The Political Economy of Public Goods Provision in Slums

Posted: 8 Jul 2014 Last revised: 7 May 2015

See all articles by Mahvish Shami

Mahvish Shami


Hadia Majid

Lahore University of Management Sciences (LUMS)

Date Written: April 7, 2014


For the first time in human history the urban population outnumbers the rural one. This is both due to villages growing to become towns and cities, and migration of the rural population to urban cities. These urban migrants typically have low economic status due to which most are found residing in illegal settlements such as slums, shantytowns or squatter colonies. The perceived transitory nature of slums has traditionally resulted in most governments adopting a policy of benign neglect which has meant ignoring these migrants’ illegal land grabbing activities, but at the same time not providing them with any public goods, thereby resulting in these settlements having unsanitary living conditions. Notwithstanding the health implications for the poor, public goods provision to these settlements presents policy makers with an interesting conundrum - these settlements comprise of poor citizens who are particularly disadvantaged by the absence of public goods, and yet since most of these residents are illegal squatters, providing them with public goods would involve implicitly legitimizing their land-grabbing activities. This paper explores the political economy of clientelism that incentivizes public investment in slums. Our results show that slums situated in the periphery of the city are significantly less likely to enjoy public investment.

Keywords: Urban Pakistan, Slums, Patronage

Suggested Citation

Shami, Mahvish and Majid, Hadia, The Political Economy of Public Goods Provision in Slums (April 7, 2014). Available at SSRN: or

Mahvish Shami

LSE ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Hadia Majid (Contact Author)

Lahore University of Management Sciences (LUMS) ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792

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