Urban Informality as a Commons Dilemma

Abstract

This essay is part of a collection of papers focused on the legal, policy and human challenges posed by the global growth of megacities in Latin America. The contention of this essay is that the problem of urban informality presents in some ways a classic "commons" problem. Informal settlements are able to thrive in cities across the world because, in spite of the existence of fairly well developed planning and land use rules, undeveloped urban land is "up for grabs" to land speculators (who purchase the land and then subdivide it) and ultimately to as many settlers as the land can accommodate. The framework that I offer here casts the commons problem in the context of informal settlements as in part created by "regulatory slippage." By de facto removing unappropriated land from regulatory reach it reverts, in practice, back to its natural, unregulated state where there is little or no restriction on its use.

Illegal subdividers and the individual purchasers who occupy the land are in a sense recreating the commons drama, or tragedy. Much like the herdsman in Hardin's tragedy scenario, in the case of informal settlements, individual users (e.g. pirate subdividers) have no incentive not to continue to (over) populate and consume the land while externalizing the cost of that use to others. As a result, urban land is being quickly consumed and its availability is slowly disappearing. Moreover, the costs eventually imposed on the local populace from the establishment and existence of informal settlements-i.e. the costs of upgrading, formalizing, and integrating the settlements into the urban metropolis-might be better (or more efficiently) spread through a different mechanism for using peripheral urban land to house the poor. The analytical traction that the Tragedy of Commons offers is to allow us to do so along the spectrum of public and private governance choices and the tradeoffs that they entail. This essay explores these choices, their tradeoffs, and offers some thoughts about each in the context of informal settlements.