Catalog

	Table of Contents
p. 11 of 26 BACK | NEXT Executive Summary I. Introduction II. The Urban Sector III. The Bank's Involvement in the Urban Sector A. Trends in Bank Lending B. Performance of Lending in the Urban Sector C. Coordination with Multilateral and Bilateral D. Lessons Learned IV. Objectives and Policy Priorities V. The Bank's Urban Sector Strategy VI. Implications for Bank Operations VII. Conclusion

Urban Sector Strategy : III. The Bank's Involvement in the Urban Sector

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D. Lessons Learned

77. The experience of the Bank and DMCs in the provision of Bank support to the urban sector indicates a number of lessons that need to be considered in developing strategies for the sector.

1. Acknowledge the complexity. IUDPs, and the urban sector overall, involve management of resources and delivery of services across several subsectors and levels of government, as well as involvement of a variety of private sector and community stakeholders. Urban development therefore requires well thought-out policy frameworks and close linkages between many agencies, and IUDPs should be based on clear institutional roles and responsibilities. More attention is needed to improving the integration of project components, responsiveness to client needs, sustainable provisions for O&M, and the improved use of performance indicators with which to measure project impacts. IUDPs could be focused on fewer subsectors and as far as possible the number of executing agencies should be limited to simplify project implementation.

2. Community involvement. Project success and sustainability depend on community ownership, which in turn depends on community involvement in project preparation. Ways must be found to strengthen community and beneficiary involvement in project selection and design. This takes time and requires in-depth understanding of community preferences and ability and willingness to pay for services. Enhanced public awareness of urban development, infrastructure, and service issues and options is a precursor of this process.

3. Target beneficiaries. The selection of urban centers and sectors to be included in IUDPs should be guided by the level of commitment of candidate centers and sectors rather than by top-down planning. A specific set of criteria is needed, against which the performance of urban centers should be evaluated prior to entry into the program, and a longer term relationship with project cities and towns combined with a more flexible approach to project content.

4. Increase emphasis on the environment. Emphasis on pollution control and environmental management should increase as these subjects are given higher priority by middle-level DMCs such as the PRC, Philippines, Sri Lanka, and Thailand. This will require institutional coordination and strengthening as improving environmental conditions almost always involves issues of cross-sectoral, and often cross-border, responsibilities.

5. Enhance the focus on urban transport. The Bank has had limited involvement in the urban transport sector in DMCs, yet this sector is important for promoting urban efficiency with potential high economic rates of return. Infrastructure-led planning for urban expansion is acknowledged to be more effective than more traditional zoning and other spatial planning techniques. While the capital costs and lengthy preparation and implementation phases of major transport investments may be daunting, partnerships could be formed with private sector concerns in build-operate-transfer, build-operate-own, and other similar arrangements. In addition, other areas of urban transport are equally important, such as pricing policies and traffic management, where intervention would yield significant benefits.

6. Housing for the poor. Direct housing interventions in favor of the poor have been less than successful. Indirect support such as developing affordable and sustainable housing credit, improving land transfer mechanisms, making land use controls effective, and legalizing informal settlements are more likely to improve access to land and shelter for the poor.

7. Service delivery. Cross-sectoral institutional strengthening and policy reforms are critical for delivering better urban services. Issues needing greater emphasis include the role of the private sector and market-based reforms, horizontal and vertical coordination among agencies, community involvement, cost recovery, demand management, and innovative funding mechanisms. Greater reliance needs to be placed on market mechanisms for the delivery of infrastructure and services, particularly in large cities. Examples include pricing of road transport and water supply to regulate demand where this would protect nonrenewable resources or compensate for unquantifiable externalities. Successful private sector participation in water supply and solid waste management in some DMC cities indicates the potential for wide-scale development of public-private partnerships in these and other urban services.

8. Social equity. While increasingly relying on private capital and market mechanisms for infrastructure and service provision, policy frameworks and provider agreements must ensure equitable and affordable access to basic services and infrastructure for the urban poor and vulnerable groups.

9. Spatial planning and effective land management. Assistance in spatial planning and land management has been largely unsuccessful as planning has not been proactive in helping to develop efficient land markets, but has concentrated instead on land-use regulations that are frequently unnecessary. Public-private partnerships can be an effective means of making access to land and shelter more affordable. While DMC governments have not been effective in managing land in isolation, especially when faced with rapid urban expansion, the public sector has an important but indirect enabling role in supporting the private sector’s ability to supply affordable land and shelter.

10. Local government. Local governments, in association with public corporations and/or the private sector, are the appropriate foci for the efficient provision of urban infrastructure and services. However, local governments are typically weak in human, financial, and technical resources, and thus capacity building at the local government level is vital if improvements are to be made sustainable.

    The rapidly increasing demand for infrastructure and services requires innovative thinking about the potential sources of finance available to local governments. A joint approach by central and local levels of government to facilitate local government access to bond markets and institutional investment is needed. At the same time, local governments need to improve their financial management in terms of revenue-raising and budgeting.

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