", Urban Studies, 43, 7, 1-15; also World Bank Policy Research Working Paper No. 2960.

• What factors influence community participation in the delivery of urban services? This study shows that tenure security has a significant impact on the willingness of residents to participate even when neighborhoods are diverse in terms of their cultural background and welfare status. These findings suggest that participation is possible in heterogeneous communities when participation is a means to a common objective and not a goal by itself.

Lall, S., U. Deichmann, M. Lundberg and N. Chaudhury (2004). "Tenure, Diversity, and Commitment: Community Participation for Urban Service Provision", Journal of Development Studies, 40, 3:1-26; also World Bank Policy Research Working Paper No. 2862.

• The task of urban managers is to ensure the provision of basic urban services and an environment conducive to economic growth, while maintaining fiscal sustainability of city operations. City managers in developing countries face increasing pressure in achieving these goals due to rapid urbanization, fiscal and administrative decentralization, and the economic challenges of globalization. Based on experience in Bangalore, India, this paper argues that effective, forward-looking urban management requires a much better information infrastructure than is currently available in most cities.

Deichmann, U., S. Lall, A. Suri and P. Rajoria (2003). "Information-Based Instruments for Improved Urban Management", World Bank Policy Research Working Paper 3002.