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No Stairway to Heaven: Rescuing Slums in Latin America

Apartment buildings stand behind a low-income neighborhood in Mexico City

The Christmas inauguration of a giant outdoor escalator to Medellín’s notorious slum Comuna 13 is an admirable continuation of recent efforts across Latin America to reduce the immense divide between the prosperous parts of its cities and the vast dire slums. To reduce crime, Medellin and Bogota in Colombia, Rio de Janeiro and Sao Paulo in Brazil, and Monterrey and Ciudad Juarez in Mexico all have endeavored to extend permanent police presence and economic development to at least some of their poor neighborhoods. Yet to be effective, such policies need to overcome a multitude of complex challenges. Infrastructure projects rarely do the trick on their own.

Although inhabited by millions, Latin slums tend to lack elementary public goods while they are plagued by intense violence and ruled by criminal gangs. When bringing the state to the slum, governments thus need to pursue two interrelated objectives: to better establish the state’s physical presence and to realign the allegiance of slum residents away from criminal gangs and toward the state.

Initial law-enforcement actions, such as in Rio’s Alemao and Rocinha favelas, at times involve the insertion of heavily-militarized force in operations that can resemble urban warfare. As traumatic as the clearing operations can be, sustaining security afterwards tends to be even more difficult. Unlike the heavily-armed forces, traditional police forces, especially if designed as community police monitored by joint police-citizen boards, can develop trust of the community and ultimately focus on crime prevention. But developing such trust takes a long time. Meanwhile, training community police has been a major challenge, even for Rio’s Pacification program that is built around them. In Medellin’s comunas, local police continue to lack capacity and to be aligned with local crime gangs.

Paradoxically, street crime in the slum often rises significantly after the state disrupts the criminal order. Gangs that used to rule the slum function as regulators of life on the street, even providing dispute resolution mechanisms. Yet newly-inserted police units, lacking an understanding of the community, often fail to address street crime and new criminality such as land speculation. If fighting over existing criminal markets, including drug distribution, extortion, and prostitution, breaks out among the remnants of the deposed criminal groups, violence can escalate dramatically, as it has in Medellin since 2008. Such an increase in street crime can again alienate the population from the state and stimulate a hankering for militias and the resurrection of criminal order.

One of the acute dilemmas encountered by law enforcement in retaken slums is whether or not, how quickly, and in what form to suppress the slums’ illegal economies, such as local drug distribution. Reasons for doing so include concerns over leakage of illicit flows to other locales, a belief that the profitability of illicit profits will dissuade slum residents from switching to legal economies, and a fear that the persistence of illegal economies will pull in new violence and perpetuate anti-social and anti-state values among the residents. However, suppressing local illegal economies comes with significant costs, including massive drops in household income, new alienation of the slum residents from the state, expansion of other criminal activity, such as extortion, and the dissipation of law enforcement.

Generating legal livelihoods in urban spaces requires that the economic development strategy addresses all structural deficiencies. Beyond providing for public safety and the rule of law, such a comprehensive approach requires the establishment of stable property rights, access to microcredit, expanded availability of heath care and education, and the building of crucial infrastructure. But none of these necessarily solve the most challenging problem of all: generating sustainable legal jobs. For that, the private sector needs to find a reason enter the slum and do so in a labor-intensive way.

Limited, isolated, discreet interventions, even when responsive to the wishes of the local community, are particularly ineffective in changing socioeconomic dynamics in a marginalized  community. They neither alter basic social patterns nor generate jobs in the community, and therefore, do not reduce crime. If they amount largely to patronage handouts, they can produce complex negative equilibria between criminal and political patrons or a crime-pays mentality.

Moreover, economic development in marginalized urban spaces is rarely politically neutral. While it does strengthen marginalized communities and potentially their bonds to the state, it also threatens established powerbrokers who straddle both the crime and the official political worlds by depriving them of their agent-patron role. Thus, they have an interest in subverting such state-building efforts. A failure to neutralize such powerbrokers can easily unravel the strategy.

Neither Medellin’s escalator and its famous predecessor the Metrocable, nor Bogota’s Transmilenio, nor the planned infrastructure in Monterrey are stairways to city heaven. But they are important, if only initial steps toward improving the lives of marginalized urban communities plagued by violence, poverty, and social ostracism.