Seven Transformations for More Equitable and Sustainable Cities

Image: The World Bank

Image: The World Bank

World Resources Report

Chapter 2

The Realities of Current Urbanization in the Global South

Macro-level trends show many regions of the global South urbanizing rapidly and leaving an increasing number of people behind. Urbanization characterized by low resources, high informality, and climate vulnerability needs a new approach.

2.1 Urbanization Shifting to Low- and Middle-Income Countries

Cities have long been laboratories of political, technological, and cultural innovation, where people with diverse skills and interests can exchange ideas, fulfill individual aspirations, and achieve collective goals. Urban services, amenities, and employment can boost productivity and allow residents to contribute to a thriving civic, economic, social, and cultural life.

Yet this virtuous cycle depends on adequate infrastructure and services.108 During the 19th and early 20th centuries, urbanization in the global North initially brought disease and poverty, especially in crowded slums with inadequate water and sanitation.109 By the mid-20th century, many cities in industrialized countries were turning this around by investing in better infrastructure and services. This helped contain disease outbreaks and dramatically improved socioeconomic indicators such as income, life expectancy, and productivity.110 Urban populations exploded while nations grew wealthier.111 Vibrant cities, in turn, created value and spurred economic development. Urbanization and economic growth proceeded in tandem.

But there is no guarantee that this cycle will repeat itself. Today urbanization in the global South is unfolding differently. Populations and demand for urban services and amenities are skyrocketing, but many cities can neither raise the revenue nor make the investments needed to respond. There is a real risk that they will be stuck with inadequate infrastructure and services, or caught in a downward spiral, as population growth outstrips cities’ ability to deliver what their residents need.

The world’s urban population is expected to surge from 4.2 billion in 2018 to 6.7 billion in 2050.112 Ninety percent of this growth is projected to take place in Africa and Asia. 113 Almost all urbanization is expected to take place in low- and middle-income countries, where the urban population will rise by about 75 percent (see Figure 2A).114 Between 2015 and 2030, the largest increases will occur in East Asia and the Pacific (32 percent of the total), South Asia (22 percent), and Sub-Saharan Africa (21 percent).115 The map in Figure 2B, shows the projected percentage change in urban population across regions between 2015 and 2030. Our city categorization shown in Box 2 corroborates this trend. In the cities we classify as struggling, urban populations are expected to grow by an average of 64 percent between 2015 and 2030. Emerging cities are expected to grow by an average of 18 percent.

Both Sub-Saharan Africa and Asia are urbanizing rapidly, but in different ways. From 2000 to 2010, rural-urban migration accounted for just 30 percent of urban population growth in Sub-Saharan Africa, and natural increase made up the other 70 percent.116 By contrast, in Asia, rural-urban migration accounted for almost 60 percent, and natural increase made up just 40 percent.117 Growth will continue there, but more slowly.118

Figure 2A | Urban population growth is concentrated in less developed regions over the next 30 years, primarily in Africa and Asia

Note: For the classification of regions into “more developed regions” and “less developed regions” we follow the United Nations Populations Division, which states that “more developed regions” comprise all countries in Europe and North America, plus Australia, Japan, and New Zealand. The “less developed regions” comprise all countries in Africa, Asia (excluding Japan), Latin America and the Caribbean, plus Melanesia, Micronesia, and Polynesia.

Source: UN DESA, 2019.

Figure 2B | Cities in Africa and Asia will experience the highest population growth between 2015 and 2030

Note: n=769 cities

Source: Beard et al. (2016), based on Oxford Economics (2016).

In 1960, few low-income countries were highly urbanized. By 2014, this had changed. Many more low-income countries were urbanizing fast, and the relationship between national income and urbanization had weakened (see Figures 3A and 3B).

Figure 3A | Urbanization and economic growth historically have gone hand in hand, but the relationship depends on country factors and has weakened in recent years (1960)

Few low-income countries were highly urbanized in 1960, and the relationship between urbanization and national income was stronger.

Note: The graph shows the relationship between the percentage of the population that is urban and the gross domestic product (GDP) per capita in 1960 for countries of the world. The country classification is based on the 2016 country classification. (RSE = 0.3213, n = 88, p-value: < 2.2e-16)

Figure 3B | Urbanization and economic growth historically have gone hand in hand, but the relationship depends on country factors and has weakened in recent years (2014)

More low- and middle-income countries were highly urbanized in 2014, and the relationship between urbanization and national income was weaker.

Notes: The graph shows the relationship between the percentage of the population that is urban and the GDP per capita in 2014 for countries of the world. (RSE = 0.4652, n = 175, p-value: < 2.2e-16); OECD = Organisation for Economic Co-operation and Development. Across countries, we find that the extent to which urbanization is associated with economic growth may depend on removing barriers to rural-urban mobility and ensuring supportive policies, markets, and infrastructure investments that sustain growing cities (Turok and McGranahan, 2013). Several factors, including geography, history, culture, governance, and institutions, are responsible for the differences in how this relationship plays out between countries, yet there are important lessons to learn from the urbanization trajectories of today’s wealthier nations (Chen et al., 2014).

Source: Beard et al., 2016. Analysis based on World Bank DataBank and World Bank country classification in 2016.

Figure 3B shows that the level of urbanization explains a much lower share of the variation in national income in 2014 than it did in 1960.

Today, especially across Sub-Saharan Africa, cities are growing fast but incomes remain stagnant.119 Between 1980 and 2020, the urban population rose faster than GDP per capita.120 This well-studied phenomenon of urbanization without growth121 suggests “the possibility that something fundamental has changed in the relationship of urbanization and development in the late 20th century compared to prior experience.”122 Economists link the rapid growth of low-income megacities in many countries to more open economic systems and poor agricultural yields, which have made rural livelihoods precarious and farmers desperate, fueling migration to cities.123 In countries that depend heavily on resource exports, as many in Africa do, urbanization has progressed without industrialization and has been concentrated in “consumption cities,” with local economies based on nontradable services and generally low welfare outcomes.124 This pattern is very different from the growth of “production cities” in industrialized countries built around manufacturing.125 Across low-income countries, urbanization is happening without industrialization or rising living standards for the majority of people.126 Urbanization without economic growth hinders the ability of governments to provide the services and invest in the urban infrastructure that people depend on. This leads to a vicious cycle because the poor quality of urban infrastructure and services in turn constrains productivity and drags down economic growth.

2.3 Rising Poverty in Urban Areas with Women and Children Bearing the Brunt

Poverty, once more prevalent in rural areas, is now increasingly shifting to cities. Based on income alone, poverty rates globally and in many nations are falling, but the spatial distribution of poverty is changing, with the share of poor people living in urban areas on the rise worldwide.127 It is estimated that COVID-19 has pushed about 120 million people into extreme poverty so far, with most of the new poor in countries such as Bangladesh, Brazil, Mexico, Nigeria, and South Africa being urban dwellers.128

Income is just one dimension of poverty. To grasp its full implications, poverty must be measured more broadly, factoring in education and access to basic infrastructure such as electricity, water, and sanitation. Recent research on 119 countries (representing 45 percent of the world’s population) shows that the multidimensional urban poverty rate in Sub-Saharan Africa is 11 times higher than in Latin America and the Caribbean, one of the world’s most highly urbanized regions (see Figure 4).129 In Sub-Saharan Africa, the fastest urbanizing region today, most urban residents are multidimensionally poor. These numbers are likely underestimated because migrants or slum dwellers are often not counted, and we know that, on average, slum populations are growing faster than urban populations as a whole.130

In most countries, adding indicators of access to services, education, health, and security to measures of poverty increases the share of the multidimensional poor who live in urban areas and in female-headed households. Recognizing multidimensional poverty has important implications for targeting poverty reduction efforts and resources to increase human wellbeing, not just income. When compared to a definition that focuses solely on monetary poverty, a multidimensional definition that includes consumption, education, and access to basic infrastructure results in the share of poor being approximately 50 percent higher at the global level.131 Urban incomes may appear high until the deprivation of essential services is taken into account because it imposes the additional costs of accessing services and health burdens, particularly in the overcrowded informal settlements where the poor live when cities lack decent affordable housing.

Lacking access to clean water and adequate sanitation is a key driver of multidimensional poverty, and has a greater impact, particularly on women and children, than low incomes.132 A study of 25 countries in Sub-Saharan Africa found that women collectively spent at least 16 million hours each day collecting drinking water, compared to 6 million hours for men and 4 million hours for children.133 Women and girls also suffer disproportionately from lack of access to bathrooms and toilets as it exposes them to risks of sexual harassment and assault.134

Figure 4 | The average percentage of people living in multidimensional poverty in urban areas is highest in Sub-Saharan Africa and South Asia

Note: The measure of multidimensional poverty used here includes income as one dimension, along with access to basic services (such as electricity, water, and sanitation) and education as two additonal non-monetary dimensions of well-being. Specific indicators for each dimension are listed in Table 4.1 of World Bank, 2018a. Estimates are based on harmonized household surveys in 119 economies circa 2013 from the Global Monitoring Database (GMD) of the World Bank.

Source: Authors’ analysis based on World Bank, 2018a, Table 4C.1.

2.4 The Greatest Challenges and the Fewest Public Resources in Rapidly Growing Cities

Building infrastructure and providing services for exponentially growing populations is in itself a daunting challenge, but doing so while ensuring low-carbon, resilient, and sustainable growth is even more difficult,135 especially on a small budget. This is precisely the dilemma that rapidly growing cities in the global South will face. From now until 2050, about 40 percent of urban population growth is expected to occur in smaller and midsize cities that currently have populations of 1 to 5 million people, not the dominant metropolitan areas that typically have more capacity and receive more resources from national governments and external funding agencies.136

Budget per capita is a useful proxy for the financial resources available. Figure 5 compares city population size and the municipal budget per capita using data from a sample of 30 cities in different regions. It shows vast disparities in the resources cities can deploy. Bengaluru, India; Wuhan, China; and New York City, United States, are each home to about 8.5 million people. But Wuhan’s per capita budget is 38 times as large as Bengaluru’s, and New York City’s is 164 times larger.137

Figure 5 | Cities in the global South have significantly smaller municipal budgets per capita

Note: City budget data are from years 2010 to 2016.

Source: Authors’ compilation from various sources first published in Beard et al. (2016). Converted to exchange rates accounting for purchasing power parity as the original source used market exchange rates.

2.5 High, Persistent, and Growing Informality in Countries where Urban Growth is Concentrated

Over 1 billion people worldwide, representing a third of urban dwellers worldwide and two-thirds in low-income countries, occupy informal settlements that lack core services and secure tenure, and these settlements are a ubiquitous feature of cities across the global South.138 Often they are self-built by low-income people who cannot afford housing in the city close to employment opportunities. Urban slums spring up where planning is lax and affordable housing is scarce as well as where cities have not used accessible, well-serviced land to create housing that can accommodate growing urban populations. The number of people living in slums climbed by 200 million between 1990 and 2014.139 “Informal” housing or slums without tenure and services differ from legally constructed but inadequate formal housing, although both may be ramshackle, overcrowded, and lacking in access to services.

Whatever their drawbacks, informal settlements are centers of significant economic activity, encompassing numerous home-based microenterprises and informal labor.140 Informal workers with poor, insecure, and irregular livelihoods represent between 50 and 80 percent of urban employment in the global South.141 The majority of these informal workers work at daily wages, are self-employed, or contribute to small home enterprises.142 Globally, more than 2 billion people work in the informal economy. This represents almost 90 percent of the workforce in rapidly urbanizing countries such as India and Kenya.143

In many urbanizing low- and middle-income countries, informality is pervasive and persistent. It can be seen not only in the high proportion of informal workers and settlements but also in the way people get essential services. Often it is informal workers and vendors who provide them. Figures 6A-6E present data from the thematic papers on informal employment, informal housing, and informality in the delivery of key urban services (transport, water, and sanitation). The figures highlight how these phenomena are generally concentrated in cities in Africa, Asia, and Latin America.

The pandemic has highlighted the fragility of life in this informal economy (see Box 3). Informal workers have faced the choice of either laboring under conditions that expose them to the virus or going hungry. Often these low-wage, gig workers are doing the essential work that keeps urban economies running, yet they lack the financial and social safety nets people need to ride out crises.144

Figure 6A | The informality of urban labor in the global South

Figure 6B | The informality of urban housing in the global South

Figure 6C | The informality of urban transport in the global South

Figure 6D | The informality of urban water supply in the global South: Other sources typically represent informal and alternative service provision

Figure 6E | The informality of urban sanitation in the global South: Unsafely managed sanitation typically reflects informal and alternative service provision

Notes: The majority of people in many global South cities rely on informal modes of urban transport or paratransit; For Panels 6D and 6E, the 15 cities included Bengaluru, India; Caracas, Venezuela; Cochabamba, Bolivia; Colombo, Sri Lanka; Dhaka, Bangladesh; Kampala, Uganda; Karachi, Pakistan; Lagos, Nigeria; Maputo, Mozambique; Mzuzu, Malawi; Mumbai, India; Nairobi, Kenya; Rio de Janeiro, Brazil; São Paulo, Brazil; and Santiago de Cali, Colombia. Figures for panels 6D and 6E are weighted by population.

Sources: Figure 6A: Chen and Beard, 2018; Figure 6B: King et al. (2017), based on estimates from UN-Habitat (2015a); Figure 6C: Venter et al., 2019; Figure 6D: Mitlin et al. (2019), based on WRI (2018); Figure 6E: Satterthwaite et al. (2019), based on WRI (2018).

Box 3 | The COVID-19 pandemic has been calamitous for the informal urban workforce

In cities of the global South, as much as 50 to 80 percent of employment is informal, comprising street vendors, minibus drivers, construction workers, domestic workers employed in homes, security guards, migrant workers, and numerous workers and enterprises operating from their homes in informal settlements.a Many of these families are essentially surviving day to day, living in dense neighborhoods with unreliable and often shared access to basic services such as water, sanitation, and electricity. Many do not have bank accounts, basic employment contracts, or insurance. Their incomes and workplaces are not on any government agency’s radar. In short, they lack the resources to survive without defying lockdown orders now applicable in most cities. Recognizing the stark reality of urban inequality and the lack of social safety nets for the informal workforce is essential for tackling the current pandemic and for cities to be more economically resilient to future crises.

A survey in Bengaluru, India—where over 70 percent of the workforce is informal—showed that although many low-income workers were afraid of contracting COVID-19, most felt compelled to continue working for fear of losing income, jobs, and the ability to feed their families.b Food insecurity is at an all-time high, and without support, residents are seeing only two choices: risk infection or starvation. A week of dropped wages could mean they will lose their housing. For some, their work is their place of shelter. Data from Kampala, Uganda, reveals serious impacts on over 600,000 jobs in the informal transport sector because of restrictions during the pandemic. This led to wider economic costs for the whole city because of the inability of millions of people to get to jobs and a loss of approximately US$1.2 billion (4.5 trillion Ugandan shillings) that the informal transport sector contributes annually to the local economy.c

Often invisible to governments and other urban residents in the best of times, what happens to informal workers such as street vendors and domestic workers during the COVID-19 pandemic could affect whole cities—rich and poor folks alike. In response to the Indian government’s lockdown order, millions of urban migrant and informal workers have been fleeing back to their home villages.d This has accelerated the spread of infection across India, putting many rural areas with little health care in immediate danger.

In the long term, investing in basic infrastructure and services, education, skill training, and health care are necessary. But there are short-term strategies to help cities respond now to the crisis faced by informal workers. National governments can process fiscal transfers to states/cities so they can immediately distribute cash assistance—through more creative means than usual, if necessary—to those who need it most. Cash transfers can protect traditional supply chains for essential goods. In Delhi, India, for example, the local government is setting up shelters and food distribution points to stop rural migration, though not at a fast enough rate.e Governments should leverage existing systems to distribute subsidized food and other essential goods, but these need to be available for those without secure addresses or bank accounts. Through partnerships with private companies, cities can extend their ability to distribute essential goods to those who need them most. In Bengaluru, for example, a private food delivery platform has partnered with the state government, nongovernmental organizations (NGOs), and commercial kitchens to serve 500,000 meals daily.f

City governments must also coordinate closely with community leaders and NGOs that work in informal settlements and other at-risk communities, both to better understand what is happening on the ground and to communicate key health messages. Establishing deeper and more trusted partnerships with communities can lead to more responsive policies, budget allocations, and channels of communication. A robust data infrastructure can help identify high-risk locations—such as those where water access is dangerously low—to inform urban planning and create better preparedness for the future. Targeting assistance to these locations to close the urban services divide is a way for cities to build back differently and more equitably to better withstand the next crisis.

Sources: a. Chen and Beard, 2018; b. AICCTU, 2020; c. Hatchile Consult, 2020. Ugandan shillings were converted using the average exchange rate for U.S. dollars to Ugandan shillings for April 2020, when the survey of informal transport operators was done. The historic exchange rate was obtained from Currency Converter (2020); d. Agarwal, 2020; e. India Today Web Desk, 2020; f. PTI, 2020.

2.6 Urban Growth Patterns Accelerating Environmental Degradation

Unless they can harness innovations to leapfrog the trajectories followed by developed nations, urbanizing low-income nations will experience urban population growth accompanied by a steep rise in consumption, environmental degradation, and GHG emissions.145 To take one example, if car ownership in Nigeria approached the level of the United States, where about 90 percent of households own cars,146 reducing local air pollution and slowing climate change enough to stave off catastrophic consequences would become significantly harder. Illness and premature deaths due to ambient air pollution in Lagos, Nigeria’s largest city, caused losses of $2.1 billion in 2018, representing 2.1 percent of Lagos State’s GDP.147 With current carbon-intensive growth trends, the materials consumed to build and expand cities could more than double from their 2010 level by 2050, so cities need to be planned and built differently.148

The scale and pace of growth and lack of appropriate planning and regulation are already imposing heavy burdens on environmental resources and quality.149 Freshwater and soils are being contaminated and spreading disease because sewage and wastewater treatment systems are nonexistent or inadequate. More than 80 percent of all sewage and most of the industrial wastewater in developing countries is discharged untreated into rivers, lakes, or the ocean.150 Excessive groundwater extraction to meet growing demand is depleting aquifers and creating water scarcity.151 Rampant unregulated construction in urban floodplains and wetlands has been causing disastrous flooding events across South Asian and African cities. Cities are encroaching on forests and prime agricultural land that have historically provided natural buffers against flooding. Some of this development also invades biodiversity hot spots.152 Unmanaged urban expansion, with little regard for travel distances, hydrology, or protection of green cover, is driving up GHG emissions, air pollution, flooding risk, and urban heat island effects.153 Weak land-use and environmental regulations exacerbate these challenges. The poor and those living in informal settlements are most vulnerable to natural disasters, pollution, and the impacts of climate change.154

Air pollution also imperils public health in rapidly urbanizing low- and middle-income countries. Air in these cities contains extremely high levels of PM2.5 pollution. These fine particles, 2.5 microns or smaller, are able to bypass the body’s defenses, making them especially dangerous. They can cause heart and lung disease and premature death.155 Nearly everyone in these urban areas is exposed to PM2.5 levels that exceed the air quality guidelines of the World Health Organization (WHO).156 As shown in Figure 7, South Asian countries face the highest levels of PM2.5pollution in the world, followed by African and Middle Eastern countries.157

Figure 7 | Rapidly urbanizing countries in Africa and Asia have the highest levels of air pollution

Note: The figure shows the annual average PM2.5concentration in 2018 relative to the World Health Organization’s guidelines.

Source: Based on Dalhousie University Atmospheric Composition Analysis Group data and Hammer et al. (2020), accessed through Resource Watch (August 8, 2021),

2.7 Highest Climate Vulnerability and Increasing Carbon Footprints in Poor, Rapidly Urbanizing Regions

The poorest and most climate-vulnerable regions of the world are projected also to be the hot spots of in- and out-migration driven by climate change. Ninety percent of this migration will be in Sub-Saharan Africa and South Asia. By 2050, over 140 million people in Sub-Saharan Africa, South Asia, and Latin America could be forced to move within their own countries to escape the slow-onset impacts of climate change.158 They will flee from parched rural areas where crops are failing and from coastal and low-lying areas menaced by rising sea levels and storm surges. But in cities, the often poor-quality, informal settlements where they live may not be safe either because they are extremely vulnerable to floods and storms.

Voices: Annette Kim on new urbanization patterns in East Asia

As climate change propels urbanization, urbanization could also accelerate climate change. In 2010, the cities of the global South accounted for just over a quarter (27 percent) of global urban carbon dioxide emissions. If current trends continue, that share is expected to more than double to 56 percent by 2050.159 However, a recent report shows that by using technically feasible and widely available mitigation measures, cities could cut their emissions in key sectors by almost 90 percent by 2050.160 Planning cities in ways that conserve energy, reduce automobile use, and limit commuting distances can accomplish this. How urban growth is managed will determine whether low- and middle-income countries follow a high- or low-carbon trajectory. This will play a pivotal role in global efforts to avert catastrophic temperature rise and protect the natural ecosystems and resources that sustain life. If these efforts fall short, it is these same cities and their inhabitants who may suffer the most. Figure 8 shows that many countries across Africa, Asia, and Latin America are more vulnerable to climate change and are far less prepared to cope with it than Western Europe and North America.

Figure 8 | Climate vulnerability and readiness to deal with climate risks vary by country

Note: Readiness is measured by considering a country’s economic, social, and governance ability to leverage investments for adaptation actions. Vulnerability of a country is measured by considering six life-supporting sectors: food, water, health, ecosystem services, human habitat, and infrastructure. Each sector is, in turn, represented by six indicators that represent three cross-cutting components: the exposure of the sector to climate-related or climate-exacerbated hazards, the sensitivity of that sector to the impacts of the hazard, and the adaptive capacity of the sector to cope or adapt to these impacts.

Source: ND-GAIN, 2018. For the full data set, see the Notre Dame Global Adaptation Initiative database,

2.8 A Different Kind of Urbanization Requires a New Approach

In the coming decades, urbanization will accelerate, and the fastest-growing cities will be in low- and middle-income countries. These cities are luring millions of people desperate for a better life, but often their hopes wither. A rising share of people in the fastest-growing cities find themselves excluded from opportunity and locked in a precarious daily struggle just to sustain themselves and their families.

Voices: Somik Lall on sustainable urban development in Africa

Freeing those trapped on the wrong side of the services divide—and unleashing their productive and creative potential—could help reinvigorate cities and whole nations. But the strategies that worked for rapidly urbanizing nations in the past are inadequate and often unfeasible today. Historically, GDP and income growth went hand in hand with urbanization and helped finance needed infrastructure and spread wealth. Today’s urbanization often lacks this crucial backstop.161

Today’s fastest-growing cities need new tools and approaches to succeed, built on a solid understanding of the economic and demographic conditions they face. The divergence between economic growth and urbanization is a critical point of departure. Daunting and cascading problems exist, but so do real opportunities to solve them. New mindsets and strategies hold the potential to make urbanization more inclusive, equitable, and sustainable, benefiting not just the poor, and not just city dwellers, but everyone on the planet.