Rethinking aid to urban poverty reduction: lessons for donors

This brief of the April 2001 issue of E&U discusses what has been learnt from the experience of bilateral aid agencies and development banks in urban areas. It considers how urban poor groups might assess such agencies, drawing on studies of projects funded by the World Bank, US AID, UNICEF, NORAD, DFID and Sida. It highlights issues that international donors have to address if they are to become more effective at reducing urban poverty:

* Recognizing the multiple deprivations faced by low income groups and broadening their approach to poverty reduction;~* Moving from a focus on projects to supporting processes and changing institutional structures that help reduce urban poverty;~* Reducing the distance between donor decision making structures and urban poor groups and developing greater transparency and accountability 'downwards' to these groups; and~* Developing new channels to support 'better local governance' and to provide support direct to community organizations.

This paper also describes the kinds of changes needed within urban governments to make them more effective partners both for donor agencies and for urban poor groups.