Limits of Mumbai Slum Development as a Science

Tanmay Misra

August 2014

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This paper would not have been possible without the support of Studio-X Mumbai and Columbia

University’s South Asia Global Center. It is largely inspired by and an adaptation of several

papers by Professor David Kennedy at Harvard Law School, in particular “Some Caution about

Property Rights as a Recipe for Economic Development.” I am also thankful to interviews with,

in order of occurrence, Dr. Nirupam Bajpai at Columbia University’s Global Center in South

Asia, Mr. Gaurav Gudhka and Mr. Amit Nanda at Tata Affordable Housing, Mr. Madhu Menon

at Micro Housing Finance Corporation, Ms. Sukanya Purkayastha at Columbia University’s

Global Center in South Asia, Prof. Ramesh Kumar Misra, Dr. Krishnan S. Raghavan at the Asian

and Pacific Centre for Transfer of Technology of the United Nations Economic and Social

Commission for Asia and the Pacific, Mr. Dibyendu Sengupta, Mr. Monish Verma, and Mr.

Vittal Dhage at the Delhi headquarters of the European Business and Technology Centre, Ms.

Radhika Kaul Batra and Ms. Diya Nanda at the Office of the United Nations Resident

Coordinator in India, Ms. Spandana Battula formerly at the Housing and Land Rights Network,

Mr. Milind Borikar and Mr. Nitin Deshmukh at the Slum Rehabilitation Authority, Ms.

Vaijayanti Mahabale at the Mumbai office of the Housing and Urban Development Corporation,

and Mr. Rahul Srivastava at URBZ Mumbai. Any errors in fact and in interpretation are mine

alone.

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Executive Summary

When it comes to Mumbai slum development, one is confronted with a theory or model at every

turn. This paper focuses on two prominent interventions and their aspiration to become a science

of development: first, titling and two property rights analytics (‘market efficiency’ and ‘pro-poor

empowerment’) and second, microfinance. It unfolds three assumptions that gird development

expertise’s claim to science: the legibility of the slum as baseline evidence, decision-making as

derivative of a model, and institutional harmony between financial sustainability and poverty

alleviation. Finally, the paper concludes by examining the relationship between architectural

theory and typology and slum development to understand the stakes of development as a science.

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Chapter One: Introduction

From its emergence as a category to describe the spatialisation of poverty, a ‘slum,’ by its very

definition, is a problem. It is something to be addressed, something that requires an intervention,

something that requires a solution which would transform it out of its existence. It is both an

antagonist and an impetus to various development programmes for whom it serves as a raison

d’etre. If there were no slum, there might be no need to call for a humanitarian urban

development. If there were no slum, there might be no need for any professional institution

whose mission would be to eradicate poverty for this target population, to eradicate this target

population as a ‘target population,’ as a distinct group to profess to serve. In short, if there were

no poverty, there would be no underdevelopment.

If poverty is in fact intermeshed in a web of other problems which co-constitute it—disease,

illiteracy, discrimination, etc.—intermeshed to the point of dissolving in the heterogeneity of

social life as a discrete problem for ‘development,’ then a world without poverty could mean a

world without conflict and therefore a world without difference. Gone would be the intricate

international apparatus whose proclaimed directive is to solve this conflict of difference which

results from the interdependence of the global economy. Gone would be the literature on how to

develop, on the true meaning of development, on its most accurate measurement, and gone

would be the practitioners, their salaries, their ways of living, and their identities of themselves

as humanitarians, once there is no need for their intervention. In a world without difference, there

is no other into whose life one could intervene.

If the work of development is one step towards this vision of a world, or towards a ‘second-best’

ideal whose specifics we could haggle in the meanwhile, then though practitioners might differ

in their recommendations, they do seem to largely agree, on the basis of a faith in that aspect of

their work which they deem is technical, that models and analytics—which ones and how to use

them are up for debate—will provide solutions to poverty and will do so with the reliability of a

scientific assurance.

Where the slum is concerned, an international apparatus of expertise links economists, policy

academics, legal scholars, and other social scientists to multilateral organisations that provide

conditional financial assistance, to consulting firms commissioned to provide insight on

interventions, and to academics, policymakers, and others within India who cite and reproduce

this expertise. The prominent role of this circuitry in shaping any given intervention in a Mumbai

slum, producing both the understanding of the problem and the intervention’s justification,

cannot go understated. Among other recommendations, development experts have hailed titling,

property rights analytics, and microcredit as critical for slum development. These interventions

have been endorsed both by prominent international organisations working within India as well

as by the Indian government itself. They bring to bear varying notions about legal formalisation

and informal customs to compose a strategy for slum development that aspires to become a

science. This paper is a detailed explication of some of the assumptions, acknowledged and

otherwise, of these expert proposals.

*

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Chapter Two: Titling & Property Rights

1. Introduction: Formalisation of Property Rights

Titling often proceeds from certain premises about the relationship between law and economic

development in which the legal concept of property serves as a sort of wedge or pivot. Property

is said to provide the tangible form necessary to produce value from an asset beyond its

immediate and physical use. Because it describes, organises, standardises, and preserves an asset

in law, property is said to make possible the asset’s comparative evaluation, security, and

fungibility for transactions.1 This relationship between law and development vis-à-vis property

also involves an idea about the relationship between the informal (customs) and formal (laws)

that shape an economy. Property is on the side of the formal. Increasing formalisation of

property rights is therefore said to be positively correlated with tenure security. In the continuum

of formalisation-as-security, a slum-dweller is often said to be on the end of the informal, and

therefore the insecure, lacking the registered leasehold or the freehold which comprises the gold

standard of tenure security on the opposite, formal and secure, end of the spectrum.2 This logic

of titling was central to the 1985 World-Bank-funded Slum Upgrading Project.3 As an in-situ

titling of where he was already squatting, formalisation was expected to incentivise the slum-

dweller’s own desire to upgrade the property which upon titling he now confidently knows is his.

This same wisdom is reflected in the proposed draft model of the Property Rights to Slum-

Dwellers Act, the Jawaharlal Nehru National Urban Renewal Mission, and the Rajiv Awas

Yojana scheme whose vision is that of a ‘slum-free India.’4

The investment said to take place once the slum-dweller feels secure in his tenure is not the only

benefit that apparently follows from formalisation of his property right. Upgrading his home

would increase the value of the property. The formal home can also now be reached by the

infrastructure provision of the city. It is now taxable and can raise the money needed to provide

this infrastructure. Proof of home ownership can fulfil a prerequisite for a loan application at a

bank to provide the slum-dweller with access to credit. Now integrated in the city’s formal

economy, the slum-dweller is part of the circuitry whose quantitatively-measured economic

growth he could increase. The call to formalise property rights is therefore a strategy for a mixed

set of not necessarily coterminous development goals. These goals might be imagined in a

sequence: first the improvement of slums, then their eventual reduction in number, followed by

the alleviation of the poverty that apparently they both cause and out of which they are caused,

and finally the increase in GDP and HDI that represents overall development of the territory.

Titling has been subject to a variety of criticisms. A private developer could persuade the slum-

dweller to sell to him the title so that he may then develop a commercial complex on that plot. A

slum-dweller could initiate and approach a private developer to sell his own title once he

speculates a profit from the increasing land value and goes to squat elsewhere. Perhaps the slum-

1 Hernando de Soto, The Mystery of Capital: Why Capitalism Succeeds in the West and Fails Everywhere Else,

(New York: Basic Books, 2000): 46-47, 56-57, and 61. 2 Paramita Datta Dey, Anisha Sharma, Shayak Barman. “Land Tenure Security: Is Titling Enough?” National

Institute of Urban Affairs, WP 06-03 (December 2006): 1-3. 3 Deepika Andavarapu and David J. Edelman, “Evolution of Slum Redevelopment Policy,” Current Urban Studies

1, no. 5 (2013): 189-190. 4 Om Prakash Mathur, “Slum Clearance to Property Titling: A Legislative Framework for Slum-Free Cities?”

National Institute of Urban Affairs, (December 2006): 1-3.

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dweller will refuse the title to begin with on the basis of the associated administrative charges

and/or subsequent tax for provisions he was already receiving or making do without. Perhaps a

slum mafia gets in the way of everything, violently taking the rights to land, razing the homes,

and realising the financial gains, all with full knowledge of a government that is too weak to

respond or paid off by this same mafia. The slum-dweller could be very pleased about the new

title, but once his neighbour has decided to invade his plot, the slum-dweller cannot contest the

invasion in an ill-equipped and overburdened court system. Perhaps titling does work as intended

but only when done in conjunction with a variety of other poverty alleviation strategies. Or with

general awareness about the pricing system, a strong judiciary, access to credit, an incorrupt and

functioning government, antitrust laws that promote a competitive real estate industry, a slum

community organised to defend itself, an education through which the slum-dweller can realise

himself, and so on. Perhaps titling does not work because none of these things exist. Or because

these other things are in fact more crucial for what titling seeks to accomplish (for example, a

tenure security that leads to poverty alleviation and/or economic growth). Titling is sometimes

part of a looser package of legal prescriptions for developing countries referred to as ‘rule of

law,’ where formalisation of property rights for tenure security is accompanied by calls for

contractual simplicity, clear rules over vague standards, minimal judicial discretion, zero

tolerance for corruption, strong enforcement, and an independent court system.5

Unconcerned with titling’s scientificity, these criticisms keep intact the notion that titling could

be something coherent, even if only ideal and never realised in the hustle and bustle of

implementation. Furthermore, they imagine that the relationship between property rights and

development sometimes could be a scientific model when proposing that the outcomes of

formalisation could be predicted and guaranteed, inducted upwards into a theory that, now

generalisable, could be scaled horizontally and implemented downwards elsewhere, with an ease

and a flexibility that manages both to adapt to a foreign context and to keep unmodified its core

principles. It seems there are at least two ways to probe this aspiration to become a science where

property is concerned. The first is to focus on titling, and the second to examine two major

analytics about legal entitlements as they relate to proposed outcomes of slum development.

2. Titling and Ideas about the Informal Slum

In titling, we could try to understand exactly what such a programme means when it evokes the

informal as something property rights could subsequently formalise to create development. We

could ask whether formalisation of the property right of a slum-dweller to his home through a

titling scheme involves more than just the mere grafting of a title onto what is imagined to be

already clear, even if informal, delineations of property.

On the one hand, nearly everyone might agree that, yes, formalisation of a property right means

more than the issuance of a piece of paper called a deed. That deed is somewhere catalogued, it

is returned to for research, for tax, for surveying, for surveillance, it is shown to a bank which

acts differently in its presence than it would have in its absence. Without all of this, formalisation

would not produce the effects that it claims result from it.

On the other hand, the difference at stake is not in whether or not titling performs something

5 David Kennedy, “Laws and Developments” in Law and Development: Facing Complexity in the 21

st Century, eds.

John Hatchard and Amanda Perry-Kessaris (London: Cavendish Publishing, 2003): 17-26.

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more than itself. The difference at stake is whether titling affects an existing set of social

relationships in that it changes them or (instead) whether titling can, at once, formalise these

relations as if crystallising them as is but without actually or meaningfully altering them. An idea

lodged in this latter contradiction of formalisation is the idea of the informal as not just ‘without

law’ but without any coherence altogether. If only formalisation provides security, the home is

not shelter for the slum-dweller but a transitory event. If only formalisation provides a basis for

evaluation, it must mean the slum-dweller is without solid understanding of value because true

value is only the value that results from bringing a legal asset into a formal economy. If only

formalisation converts the asset into property, the slum-dweller knows nothing of belonging—

the space he lives in is a haphazard and arbitrary phenomenon, there is no real distinction

between himself and his neighbour without the borders of the law, and therein the slum as an

informal space is something like chaos embodied, where maybe the only law is the law of the

jungle.

There are development practitioners who likely have no such image of ‘the slum’ in their heads,

even without being hard-pressed to describe what vague and awkward conglomerate of

sentiments they do have strung together when they imagine the word. Indeed, there are

development practitioners who proceed with the image of the slum as a rich place, of dreamers,

of a community solidarity untouched by a possibly bleak modernity but full of the

entrepreneurial activity that comes before and within modernity nonetheless. Market forces are

indeed already at work in the slum. The market precedes the law even if the law strengthens it,

bringing the bargain into the legal price system. If only this informal economy could be validated

somehow—apparently, the slum’s own self-validation is not enough—because once recognised

in the legal ambit, all sorts of growth, economic and otherwise, is possible. Here exists the slum

as an informal space that has an internal logic, that of the market, which the law would only, but

significantly, amplify.

Both these visions of the slum are united in their belief of formalisation as a transformative

contact only to the extent that it is a covering-over. It is a formalisation that is an intervention in

an object which is only seen to be benefitting and by a subject who is never seen to be

interfering. The practitioner exacts his target with precision, affecting only it and nothing else.

For this to be possible, he must be able to conceive of ownership in the slum as something

legible, something that he need only to trace as a technical activity.

This imagined clarity may not in fact be so clear and instead involves a whole host of questions

to be re-constructed, and in this reconstruction, altered, to create a formal property regime.

Formalisation must alter whatever is said to be already at work in the slum because the informal

is neither already the logic of the formal waiting to be realised nor without any notion of order

itself. In other words, informal customs are not so vague as to lose coherence altogether, and it

may very well be possible to make sense of them—certainly those inside the slum do for their

lives to operate to begin with. But at the same time, these customs do not already take on the

form of the systematicity which only formalisation is said to codify effectively. Instead they

must be rendered legible through questions the titling scheme necessarily involves. Who really

does squat in that sector? The owner? A tenant? Should the tenant be considered de facto owner?

If so, when? Should titles be uniformly given to the head of households? Is the head of the

household the father, if there is one, and what would it mean to put the mother’s name on the

title?, or another relative, perhaps the eldest, and if that varies in this neighbourhood block, does

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it make more sense to approach titling through rules or through standards?

So far, these questions relate solely to ownership. But if property means more than just a right to

own and instead involves a whole bundle of rights (to use, alienate, exclude, rent) and legal

duties (to cultivate, allow tenancy, prevent dangerous conditions), the set of questions and

implications involved in formalising property rights go beyond titling as only assigning or

reflecting ownership.6 We might have to decide if and how we want owners to be able to lease or

sell the property, whether they can or should operate their businesses from their homes, how they

should take care of it, and so on. This involves reference both to a regime of private rights in

which police intervention or civil lawsuits can be brought to bear if need be as well as a system

of regulatory overlay which defines the relevant role of administrative agencies.7

Any given property law regime is too intertwined with other legal regimes to extract from it the

always-same and consistent set of entitlements to then deploy as a best practice whenever

questions of design become too overwhelming.8 For example, even if only consider property as a

home, the nature of the property owner—a corporation, the state, a family, themselves all

varying legal demarcations—will bring into our ambit corporate, public, or family law.9 In any

country, these legal regimes will overlap in diverse and inconsistent ways.10

A titling scheme

faces these questions while it also attempts to resolve a similarly dizzying array of informal

property customs already at work in the slum which formalisation is premised to attempt to

grasp. That titling could bypass all of these questions that strike at the heart of its proclaimed

mission to formalise property relations and instead copy-and-paste a model property regime onto

its target, either because it sees there its own logic waiting to be discovered or a blank slate onto

which only it could provide structure, is one of the ways the dream of titling is a dream of a

science.

3. Interlude: Law and Markets

Perhaps, as seems to be the case in Mumbai, titling openly embraces itself both as an

intervention that does indeed interfere in a slum’s social arrangements and as intermeshed, and

irrresolvably so, with other legal regimes. The Slum Rehabilitation Authority’s slum-

development scheme is in-situ in that slum-dwellers remain on the parcel of land they were

already occupying, but they are now rehoused in a multi-story apartment building, the feature of

the scheme that also makes it a rehabilitation programme. A land plot in a slum is divided in two.

Private developers build the complex on one portion and provide the flats for free to the slum-

dwellers, who are housed in transit accommodation. In turn, the government authority will allow

the developers to clear the land where the slum-dweller formerly squatted (the other portion of

the plot) and develop, at a concessional floor space index greater the law typically allows,

buildings to sell on the open market. This feature, and that often times the squatted land has great

6 David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” Accounting,

Economics, and Law 1, no. 1 (2011): 31. 7 Duncan Kennedy, “Legal Economics of U.S. Low Income Housing Markets in Light of ‘Informality’ Analysis,”

The Journal of Law in Society 4, no.71 (2002): 78. 8 Duncan Kennedy, “Property as Fetish and Tool: Duncan Kennedy on Property, the Commons, and the Law,”

Grassroots Economic Organizing, accessed 24 June 2014, http://www.geo.coop/story/property-fetish-and-tool. 9 David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 31

10 Duncan Kennedy, “Property as Fetish and Tool: Duncan Kennedy on Property, the Commons, and the Law.”

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profit potential as prime real estate, attracts the developer to be involved in slum rehabilitation to

begin with and ensures a given rehabilitation project’s financial viability. The ownership of the

new building will be in the name of the housing co-operative society which slum-dwellers must

form to qualify for rehabilitation to begin with, and it will include the names of both the owner

and the owner’s spouse in a 30-year renewable lease at nominal rent to the government. Other

conditions of eligibility apply both for slum-dwellers (among them: proof of residence prior to

the year 2000 in an officially certified slum through select documentation such as name on

electoral roll) as well as for the developer (among them: bearing all the costs that transit housing

and rehabilitation will entail as well as a discounted premium if constructing on government land

and ensuring 70% of the slum-dwellers in a plot agree to a proposed project). The slum-dweller

may not transfer the new flat in any manner for 10 years. Where the state deems a site to be

hazardous or difficult to develop, or where it deems it must use it for public purpose, the state

may rehabilitate slum-dwellers ex-situ. The state may evict those slum-dwellers who are not

eligible for rehabilitation or those who form the 30% non-willing to live in the new

accommodation.

This is only one way to paint the crude brushstrokes for a summary of the most recent slum

intervention in a city with a longstanding record of crafting and deploying schemes. Each

rehearsal of the history of Mumbai’s slum interventions poises this latest iteration as part of a

trajectory in which certain actors are made discrete and their importance to the historical

outcome is made to ebb and flow depending on the particular expert’s narrative in question.

Actors often include the government—typically the state of Maharashtra, itself divided into the

elected officials who devise the slum intervention and the appointed civil servants who interpret

and implement it through a web of agencies—the private sector: an unidentified mass of

developers who all run, as if robotically prey to, the same logic, and finally the slum-dwellers

themselves which represent possibly the very poor or the working class, class affiliations which

the expert sometimes fleshes out in the historical narrative, sometimes avoids, or sometimes

describes as aspiring- or lower-middle class. Where history is a site for the expert to mine to

design a slum development model, these actors are variables in that their actions vary and in this

variance, affect an end result. But apparently as a variable, their variability has a limit or else, by

virtue of what the expert deems their particular and constitutive interest, the line between them

and another actor would begin to blur. This means the private sector is after profit, the slum-

dwellers are out to improve their own lives, and the government pushes its legislative capacity,

designing and making into policy the model which embroils itself and the others into a dance of

implementation. Put another way, the expert’s policy model will often assume each actor

behaves in a way unique to them and that defines them as a distinct actor to begin with. The

work of modelling is to tease out the behaviour (which the expert himself has defined) by

dangling incentives or disincentives that guide the actor along in a way attuned to the expert’s

operative goal in hand. The social terrain is the laboratory for the policy scientist who is in the

difficult position of orchestrating through institutional design the scope for variables to vary only

predictably so that by their own accord (as the expert sees it) they end up producing the policy’s

intended outcome.

Among other things, one relevant policy instrument at hand for slum development is law. Its

utilisation’s ideal outcome is a certain sort of economic development, ideally a poverty

alleviation that goes hand-in-hand with economic growth, both perhaps produced alongside one

another until they merge into the same. Law seems to have an integral role when it comes to

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constructing the value of an asset; certainly the wisdom about formalising property rights is

girded on this belief. From the delineation of the asset as a discrete entity, to the ways in which

one might assess and measure its perceived value, to the management of this value’s distribution,

law is there at each step building what we otherwise call the modern economy. One relevant

relationship in which law is implicated in the construction of economic value for slum

development is the relationship between land and property insofar as property defines

entitlements to own, to cultivate, to reap, to sell, etc. Yet law has not always been integral in

generating value from land. Prior to or in the absence of law, people did indeed make

economically productive use of land, and assets in general, from which they derived value. There

are several familiar narratives about why and how: among them is the story of the development

of human society premised on scarcity. Scarcity could be inherent to a group – a society could

somehow know of what it has never thought it could have and want it still. Or perhaps, scarcity

could be constructed after the fact. For example, where a population came into contact with

another and encountered the relative difference in resource allocation between the two and where

this encounter inculcated in each a desire for what it came to see as lacking within itself that the

other could fulfil, trade took place. A given asset could be conceptually evaluated in terms of

another asset, like one’s lack in terms of the other’s surplus, and so, a relationship of value could

be constructed.

Value therefore does not inhere in the asset prior to some sort of assessment of a relative lack

and surplus. Even for a society that has no contact with another, its own allocation and

distribution of a given asset will determine its value relative to the lack and surplus as seen from

the people who believe they stand to benefit from having that asset. In this scenario, the

distribution and allocation of an asset are responsible for its value construction, but more

crucially, its distribution and allocation are themselves the result of contestation borne out of

competing desires, themselves shaped by a previous state of distribution and allocation. This idea

is distinct from a theory of economic value as the result of forces of supply and demand. Here,

supply and demand would each constitute the other. There would be no supply without an idea of

what one demands and therefore ought to lay claim over. Both supply and demand would be the

tentative and still dynamic outcome over a conflict over desired assets whereby some have

managed over others to hold onto and enforce their entitlements over the desired assets,

themselves only deemed valuable because of a prior outcome of contestation. There is nothing

‘natural’ about desire or about entitlements. They might have an internal logic once codified, but

because they constitute and are constituted by one another, they are always up for grabs.

Contestation could be described as the mediation of desire into an entitlement over something.

Land in particular seems to exemplify the need for contestation to make and enforce a claim of

entitlement because it requires great effort to seize and to occupy.

Even if law as we know it is absent, it seems challenging to conceive of value construction from

land outside of any system altogether that organises a distribution of entitlements. Where land is

concerned, those who have already laid claim to some land must be entitled to inherit the

agricultural training to produce, through their own labour or their claim over others’ labour, what

the land can cultivate, and they must devise how the potential revenue of the yield should be

allocated between them, their workers, and possibly others. Therefore, whether created

piecemeal or self-consciously at once, law will reflect, in both the professional process of its

codification and as a legislated or official outcome, a particular moment of distribution and

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allocation emerging from contestation.11

If this is the case, a market, formal or otherwise, is

indeed always and already about entitlements, legal or otherwise, about who can claim access to

which resource, the scope of what they can do with it, and how successfully they can have that

claim enforced. What will matter for development is how these entitlements are contested to be

formally arranged and what contestation and informal re-distribution happens as a result, not a

theory of whether law in general should be clear and formal, fast or slow. Where a science of

development is concerned, an expert might try to imagine the exact, necessary configuration of

entitlements in a model to produce the intended outcome.

4. Two Analytics for Property Rights and Development

What could then be said to be operative in the latest theory of development for Mumbai slum

intervention insofar as formal and informal entitlements regarding property are concerned?

Unlike the slum-dweller, the private developer, by virtue of already having the capital through

previous sales he was entitled to transact, is in a position to be able first to finance construction

and then to repay the loan through the profits he will be entitled to reap from the commercial

division of the land parcel. The land parcel itself is largely the property of either the state of

Maharashtra, a territory whose history is the lineage of empires who seized it through battle, or

of Mumbai’s municipal corporation whose ownership, and establishment of itself as an owner,

dates back to British colonial authority. The slum-dwellers’ claim to the land is not a legal one,

and the political infeasibility of the government’s evicting and relocating them outside of the city

strengthens this claim. Financially, the government is unwilling to itself finance the construction

of enough housing to accommodate the sheer number of slum-dwellers. Even in cross-

subsidising this construction through the private sector, property values outside the city—where

there might be more available space to house a greater number of the slum-dwellers—might be

too low, itself the function of a history of claims that determined this value as an outcome, to

attract developer interest. Politically, a nexus of politicians and activists vying for constituencies

within the slum further validates the squatters’ entitlement to the land which they occupy. The

slum rehabilitation policy recognises these informal claims, whether grudgingly, realistically, or

respectfully, and it realises the possibility of creating economic value through housing

development on the high-value squatted land.

a. Efficiency

Why does the government not itself perform the developer’s role in its proposal? Why involve

the private sector at all? Is it something inherent to the way private claims to property generate

value from land that a government’s sovereign claim cannot? Where one sees the rhythm of

Mumbai slum interventions’ history as an increasing withdrawal on the part of the government in

acquiescence to the private sector, it could very well seem plausible to imagine the government

as hesitating to finance interventions.12

Where this plausibility becomes the basis for the nature

of government in relationship to development requires some more scrutiny. After all, if making

and wielding the law is the purview of the government, and if development is a function of the

interaction between formal and informal entitlements, does not the government have an upper

hand or at least a leading role in affecting the economic result by rearranging and allocating legal

11

David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 11. 12

See Jan Nijman, “Against the odds: Slum rehabilitation in neoliberal Mumbai,” Cities 25 (2008): 73-85

for one characterisation of this history.

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entitlements? Some suggest it is this very role, described in the catch-all category of ‘regulation,’

from which government should refrain because markets are more efficient in producing an

outcome that maximises economic performance, a maximisation for the efficiency proponent

which characterises the best sort of development.13

Does property in the hands of the private sector produce more development than it could in the

hands of the state? From the start to say that markets produce efficient outcomes is to define

development in a particular way. It is to say that buyers and sellers already know what is best for

them. What they need is the right signal to transact. This signal is the price of the good or service

in question. Once the government’s subsidies, tariffs, limits on foreign investment, other

import/export controls—in fact, almost everything set up to define the industrialising state

apparatus in India prior to liberalisation—are dismantled, this price could finally be undistorted

and reflect the actual willingness of the buyers and sellers to transact. If it were any higher or any

lower, resources would be distorted and therefore their value underutilised: less would be

available when there was more willingness to buy or vice versa. Undistorted, the market would

produce the most value possible from transactions in a given scenario of supply and demand. It is

the maximisation of this value that defines efficient development.

Within this rubric, where does one know to draw the line for efficiency? Do taxes on polluting

industry or laws stipulating a minimum age for labour, or a minimum wage, make markets

inefficient? Where critiques of efficiency posit that markets will not by themselves arrive to

outcomes that are friendly to labour or the environment, or other goals deemed socially desirable,

these critiques still maintain the role of the state through the law as a limit, stepping in only when

it said to be needed. Of course, market efficiency still requires the state to act through the law, so

law is not always just the regulatory hurdle for markets. Where the Slum Rehabilitation

Authority is concerned, the statutory amendments that make its own existence possible, the

change of existing development control regulations relating to floor space index, the leasing of

the land to the developer for the sale component during construction, the provision to allow

transfer development rights, etc. are some of the major legal manoeuvres that facilitate the real

estate market to function in the Mumbai slum rehabilitation intervention. To this end, it might

appear that the Slum Rehabilitation Authority’s intervention meets some key features of the

efficiency paradigm. That buyer and seller will know the best way to maximise their resources

could appear as a premise, if only implicit, in letting developers approach slum-dwellers or vice

versa to implement a rehabilitation project.

If in fact this efficiency paradigm describes this intervention, is the land’s value realised to its

most productive potential? If measured financially, that land has long since seen commercial

business operate and generate revenue for slum-dwellers as both owners and employees. It is not

clear if rehabilitation will be a lasting disturbance for the businesses or a temporary halt on the

way to greater productivity. Will increased proximity to their new upper-middle class neighbours

mean an expanded consumer base for the business or will it phase out once it appears the new

tenants prefer luxury goods and services provided elsewhere? There is also the possibility that

13

See Alain Bertaud, “Converting Land into Affordable Housing Floor Space,” The World Bank, Policy Research

Working Paper 6870 (May 2014) for an efficiency proposal regarding land and affordable housing; See Vinit

Mukhija, “Enabling Slum Redevelopment in Mumbai: Policy Paradox in Practice,” Housing Studies 16, no. 6

(2001): 791-806 for a brief genealogical description of market-enabling and the role of government versus market in

slum development.

13

the usual clientele of the slum-dweller is priced out—displacing the old consumers instead of the

old business. This sort of gentrification might mean displacing the slum-dwellers altogether.

Another scenario could involve slum-dwellers’ illegally renting out their apartment, either by

themselves squatting elsewhere or within vacant space in the new building. Or these new tenants

might settle in or near the building without the explicit consent of the rehabilitated slum-

dwellers. Or perhaps everything goes according to the plan. The debt-ridden government earns a

significant premium when the developer constructs on its land. The slum-dwellers get a free

apartment, and the developer still makes a substantial profit because the location is prime real

estate. Upper class citizens get luxury housing where it is locationally desirable.

If it is efficiency which is the guidepost for how to design policy, just letting buyers and sellers

do their work tells us nothing about how to make choices regarding design or choose among

possible outcomes the most desirable one for an end vision. For example, if it had so desired, the

SRA could have designed the total policy implementation process (from registration, to transit,

to construction, to the eventual rehabilitation and commercial sale) to happen more quickly.

Introducing regulation instead, the policymakers may have wanted to ensure concern for the

slum-dwellers’ consent and participation does not get swept up in a drastic transformation of

their social life. Describing the design intent this way means describing the regulation as a hurdle

for the market in the name of the social. Yet we cannot yet say whether this will be an obstacle

preventing the delay of the inevitable financial gains of commercial sale, or whether it will make

the scheme’s overall implementation, in this slum and in another one, more socially

sustainable.14

In other words, from the onset, it is undecidable within an efficiency rubric as to

whether regulating consent will produce a more or less productive outcome when it comes to

slum development, just as it is not clear in the first scenario above whether gentrification will

increase or decrease slum-dwellers’ business productivity.

Among the scenarios outlined above, it could very well be that there are multiple efficient

outcomes. Or it could be that efficiency would run counter to our idea of development. If it is

economic growth we desire as development, the most efficient outcome could be only a one-time

spurt.15

Or if it is reducing the number of or improving the quality of life within slums,

gentrification could mean just relocating the problem elsewhere. Among these scenarios, and

there are many other plausible ones, it is impossible to know which is the most efficient outcome

of the design—in which actors have utilised or rearranged entitlements to maximise the use of

the resources—without recourse to something exogenous to the efficiency analytic. Perhaps it is

a theory which could tell us in whose hands resources’ financial value would most accumulate to

benefit all over time. Or a theory that ex-situ rehabilitation would be a disaster in terms of its

political optics and/or infeasible altogether. Or a theory that prioritises the budgetary constraints

of the government to argue against its financial involvement in rehabilitation. One could

endogenise all of these concerns to then develop a more robust model to predict a greater variety

of outcomes and then design a policy to lead to the most efficient one. It is possible to do this,

but the moment of decision will necessarily involve something exogenous and would not be

produced by the model itself. It will be the function of an argument. If one has mapped plausible

outcomes of a slum rehabilitation policy, including the possible effects of gentrification, of poor

14

On this point, Prof. Kennedy cites Karl Polanyi’s study on Western industrialisation, Karl Polanyi, The Great

Transformation: The Political and Economic Origins of our Time (1944) (Boston: Beacon Press, 2001) in David

Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 19. 15

David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 39.

14

media coverage, of litigation, and of multiple other consequences, then the decision would pivot

in large part about how to prioritise the relative weight—perhaps a function of its likelihood, its

capacity to benefit or harm, to be mitigated or enhanced, methodologies themselves up for

debate—among these competing factors. Perhaps one can surrender all these factors to a

common measure through quantification and ask the model to tell us what to do, but how to

perform this quantification, and the prior decision for which variables one should make discrete

so as to then turn them into the correct number, would be subject to the same questions about

how best to evaluate their comparative importance.

Furthermore, the set-up of the efficiency analytic will require holding static some set of

resources. The examination of some likely outcomes of the current efficiency-inducing

rehabilitation policy only could have been possibly by exogenising and holding still assumptions

about how the land’s property regime was set up, who had how much capital to invest or spend,

where labour can work, etc. To the extent that these resources are themselves functions of

distributed entitlements, it is possible that these very entitlements could be arranged another way.

Indeed, it is difficult to think of what resource—land, capital, labour—is not a function of a

plastic and fungible legal regime which defines formal entitlements about how the resource may

be utilised.16

If to say markets are more efficient than governments seems is instead to say that

we want to rearrange legal entitlements to speed up the ways in which private companies can

transact, with whom they can transact, across more borders, etc., then the difficulty in

establishing whether this rearrangement in fact produces efficiency arises from whatever

baseline this efficiency analytic must necessarily assume in drafting a model: perhaps factor

endowments regarding land, a pricing system, capital ownership, etc. These baseline

assumptions will always involve a distribution of legal entitlements, about what it means to own,

extract, sell, purchase, who can do so, and under what conditions. This distribution is not a given.

It might appear congealed in law, but it is always up for contestation and subsequent re-

distribution.

b. Empowerment

Maybe we could try to make our job a lot easier by throwing efficiency to the wayside and

adopting a pro-slum framework to design the scheme so as to maximise the gains of the slum-

dwellers, even if inefficiently. Among the words we could use to describe this approach, we

might choose ‘empowerment.’17

To ensure the slum-dwellers’ apartments were both free and

high-quality, we could either keep the cross-subsidy with the private developers or develop an

elaborate state apparatus of in-house architectural/construction expertise or floating tenders for it,

coupled with intense subsidies. In either case, some further modifications might seem obvious:

100% consent of slum-dwellers to pursue rehabilitation and no limit on the size, shape, setting,

or style of their individual flats or of the building as a whole. Let us surrender the development

of slum rehabilitation to the best and brightest minds of architects and builders in the world. If

we have chosen to involve the private sector, and if the costs of the rehabilitation apartment run

counter to the private developers’ freedom to exercise profit maximisation, the government could

leverage a variety of tax breaks, further loosen regulations around floor space index, and grant

more transfer development rights to the developer. Or—if we think these gains for the private

16

David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 41. 17

For an example of an empowerment framework, see Sundar Burra, “Towards a pro-poor framework for slum

upgrading in Mumbai, India,” Environment and Urbanization 17, no. 1 (2005): 67-88.

15

sector ought to be tempered lest commercial sale on the same plot hamper aesthetically,

environmentally, or economically the value of the slum-dwellers new apartment—the

government could forego cross-subsidising by instituting in its place a target quota akin to the

central government’s affordable housing requirements for private developers but a much more

intensified version of it, demanding what the developers must do and how they must do it.

With law’s capacity to distribute at the forefront here, we should not be surprised to hear any

outcries from elite citizens and the real estate industry about what might be perceived as a drastic

hand-out to the slum-dwellers at the expense of projects targeted towards higher income

demographics (whose property might be taxed heavily to finance the project), of the real estate

industry’s growth and its contribution to Mumbai’s overall economic growth, or the

government’s own credit rating if it has financed the rehabilitation through debt. We could avoid

these scenarios and focus through simplification on minor modifications of the rehabilitation

policy, keeping intact cross-subsidy with the private developers but ensuring they get the consent

of each and every slum-dweller and not limiting the size of each flat within the building. But

questions about distribution are not outside of the picture. Instead, they are re-represented in a

host of challenges that would follow from even the most utopian of proposals that attempt to

maximise the gains for the slum-dwellers.

The organisation of the slum-dwellers’ consent, at the moment of the project’s approval and

throughout its implementation, could be the crucial site to examine to determine the extent to

which the policy is ‘participatory,’ that is, distributing in a manner we deem equitable or, rather,

prioritising the beneficiary. As we start to try to listen to this beneficiary deeply, what we hear is

that any given slum community is likely not a monolith. It is rife with all sorts of its own

differences which we typically associate with ‘diversity.’ Where the existing policy requires the

land parcel on which the development will occur and where the housing co-operative society be

one and the same parcel, it might be that this diversity even breaches self-segregation. Where it

does not, diversity will not stop at the level of either caste or religious based self-segregation.

Within the given caste or religion, divisions regarding gender/sex, age, income, and the

community’s own power hierarchy also cut across the group. Of course there is also the desire to

participate or not to participate in a rehabilitation scheme, or how to participate, or ambivalence

towards it, not readily associated with the aforementioned categories which we usually

demarcate in the category of ‘identity.’

To this end, there are divisions laterally across communities in the slum, vertically within even

the most homogeneous community, and all the way down to the individual divided within

herself. The more you recognise the heterogeneity of the community’s desire, the more attractive

coercion becomes as an option to unify the diversity at a particular juncture to move the process

along. We can call this a classic political problem of collective representation. If the co-operative

adopts a one-person/one-vote principle, who will frame the topic on which to vote? The SRA

requires each housing co-operative to elect a chief promoter. How will she frame the topic

recognising her responsibility to the group as an entity whose collective interest she must help

forge out of competing desires including which are her own sensibilities about the direction of

their future? It is of course possible to do this well and to do this poorly. It will depend on the

dynamics of the group in question, all the different factors we project onto the term ‘leadership,’

and surrendering these factors and dynamics to the actions and reactions of whatever and

16

whomever is deemed constitutively outside the collective.18

If it seems right that ensuring by law that the co-operative is present in some form and taken

seriously at meetings with other stakeholders throughout the development and implementation of

the new property regime would encourage the possibility their gains are maximised as the

process evolves, then still the host of other political questions about collective representation are

not answered merely by virtue of the collective represented at ‘The Decision Table.’ There are

many decision tables internal to the collective itself, and they present serious choices that will

determine whether the possibility of maximising gains is realised or not, to what extent, how

these gains are shared, and how their future is sustained.19

These other questions are relevant

both for the co-operative as well as for the ‘empowerment’-minded policymaker. They include

how to react in the face of gentrification (to preserve the gains in the co-operative as a sort of

enclave of the co-operative or to prevent the displacement of other non-organised slum

communities). Where the size of the individual family flat is a site for contestation between the

developer and co-operative, an analogous dilemma is repeated. The capacity to realise these

preferences would depend on a given individual in the co-operative or the whole co-operative’s

ability to coerce and convince the developer to meet their demands for flat size. Is it more

important that the preferences of a co-operative or someone within the collective take precedence

over a principle of fairness to provide the same housing to slums across multiple co-ops? Does

maximisation mean each co-operative should grab as much as it can even if it means flat size is

erratic across the slums or would such a free-for-all mean rehabilitation reproduces the power

asymmetry across the slums, with those at the top able to get the best apartments while those at

the bottom are left with only the most basic flats?

Furthermore, if we do not want to let the private developer’s interest in where the most profit

would be reaped guide which slums they approach, we would have to decide whether to

prioritise the most upwardly mobile slum communities (perhaps those at the cusp of LIG and

above) who can be more quickly integrated into the middle class and lower the total number of

poor or to target those at the very bottom (EWS) who might be seen as most in need of

rehabilitation.20

By now it should be no surprise that the costs of gentrification, of slum targeting,

of unifying the collective are questions about allocation. Each choice in these binarised knots

might be supported by one economic theory or another, but they remain up for debate.

No theory whether poised for or against the catch-all category of either efficiency or

empowerment will be able to decide as a general rule of thumb or ‘best practice’ in whose hands

property rights would most realise the gains we associate with ‘development,’ whether as

poverty alleviation or profit generation, without rehearsing through intimately political questions

about allocation and distribution (including those arising when poverty alleviation is at odds with

profit generation), a rehearsal that whittles away at the capacity for this theory to emerge as a

rule, as something generalisable, predictive, universal, and indeed, scientific. Questions about

18

For an explication of the problems of political representation vis-à-vis NGOs, see Sapana Doshi, “The Right to the

Slum? Redevelopment, Rule and the Politics of Difference in Mumbai,” (PhD diss., University of California at

Berkeley, 2011). 19

That even a particular institution, the limited equity co-operative in the case of the following, designed with the

empowerment of the poor in mind would re-play within itself historical questions about political organisation, see

Duncan Kennedy, “The Limited Equity Coop as a Vehicle for Affordable Housing in a Race and Class Divided

Society,” Harvard Law Journal 46, no. 1 (2002): 85-125 20

ibid

17

how to manage entitlements are not settled once and for all at the moment of design so that their

resolved answers can then be put to implementation. The thought exercise is built into the

practice, and implementation drives theory to the local until it is less of a formulaic model and

more of a record of the contestations it faced along the way.

*

Chapter Three: Microcredit

1. Microcredit in the Formal and Informal

Like a title, microcredit is said to provide a stable framework which by its nature facilitates

economic growth. The borrower in the slum community who desires to start/expand his business

or buy a home could go to a microfinance institution to apply for a loan for which he would

likely not qualify at a typical, commercial bank. Whereas these commercial banks would need,

by law, a salary slip and/or proof of ownership of the current home as requirements to lend,

microfinance institutions often require neither. Slum-dwellers in the informal sector who might

want to access credit if they desire to finance the purchase of a home might also be the least

likely to qualify for this credit. The collateral which the traditional bank requires is the very thing

which a slum-dweller might want to finance through a loan: a home (for which a deed is legal

proof of ownership) or a formal business (for which a salary slip is legal recognition of income).

Between the commercial bank which refuses to lend to them and local moneylenders whose

interest rates could be exorbitant, the slum-dweller apparently has nowhere to turn. Microcredit

aims to fill this gap. Credit access is here a stand-in for development, premised on the belief that

getting poor people access to money in a way that makes it possible for them to repay it later,

even if with interest charged, will facilitate economic productivity or social gain either by

starting a business that employs labour and generates capital or by financing a home that will not

only provide shelter for the slum-dweller but also accrue market value over time.

On the one hand, what was seen as the strength of a titling scheme—its formal nature, the

security this formality provides, and the investment opportunities it enables or incentivises—is

reversed for the microfinance proponent. The formal nature of commercial lending (its

contractual terms, the requirement of collateral) is exactly the problem that compels microcredit

which claims informality in that it does not use legal recourse to perform the loan transaction or

ensure its repayment. This does not mean institutions responsible for providing or facilitating

microcredit loans operate outside the law. The central government must authorise them.

Microcredit is rather said to be an informal practice to the extent that some of the major legal

obstacles preventing access to a formal loan are displaced.21

In other words, while the

relationship between the state and the microfinance institution may well be a function of formal

law, the relationship between the borrower and the lender is where the claim to informality is

situated. Away from the mediation or interference of the state, which the contract or collateral

can here symbolise, this informal relationship between the lender and borrower is therefore

supposedly closer to the population whom the lender professes to serve. Because contracts are

laden with rigid and universalising terms, and because standard collateral represents the lack for

21

Antara Haldar and Joseph E. Stiglitz, “Analyzing Legal Formality and Informality: Lessons from Land-Titling

and Microfinance Programs,” in Law and Economics with Chinese Characteristics: Institutions for Promoting

Development in the 21st Century, eds. David Kennedy and Joseph E. Stiglitz, (Oxford: Oxford University Press,

2013): 113-114.

18

which the slum-dweller desires a loan to begin with (proof of home ownership), both legal

formalities apparently misunderstand the nature of the client. To design the microcredit scheme

without reference to the state in the form of contract or collateral is purportedly to put aside the

foreign jargon and arbitrary even meaningless regulation of formal law and in its place embrace

the language of the slum-dweller himself.

The policy trajectory of Indian banking as it relates to microfinance seems to suggest this sort of

idea: of proximity as authenticity. Banks were dispersed across the country especially in its rural

heart and linked to self-help groups. Formed prior to or after the entry of an intermediary

microfinance institution or NGO to which it will then be linked, a self-help group is an initiative

whereby members will pool together some of their savings and decide the terms of their lending

practices themselves. The self-help group may well be in charge of all of the decision-making

regarding lending criteria including amortisation schedules, compulsory savings amounts,

interest rates, distribution of surpluses, and any or all other aspects of microcredit deemed

meaningful or relevant. A role of a microfinance institution can be decidedly separate from the

decisions of the self-run self-help groups as well as from the funding chain that brings capital

from the bank to the borrower. It might train, monitor, and support the financial services which

only the self-help group itself will provide to its community members. Sometimes, the bank is

altogether absent, and the microfinance institution is no longer an intermediary but instead

functions as the capital supplement for the self-help group; as such, it may set lending terms for

its clients or it may still yet leave that work to the group. In this given scenario, the role of the

microfinance institution may very well only be to provide more capital once the self-help group

is seen to be successful so as to increase either the amount of an individual loan or the number of

loans. Indeed, the relationship between the self-help group and the microfinance institution can

take on many forms of which the aforementioned is just one, representing in principle the

formality supposedly least intrusive and only there to facilitate what remarkable entrepreneurship

the self-help group already demonstrates.22

Where the group decides the terms of lending and where it does not, and where they may be no

group at all but instead a microfinance institution and its clients, the absence of the formal

contract characteristic of a loan transaction signifies for some experts that the further you get

away from law and the closer you get to people developing their own terms for lending, the

closer you are to what those same people believe and desire. For slum-dwellers to band together

to decide collectively how to lend their resources, or, in the absence of such a group, for a

microfinance institution to develop loan products that maximise flexibility without recourse to

the possibly confusing details of contract is seen as representative of democratic principles like

inclusion and self-representation. For this same institution to put aside title or salary slip as

collateral requirements is to widen the pool of those who can access credit and in this widening

reflect its developmental, as opposed to merely commercial, aims. Microcredit apparently

derives its power for ‘financial inclusion’ through its distance from formal law and its proximity

to informal self-help groups.23

22

For a portrayal of details of microfinance in India, see Jennifer Isern et al, “Sustainability of Self-Help Groups in

India: Two Analyses,” Occasional Paper 12 (August 2007): 1-48. 23

For construction of the ‘financially excluded’ as a target for development, see Marcus Taylor, “The Antinomies of

‘Financial Inclusion’: Debt, Distress and the Workings of Indian Microfinance,” Journal of Agrarian Change 12, no.

4 (2012): 601-610.

19

On the other hand, microfinance will sometimes claim formality. This is typically in comparison

to informal lending, that is, transactions done outside of the law altogether. A moneylender in the

slum loans money and gets the principal back with interest and with no legal record of the whole

process. The same goes for family members who lend to one another and may not even charge

interest. The proclaimed advantage of the microfinance institution is that, because it is integrated

within the formal economy, it can charge competitive interest rates less than that of the informal

moneylender and of greater amount or frequency than the family member and can provide,

alongside credit, other financial services through a team of staff. Connected to a bank or itself the

fundraiser of capital, formal microcredit loans can expand in geographic scope and density in

ways that are more difficult for informal moneylenders. Furthermore, informal moneylending is

by no means necessarily a practice with economic or social development in mind. As an informal

practice, it is conceived as something too varied, maybe too erratic or selective, inconsistent or

disorganised, to cohere as a consistent strategy that would promote any sort of sustainable

development. Microcredit, however, is by its nature a practice born out of the distinction from

mere moneylending. Its practice can be held together through institutionalisation in a way that

informal finance, by virtue of being informal, cannot: quotas in India for banks to lend in

government-deemed ‘priority sectors,’ of which microfinance is a part, is one such example.24

It seems then that where microcredit is informal and where it is formal, it can only be said to

benefit from both. Where informal finance is to be mimicked in the institutional design of the

microfinance scheme, it is entrepreneurial and savvy. Where the formal features of microcredit

loans are no match against informal finance, the latter is exploitative and its interest rates are

usurious. Microcredit seems to abandon and embrace formal law at the very moments most

relevant for development. Contract represents one such point of contact between the informal

and formal.

2. Introduction: Contract and Collateral

Among other things, a formal contract is said to provide clarity. A clear contract is one which

makes its terms known to both signatories and to the state which can ensure that enforcement, in

the case of breach, is accurate to these terms. If the contract is clear, then everyone knows what

they are getting themselves into. If it is clear, it is easy to be accurate, and if it is accurate, it is

fair. Of course, it is not only out of ignorance that contract is breached – a party simply may

know that it can get away with the violation. In such cases, the authority of the state to seize

assets, arrest, etc. makes enforcement of the contract effective. Formalisation then means not

only that the legal terminology of the contract is foreign and inorganic to the community life of

the borrower. Because of this enforcement mechanism, the contract also errs on the side of the

formal in requiring the state to intervene.25

Even in the case of compliance, the intervention of

the state looms as a possibility, and as such, its authority is upheld even without breach of the

contract. The power of formalisation is present throughout contract design and implementation.

Opposed to the role of the state in a formal contract are the informal norms of the borrower

24

For an informal/formal lending comparison, see Sarah Pearlman, “Flexibility Matters: Do More Rigid Loan

Contracts Reduce Demand for Microfinance,” CAF Working Papers, September 2010 and Mark Schreiner,

“Informal Design and the Design of Microfinance,” Development in Practice 11, no. 5 (2001): 637–640. 25

Haldar and Stiglitz, “Analyzing Legal Formality and Informality: Lessons from Land-Titling and Microfinance

Programs,” 113-114.

20

community which apparently serve as the means of making contract enforcement realisable: fear

of shame in the community, genuine affection towards one another, returning a previous favour

and thereby reproducing behaviour, etc.26

These norms do not necessarily require the state. As

such, these norms are said to be informal, proximal and thereby more authentic to the terms of

the borrower’s community. Of course, for state authority to be effective, one must believe the

threat to be credible; this belief is also the function of a norm as is the desire or capacity to obey.

Like the borrowing community, the formal contract is also not without a very crucial dependency

on norms to be made effective.27

Perhaps the difference between state authority and informal compliance might then be the

difference between types of norms as oppose to their presence versus their absence altogether.

Perhaps one such difference is the ostensibly organic norms of the community against which the

norms of the contract might be foreign, standardised, universalising and therefore incongruous

with the local specificity of the community. If universalising, then formal contract norms might

also be rigid, and if rigid, they must also be explicit. Informal norms of a community agreement,

however, might be understated, even vague, and therefore possibly adaptable and flexible.28

Informality’s flexibility is not the only alleged virtue which makes the microcredit scheme

effective. Pre-existing norms are also said to make the scheme’s enforcement cost-effective.

Whereas community norms alone may be sufficient for informal enforcement, like a desire to

maintain social standing that keeps one from breaching an agreement, the state must come in as a

third party to enforce a formal contract between two strangers with no prior relationship between

them to derive status or respect from one another. For a borrower and lender who live next door

to one another, their proximity and their subsequent history make it uncomfortable for one to

break a promise to the other. Legitimacy is apparently internal to the informal agreement

whereas for a formal contract, it comes from without.29

The security that formal private law is

said to provide by cushioning a transaction which two strangers make with one another with the

credibility of state authority is here apparently not as deft as the ease of grafting a scheme

directly on top of a community of neighbours. Deft not only because state intervention is costly

but also because informal enforcement could be more effective. Shame, for example, is at least

cheaper if not also stronger than imprisonment. Indeed, it itself is a type of social isolation. It

need not be brought in and explained—the social relationships that would make shame work are

already at work, and the borrower already understands shame.

For these norms to function as the microfinance practitioner would imagine, they are crystallised

in the self-help group which does peer-based lending that operates on group liability. The group

will determine whether to lend within itself or outside, under what conditions to lend, and the

group will jointly cover losses in the case of default. A group may also receive credit from a

bank or microfinance institution jointly with each member pursuing separate investments from

his allotment from a divided pool of credit. The group is a key premise for the microcredit

26

ibid 27

Haldar and Stiglitz, “Analyzing Legal Formality and Informality: Lessons from Land-Titling and Microfinance

Programs,” 113-114. 28

For the praise of contractual flexibility, see Haldar and Stiglitz, “Analyzing Legal Formality and Informality:

Lessons from Land-Titling and Microfinance Programs,” 116, 119. 29

Haldar and Stiglitz, “Analyzing Legal Formality and Informality: Lessons from Land-Titling and Microfinance

Programs,” 116-117, 120.

21

enterprise. Beget from a community’s own entrepreneurial desires, it symbolises a democratic

aspiration for self-representation that development expertise might claim as its own inspiration

and vision but not a product of its own interference. (After all, the group may well have formed

and decided lending terms before the microfinance institution has entered the picture, and in any

case, the group leads itself.) Moreover, the group will deeply know its borrowers in ways a

formal lender does not and maybe cannot because they will be the group’s own neighbours and

relatives. Where housing finance loans are given to individuals as opposed to groups, that one

must have previously qualified for or received a group loan, or that the lender still remains a

community member, keeps this feature intact. Intimate contact and the consequent knowledge

from it harness norms like admiration to transform it into a willingness to lend, guilt into

effective enforcement, or solidarity into flexible repayment. Put another way, shame works best

and perhaps only because we know each other intimately.30

Intimate knowledge is said to be responsible for more than just efficient and effective

enforcement. Serving as a type of security that discourages loan default, this knowledge is also a

gauge for credit-worthiness where and when one cannot require collateral of a slum borrower.

And when one cannot seize the asset if the lender does in fact default, then the lender has put his

social worth up for grabs, willing to be shamed if he cannot pay back the principal and/or

interest.31

Intimate knowledge apparently does more than just incentivise repayment and parse

out risky clients. It also is said to ensure that credit is in fact invested in a home rather than

something unproductive. It will even encourage, by making it easier for, safe clients to band

together to form the self-help group. Where housing microcredit does not work through a self-

help group to utilise the knowledge the group would bear, where instead it has employed a team

of staff to transact microcredit loans, the institution has sometimes nonetheless tried to adapt this

knowledge through proximity to the community, premised again on the idea that the closer one is

to the slum, the more authentic one is to their wishes and the more one can therefore claim one’s

support of rather than interference in the slum’s democratic self-representation. One such

strategy is for the institution to hire loan officers from the community itself.32

Where this is not

possible or desirable, the institution will then send its own loan officers directly to the homes and

businesses of the clients to engage in a sort of richly anthropological collection of what will be

termed ‘data.’33

The loan officer, whether local or foreign, participates in a circuitry between the

client community and the microcredit institution which operates on and through the knowledge

this circuitry fosters.

One such example of a Mumbai microfinance institution dedicated exclusively to housing

finance follows. Clients must want work in the informal sector and want to live in an urban home

to qualify for a loan. A loan officer would go to a prospective borrower, say a vada pav

salesman, and take pictures of his work, simultaneously uploading these pictures via smartphone

onto the database of the microfinance institution, asking him about his customer traffic, the latest

30

For the “informational advantages,” and “credibility of enforcement” that norms avail see Haldar and Stiglitz,

“Analyzing Legal Formality and Informality: Lessons from Land-Titling and Microfinance Programs,” 120. 31

See Rashmi Dyal-Chand, “Human Worth as Collateral,” Rutgers Law Journal 38, no. 3 (2007): 793-845. 32

For an example of local hiring, see Sohini Paul, “Creditworthiness of a Borrower and the Selection Process in

Micro-finance: A Case Study from the Urban Slums of India,” Margin: The Journal of Applied Economic Research

8, no.1 (2014): 59-75. 33

For an example of credit data in microfinance, see Mark Schreiner, “Benefits and Pitfalls of Statistical Credit

Scoring for Microfinance,” Savings and Development 28, no. 1 (2004): 63–86.

22

cost of potatoes, his salary, etc. Precision is not necessarily a consistent priority: for example, a

range in salary, as some sort of ratio between income and instalment, rather than a specific

number, knowing well that the salary is seasonal and/or volatile, will suffice. The officer will

then go to another vada pav salesman in the same area, asking the same questions to him to

corroborate the answers of the first. The same work would be done at the prospective client’s

home. The data would be parcelled off into separate categories: work, family, etc., with five

credit officers responsible for and only able to view the data (text and pictures) of their particular

category from anywhere in the world through a smart-device. The principle behind this approach

of credit approval is the desirability of tension between information. If two out of five credit

officers approve, the loan is approved. As the database grows, there is more historical

information to corroborate each new customer. To date, not a single one of the 5000 borrowers

has defaulted.

It is possible at this point to heed the lesson from titling and appreciate the difficulty it would

take to separate the role of the microfinance institution from what is said to be underway in the

community prior to the institution’s entry. Specifically, we could ask: does microfinance simply

insert itself onto a bed of existing norms and social relationships, extracting from them the

knowledge that is supposedly already there, without in fact transforming the social life and

inculcating norms and knowledge of its own in the slum? This is not necessarily the most

relevant question to gauge the dream of microfinance as a science. Though its conceived use of

group liability appears only to harness solidarity but, in leveraging the relationship between

shame and dignity, never tamper with it, microfinance unlike titling makes no pretence of

pursuing an intervention without interference. After all, installing what it sees as lacking in or

foreign to the community—financial discipline apparently only microfinance can adequately

herald—is one of the institution’s explicit goals. For some practitioners, cultivating the habits,

institutional and otherwise, to make the community receptive to financial discipline falls under a

self-avowed specialised banner of ‘capacity-building.’ But from the vantage point of its

practitioners, microcredit could be said to always have been about capacity building from the

start. The loan itself is only part of the goal. Along the way, performing the actions of qualifying

for it, meeting deadlines, presenting oneself properly to the lender, etc. are all part of the process

of learning how to behave and therefore realise oneself as an upstanding creditworthy client.

Is microcredit’s claim to operate as a sort of science of lending then just a harmless even if

incorrect assumption? In titling, close scrutiny of this pretension can destabilise not only the idea

that formalisation of entitlements is ever clear or neutral (rather, it involves political decision-

making regarding allocation and distribution) but also that it does not have one necessary

outcome which one could scientifically predict. Along these lines, what could be said for

microcredit if anything? Microcredit’s belief in its predictive power is a function of the two

institutional levers it claims to forego, contract and collateral, and the flexible, vague norms and

intimate knowledge it adopts in their place.

3. Flexibility and Intimate Knowledge

When it comes to the presumed role of contract, or its lack thereof, it seems that microcredit has

a dual and complementary notion regarding the formal and informal relationship: 1. that formal

contractual clarity is a rigidity which forecloses credit access in the case of exception while, 2.

self-help groups would be more accommodating to borrowers, thereby expanding credit access,

because of the less precise, and therefore flexible, norms of informality.

23

A flexible norm may, in a way, seem like an oxymoron. A norm from the moment it is

understood as such means a trend has cohered, it is consistent, it is recognisable as the same in

multiple places, it is reproduced and thereby must also be reproducible. How can something be

identical across space and time and still be said to be flexible? There must be some flexibility for

it to stretch but not so much that it loses its similarity to be called a norm across these iterations.

Some degree of flexibility, and some degree of rigidity, must be part of every norm to appear as

a norm.

What about an informal norm then makes it more flexible than a formal one in a contract while

still being a distinct norm and that too an informal one? Is the community more accommodating

of exception or the occasional mishap than the state enforcing a contract would be? Without its

lending terms elaborated in rich detail, a self-help group may very well have more room to

manoeuvre and course-correct when a loan goes awry. Perhaps then the clarity of the formal

contract is antagonistic towards the flexibility deemed necessary for providing access to credit to

slum borrowers. But it’s not necessarily true that clarity, if by that word we mean either a

lengthy or a pithy explication of terms, ever finally precludes multiple interpretations of a

contract – that a contract which is said to be clear is in fact correctly read only one way as

opposed to others. If this is the case, the state can also read into the ‘clear’ contract an exception,

an accommodation, or a course to be corrected. If clarity is not always so clear, one can always

read flexibly.

Clarity then is less an aspect of the contract itself than a function of the interaction between the

text and the acts and customs of its interpretation. As such, it is much more dynamic and

interactive than the image of a contract as a static and free-floating paper might suggest.34

Even

an apparent lack of specificity in an informal loan transaction can be both liberating, if it means

one party is free to act how they like with no recourse to an exact condition, or, as a custom of

reading the agreement, a strict even if unspoken norm operates by binding a party to a specific

course of action.

Clarity is therefore also a relative matter: for an informal community to adopt international legal

standards with non-discretionary rules of credit transactions might make its functioning

transparent to a foreign investor but incomprehensible to the lenders and borrowers currently in

it. These same lenders and borrowers might find technically imprecise, broadly discretionary and

vague standards much more illuminating and easily understood while those outside the

community may remain baffled.35

Neither is formalisation as a type of clarity necessarily in fact so clear nor is the relationship

between clarity and flexibility a deterministic one. Greater credit access and financial inclusion

writ large is not a logically guaranteed outcome of either a clear and rigid formal contract or a

vague and flexible informal agreement. Both are functions of norms which are themselves both

rigid and flexible at once. In other words, neither clarity nor flexibility is a necessary precursor to

increasing credit access for a slum borrower. It is undecidable as a general rule whether only an

exact target whets the willpower to land it or whether only a vague standard provides the easiest

space for landing. Replacing a formal contract with informal norms does not ensure, by virtue of

an accommodating flexibility of normative vagueness in informal life, that a greater number of

34

David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 43. 35

David Kennedy, “Some Caution about Property Rights as a Recipe for Economic Development,” 46.

24

slumdwellers receive access to credit because they are given a break when they do not or cannot

pay back the loan on time. Herein lies microcredit’s claim to science through foregoing contract:

that because of the way particular divisions between the formal and the informal appear certain

to the practitioner, aspects of either will necessarily produce a given distinct and coherent

outcome. Where microcredit’s other institutional lever is concerned, the lack of collateral and the

intimate knowledge that replaces its security, it is an outstanding issue that requires scrutiny to

further probe microcredit’s aspiration to the status of a science. After all, if its notions about

contract are misguided, collateral could still keep together microcredit’s capacity to yield

financial inclusion as a definitive result of foregoing it.

Offered to the lender as a deposit whose value to the borrower is meant to be a safeguard against

default, collateral as defined by a commercial bank is a requirement a slum borrower often

cannot meet without a title or a market-valued asset to pledge. That microfinance foregoes

collateral and has not met high default is only laudable if it has also meant greater financial

inclusion for those deemed most in need for credit for housing investment. In other words, low or

no default is not exactly the best indicator for the sort of financial inclusion most desired by the

microcredit practitioner. What sort of lending outcome most represents financial inclusion is

itself up for debate. Does it take on the form of a number? If so, is it the most number of loans

transacted? Or only those to the poorest of the poor? If our interest is in housing finance, do we

exclude loans transacted for the consumption desires of the borrower? Perhaps we can focus only

on housing finance loans transacted without default to borrowers of the lowest income-based

categories that are acknowledged as industry and government standards. Even if these loans

represented only a minimal share of transactions of any given microfinance institution, it might

be argued that the practice of extracting intimate knowledge to gauge creditworthiness in the

place of collateral remains untarnished in principle.

There are two practices we can separate. The first is represented by group lending, and, in its

absence, by the hiring of the loan officer from the community. The other is exemplified by the

data collection approach of the housing microfinance institution outlined in the previous section.

The local loan officer is a sort of mediation between these two practices – ostensibly

representing the best of both worlds. He is from the informal community itself, so he supposedly

has a privileged access to information, unmediated in its authenticity, requiring no translation,

that only a native could have, a whole history of it from even prior to his employment as a loan

officer that he can draw upon. At the same time, he also works like an anthropologist from the

outside coming to the field to collect data whose worth he will later test by inserting the data into

a process said to screen out his own and others’ subjectivities and produce as an end result a

creditworthiness objective enough to replace the security collateral would provide. Of course it

should be said that a given microfinance institution’s data screening process, for example the

aforementioned one, consciously and explicitly maintains the moment of human decision

through the role of the credit committee responsible for interpreting the data and then choosing

approval or rejection. Where a microfinance institution relies on a credit scoring process that

quantifies all the data and produces a number whose range alone will determine rejection, the

moment of human decision is still intact, though congealed in the institution’s choice of credit

scoring process, and the decisions of the expert which went into constructing this process to

begin with. As in the case of titling, questions about institutional design form an integral part of

the loan screening process even if it appears data screening is meant to shoulder the burden of

responsibility one inevitably confronts in design. The attempt to develop a science of lending

25

through data screening to once and for all resolve decision-making are never dissolved in the

automaticity or objectivity of the process; rather they are reproduced both in every use, which

implicitly reaffirms them, and in in the explicit act of approval.

Where intimate knowledge as a practice of screening is deployed through the group as opposed

through data, it might appear the microfinance institution is turning down scientism in favour of

an authentic and locally native type of knowledge to screen loan candidates. The native is

presumed to already know about features of a local applicant such as trustworthiness, credibility,

and character. Trusting a person is however something different than trusting his capacity to

repay a loan. The latter might require information gathering akin to the loan officer, placing the

native in the same position as anthropologist-scientist, having to decide what information is

worthwhile to collect, which should be weighted more than other, what to do in the instance of

exception, etc. Furthermore, where trust is the function of an interpersonal relationship, it does

not appear to have the features we typically attribute to authenticity’s objectivity. It ebbs and

flows, it varies in intensity, in quality, and it can be broken. It does not take on the form of

something fixed, lasting, and readily accessible as one and the same everywhere it is. Trust is

something one finds oneself already having cultivated for someone, but this does not mean it is

there, waiting and summonable, like an entry in a dictionary. Knowledge about the social web in

which finance is meshed is not something organic or natural either to the local native or to the

outside expert – one has to evaluate the possible consequences in this web of lending, or of not

lending, and of default. So where trust is a relevant criterion for loan approval, it is not retrieved

immediately but constructed in and through the process of its evaluation. All this is to say where

the native is seen as a site of trust-based knowledge waiting to be mined by microfinance, the

alleged local authenticity is underwritten by a process of shifting, time-sensitive, and mutually

constitutive interaction among subjectivities thought to oppose the timeless autonomy of

authenticity. Faith in native authenticity runs parallel and not counter to the faith in data’s

scientificity. Both outsource to a process that appears congealed and self-sufficient—data or

trust—when it is instead dynamically developed in thoughtful encounter and engagement.

These remarks about microcredit’s aspiration to science might only appear meaningful if they

ran against the proclaimed mission of financial inclusion. Yet, it is very difficult to separate out

to what extent the replacement of collateral with intimate knowledge and/or data screening

contributes to providing more people with housing finance, in which it could be said to produce

the sort of development we want, versus the extent to which it helps decrease the risk of default,

in which case it helps keep the microcredit institution running but may not in it of itself produce

a greater as opposed to lesser number of loans. Perhaps it could be said that whether or not either

knowledge-practice is responsible for increasing credit access among the poor, the mere presence

alone of microfinance facilitates credit access since prior to their arrival, commercial banks had

strict collateral requirements that excluded the poor. In India, where commercial banks have

been attracted by the growth of microfinance and seen it as an opportunity for profit-making,

experts argue that microcredit institutions of the non-profit variety will have to increase their

efficiency, minimise their costs, and control default risk if they are to be able to compete with

their for-profit counterparts. As financial sustainability becomes an increasing concern of even

not-for-profit microcredit institutions, it very well may be the case that market will orient them

toward organising their work around the mitigation of default risk as a first priority.

Perhaps if microcredit does not survive as a not-for-profit, its lasting commercial impact might at

26

least mean greater credit access for the poor even if from the private sector where the business

imperative will have to take first priority. In a sense, this is certainly true. More people now have

access to credit because of microfinance. Whether this outcome of financial inclusion is a type of

poverty alleviation is the relevant question for the development practitioner, especially when an

expert presents replacing collateral with intimate knowledge or data as a reproducible formula

for poverty alleviation. Studies that could yield the number of poor persons microfinance has

reached will always favour microfinance in the form of the argument that some is better than

none. Foregoing collateral would extend credit’s reach and in this reach, represent financial

inclusion. But where microfinance enables credit access by foregoing collateral, and where it

replaces collateral with screening to mitigate default risk, it skirts credit access by running

another risk: foregoing the financial inclusion at the heart of its proclaimed mission.

If we were to imagine some of the features that characterise the profile of the risky borrower,

they might include: a volatile income, no fixed or stable place of residence, a weak if any social

network, etc. Money comes to the borrower irregularly and unpredictably making it difficult to

meet even a flexible repayment schedule. Following prospects for quick cash if and when it

arises and/or unable or unwilling to meet the possibly small but inevitable costs associated with

squatting, the risky borrower has no real connection to a locale or to its community whose

members could serve as some sort of guarantors. The more this profile appears identical to the

profile of so-called the poorest of the poor, the more default risk appears associated with (if not a

proxy for) poverty, not trustworthiness or character. Screening out those most risky might mean

screening out those who would also inevitably be deemed, by the industry’s own standards, most

in need of credit.

At the same time, a given lender’s low rejection rate would not necessarily indicate greater

inclusivity. The most poor may not even approach the institution in the anticipation of

rejection—an anticipation either premature or, where screening in the place of collateral binds

risk with poverty, sensible—and would therefore not be included in this figure. Is this simply the

result of inadequate marketing on the part of the lender or a lack of awareness and prevalence of

misinformation on the part of the borrower? Or does it represent something structurally built into

the screening process that replaces collateral? If this is the case, microfinance reproduces in

different form the dilemma for which it chastised commercial lending to begin with. What this

suggests is that one cannot have holistic financial inclusion without a real confrontation with

default risk. Financial inclusion taken to its most inclusive limits could mean also the end of the

capacity to institutionalise microfinance. Scientificity in data screening or analogously in native

authenticity helps uncollateralised lending avoid the risk of default but runs the risk of financial

exclusion alongside it.

This sort of aspiration to science in microcredit is related to but also distinct from that in titling

or in efficiency/empowerment as property models for development. For all three, diving deep

into the premises that gird them, it becomes exceedingly difficult to have the assurance that the

respective institutional design will necessarily yield the desired result with only irrelevant side

effects if any. More specifically, in titling, this faith in formula imagines an intervention whose

formalisation only improved without ever interfering. In property rights analytics, the capacity

for formula grew weaker the more one grew attentive to the increasingly pressing details of

design that provoked crucial questions about allocation. In microcredit, firstly, both titling and

property analytics’ scientific assumptions are in a way combined. The fantasy of deriving a

27

decision from a baseline evidence that need not require interpretation reflects both the idea that

what is at work in the community is already legible rather than constructed as well as the idea

that design settles decision-making once and for all. What is distinct in microcredit is an explicit

evocation of knowledge, native, qualitative, and/or data-driven, that makes possible the

community as a construct and which itself is the scientific practice of that will mitigate default.

Furthermore, through this issue of screening substituting for collateral, microcredit presents an

example of the irresolvable knot at the heart of organisations for whom the absolute fulfilment of

their proclaimed social mission could undo the directive of financial sustainability that marks

and enables their institutionality.

*

Chapter Four: Conclusion

Not without its own history of scientific aspiration, architecture has been valorised or at least

deemed unique among the arts because of its capacity to serve a so-called ‘practical’ function

such as providing shelter and order.36

One theory, or family of theories, held that architecture’s

aesthetic form could be derived from its stated programmatic function.37

In this vein, geometry

would serve as the axiomatic foundation for architecture to perform this one-to-one shuttling

between form and function.38

Where the city is concerned, evoking a geometric foundation

helped architectural theory constitute what we often imagine today as the urban space: the notion

of the city as a unifying grid.39

The typology of the high-rise and of modern architecture was to

symbolize and herald in the future of society.40

Modern architecture held the fantasy of

revolution, of a sweeping social transformation. A science of design was to breach the frontier of

the possible.

The city as the site of production, and architecture as its loyal midwife, imagined space as the

terrain it will conquer.41

The modern city as a unifying grid in which all parts relate to one

another to produce a complex order and chaos also, but only to the extent that it is productive

and somehow vibrant, bears much resemblance to the notion of the modern economy into which

formalisation of property and microcredit would usher in the excluded poor.42

As a social

practice, architecture seems to be all the more so intimately linked to economic development

because of its proclaimed capacity to be subservient to programmatic needs. To that end,

architecture is something to be instrumentalised for development. Visually, the skyscraper, the

commercial complex, and the residential high-rise, among other architectural forms, all indeed

seem to be part of an iconography of successful urban development. The slum might also be

36

de Quincy as qtd. in Manfredo Tafuri, “Toward a Critique of Architectural Ideology,” in Architecture Theory

since 1968, ed. K. Michael Hays, (Cambridge: MIT Press, 1998), 9-10. 37

K. Michael Hays, Introduction to “‘La Dimension Amoureuse’ in Architecture,” by George Baird, 36 and Colin

Rowe, “Introduction to Five Architects” in Architecture Theory since 1968, ed. K. Michael Hays, (Cambridge: MIT

Press, 1998), 74. 38

Alberto Perez-Gomez, “Introduction to Architecture and the Crisis of Modern Science,” in Architecture Theory

since 1968, ed. K. Michael Hays, (Cambridge: MIT Press, 1998) and Hilberseimer as qtd. in Tafuri, “Toward a

Critique of Architectural Ideology,” 22. 39

Tafuri, “Toward a Critique of Architectural Ideology,” 13. 40

Rowe, “Introduction to Five Architects,” 74. 41

Tafuri, “Toward a Critique of Architectural Ideology,” 26. 42

Milizia as qtd. in Tafuri, “Toward a Critique of Architectural Ideology,” 11.

28

argued as related to the visual linguistics of the model city, as its counterpart, its outcome

(whether accidental, inevitable, necessary, or avoidable), or a first step towards it.

Indeed, there are a variety of ways to understand the slum as a visual icon in relation to the city

and therefore to (economic) development. Where such a typology is concerned, we are in the

domain of architectural expertise where it has been claimed that there has been a shift, in fact an

inversion, in the understanding of the slum as an icon, as a design type. At first, the slum is

drawn into direct comparison with the city, where everything that is right with the latter makes

for what is wrong with the former.43

The order and shelter of the city is the disarray and squalor

of the slum. The city’s productive energy is held back only by the slum’s deadweight. The

proclaimed inversion within architectural theory holds instead that everything that was bad about

the slum is actually what is right about it. The home is not ramshackle; it is the proof of human

resilience. The slum-dweller is not a victim whose choices narrowed him into the poverty; he is

an agent who makes strategic decisions regarding how to maximise his resources.

Among the rhetorical strategies of this inversion include constructing and deploying a wide

variety of terms besides ‘slum’ (‘spontaneous/vernacular/informal/squatter settlement,’

‘improvised dwelling,’ ‘folk architecture’) as if to indicate a posture against any connotation of

the slum as a negative space – both as a space marked by some lack, rather than having plenitude

or substance in itself, and as a space which is somehow subhuman. The vitality and the humanity

of the not-slum are affirmed. If anything, it is the conditions which have produced the not-slum

as a slum which are worthy of moral critique. That target could have taken on many forms, but it

is a function of history that it cohered around state-sponsored housing, and selective government

interventions, as the exacerbation, if not the source of, squatting. This inversion also marks also

the historical intersection between expertise in architecture and development. The trajectory of

architectural thought moving from the slum as problem to slum as solution tracks, and perhaps

co-constitutes, the evolution of development expertise in which the efficiency rubric emerged as

the technical consensus regarding the roles of government and private actors in market life of

developing countries. Tenure security also plays a role mediating architecture’s relationship to

development (15).44

In either typology, from what is already at work in the slum, it is apparently possible to discern a

typology that is an altogether new form of design. In the first instance, of the slum as a problem,

that design, conceived as primitive form, is tied to functionality. If the slum has any aesthetic

value, it is an aesthetics born out of intense constraints of poverty and social exclusion. To

believe so is to place the slum on a continuum where it is the lowest aesthetic denominator on the

way to up to more advanced, respectable, and higher-class dwellings, where form meets rich

complexity, subtlety, historicity, and metaphor. In the second instance, all care is taken to avoid

associating negative connotation as something inherent to the slum. There will be no solution

imposed. The solution awaits within. It will be constructed through collaborative, participatory,

and democratic work with the community in question. A typology of the slum could claim to

hold the slum equivalent in moral and aesthetic standing to other, pricier forms of buildings. It

very well might be possible to develop a catalogue of various slum forms and/or to account for

43

Peter Kellett and Mark Napier, “Squatter Architecture? A Critical Examination of Vernacular Theory and

Spontaneous Settlement with Reference to South America and South Africa,” TDSR 4, no. 2 (1995): 8 44

See remarks about John Turner in Kellett and Napier, “Squatter Architecture? A Critical Examination of

Vernacular Theory and Spontaneous Settlement with Reference to South America and South Africa,” 8-9.

29

their emergence as a type. Making categorical divisions between process and product

characteristics, describing models and variances, specificity to place, etc., one can develop a

repertoire of slum design with all the exhaustiveness of an encyclopedic and genealogical

database.45

Aesthetic complexity is re-introduced within the concept of the slum rather than

something aspirational above it.

What would this mean, however, for a theory of the slum’s development – architectural if not

explicitly economic? It could mean a variety of things. It could mean that, now ensconced in a

typology, the slum has an aesthetic value whose integrity would be compromised in demolition

or even dramatic upgrading.46

Or, by virtue of its entrepreneurial energy, the slum will

necessarily improve over due course. It is difficult to evoke self-improvement as an in-built form

of the slum without putting the slum on a progressive timeline on the other end of which is a

vision, even if hazy, of the higher-class modern urban form as the better, ‘proper’ home. Or, if

the typologist confers an element of dynamism to the slum, to housing as a process rather than a

static object, either demolition or upgrading would be part and parcel of the slum as a continually

transforming form of becoming with no hierarchy of aesthetic value.47

Demolition after which it

emerges again, there or elsewhere, would only a testament to the slum’s resilience. Where the

slum’s apparent disorder is in fact misunderstood order, or transition between modes of order, or

a resourceful display of flexibility, disorder is only present in the slum to the extent that it is not

actually disorder, that it instead does indeed have a use.48

To the extent that disorder is grasped,

it increasingly ceases to be disorder. Consequently, to the extent that the slum is marked by

disorder, it ceases to be a slum when ordered in the expertise of the architectural typologist.

Expertise which deems the slum as an architectural type worthy of equal respect with upper-class

dwellings, manages implicitly to maintain the centrality of, valorise, or even fetishise, the

poverty that makes possible the practices of slum architecture which this same expertise

cherishes, wishes to harness, adapt, and/or reproduce. It is possible to maintain respect for

complexity across all economic types of architecture while also looking regretfully upon the

poverty that has made the slum possible. But without a hierarchy, with only a continuum of

aesthetic transformation (not improvement) devoid of ethical judgment, what would then justify

an intervention in the slum? When one is compelled to intervene, a scale of judgment must enter

aesthetic typology. To intervene, especially in a manner in which the intervention is intended to

be sustainable, one takes a position on poverty, and aesthetic judgment—of the sort where

something is better and something is worse—would follow suit. Perhaps one has to improve the

slum because the poverty is despicable and the use of kaccha instead of pucca materials might

represent that. Perhaps one has to intervene to harness what does work in the slum because the

poverty has at least produced a good building practice: perhaps one argues that the flexible,

multi-use building should be reproduced as a design type because it will improve the

socioeconomic conditions over time. Or perhaps one intervenes by not intervening and lets the

slum evolve because the poverty is manageable: the expert might cite other cities where at first

45

Rapoport as summarised in Kellett and Napier, “Squatter Architecture? A Critical Examination of Vernacular

Theory and Spontaneous Settlement with Reference to South America and South Africa,” 12. 46

ibid 47

Turner as qtd. in Kellett and Napier, “Squatter Architecture? A Critical Examination of Vernacular Theory and

Spontaneous Settlement with Reference to South America and South Africa,” 9. 48

Stea and Turan as qtd. in Kellett and Napier, “Squatter Architecture? A Critical Examination of Vernacular

Theory and Spontaneous Settlement with Reference to South America and South Africa,” 12.

30

the slum was visually misunderstood because of its density or apparent lack of traditional

aesthetic order only then to transition to a robust economic powerhouse.

Even when the slum is conceived as a unique design with its own coherence and consistency that

is never inferior to the bourgeois ideal of dwelling, an intervention would always require a

judgment that implicitly links aesthetics to economic class. The intervention would be justified

on the expert’s conceptual construction through ‘identification’ of a problem. What the problem

is would depend on the eye of the observer. Is the problem poor infrastructure? That itself is a

catch-call category with plenty of room to maneuver within it: from crumbling buildings or open

sewage to inefficient layout and environmentally destructive density to familial and social

arrangements that are intimately interwoven in all of the above, ‘infrastructure’ could represent

the problem of the slum in its most holistic form. Perhaps the problem of the slum is somewhere

outside of the slum: if poor infrastructure, however defined, is the result of poverty which is the

result of economic and political arrangements elsewhere in the city, or the country, or the world,

the intervention could cut across time and space. Almost any intervention targeted in this vast

span could constitute an intervention in the slum through a chain of causal connections. Defining

the problem of the slum would require some sort of border-drawing even if tentative to figure out

exactly what the parameters slum are, or at least ought to be, to make a meaningful intervention.

There is no consensus when it comes to these borders. Defining a slum seems instead to offer a

way to position an intervention and the expert who is performing it. The slum, as something one

is able to talk about, in Mumbai, at the World Bank, at the Venice Biennial, is an opportunity to

project onto it one’s own ideas about how urban or social life ought to be. As a definition of

something distinct, the slum describes as much about the expert, if not more, as it does about

itself as an object of knowledge under the expert’s gaze. Are you a wide-eyed dreamer

enraptured with the entrepreneurial possibilities that you think the slum contains or are you a

neoliberal apologist ignoring the open defecation in front of your eyes and nose? Are you a

theorist of economic growth ready to fulfill the demand for luxury living that will make Mumbai

a world-class city or are you a bleeding-heart activist who wants to ensure the gains realized

from slum development are channeled back into raising the class status of the poor? Depending

on how you answer, you will have a different idea of what is wrong with the slum, with what a

slum is to begin with. And each time experts claim what is really happening in the slum, as a

foundation for a solution, this ‘baseline truth’ can be shown to be underwritten by decisions they

claim their expertise necessarily invokes but decisions that ultimately could be contested and

therefore decided another way.49

Baseline truths can be demonstrated with the standards of rigor

deemed appropriate within the particular expert intervention itself – ethnography for the

anthropologist, the randomized clinical trial for the social scientist, market failure analysis for

the economist, linear regression analysis for the statistician – but within each form of expertise,

and across them, both method and outcome will be varied, competing, contradictory, and up for

debate.

In a way, this might seem like old news. Those who claim to be outside of expertise, at least

outside of the international funding apparatus that links academics, policymakers, and project

implementers, lament that debate over so-called ‘theoretical’ problems stifles ‘practical’ action.

49

David Kennedy, “Challenging Expert Rule: The Politics of Global Governance,” Sydney Journal of International

Law 5 (2005): 23

31

These critics are not themselves without theory, acknowledged or not, because to have self-

confidence in what makes the slum a problem, and what makes a slum ‘a slum,’ is through and

through founded on some theory. There is no consensus on what exactly is wrong with the slum,

and there are enough competing claims to define the problem that appear logically valid, not

merely thought exercises with no implications, to make debate over the slum a worthwhile

practice, itself an intervention.

Perhaps the call for specificity in the debate could be reconciled with upholding the value of

debate. For example, it might be argued that once it is specified exactly what the end goal of

slum development is, the intervention might be more effective. In this light, perhaps the criticism

launched at experts is that they pursuing the wrong sorts of conversations or pursue the

conversations the wrong way. Much of the apparent generality and even vagueness of terms like

‘formalisation,’ ‘rule of law,’ ‘efficiency,’ ‘empowerment,’ ‘financial inclusion’—indeed even

‘development,’ and ‘the slum’—might appear critical to this problem. The expectation exists that

there is, or ought to be, a more accurate and precise word for an intervention, that its naming

could be grounded by a theory, evoke some etymology, situate itself in a history, and attribute a

political valence or opportunity for posture. Whether that is in fact the case, the wide scope of

each of these terms is also a rhetorical strength. It simultaneously creates a venue to argue but

draws borders around it to keep the debate enclosed. Who really would say that they are against

empowerment in the broadest sense? Or for inefficiency? Empowerment often does mean

disempowering someone, and efficient growth often does require introducing some sort of

inefficient resource distribution. But the point here is that at the level of debate, to persuade

people to your idea for an intervention, it can be useful to find a word that it appears we can all

agree on, only then to narrow what one should do with it. After all, it is rare to find development

practitioners’ calls for empowerment in the slum refer to empowering bulldozers or giving voice

to those poor, voiceless private developers.

That being said, these terms are also remarkably fungible. Empowerment-based development

practitioners might rail against those paradigms or programmes which did not take slum-dwellers

into account, but it is not as if other development expertise did not have an idea of what the

slum-dweller desired. It just had a different idea. Slum-dwellers have been everything from

savvy or ruthless encroachers vying for as much land as they can get, efficient entrepreneurs just

trying to make a life for themselves as any other urbanite would, aspirants for middle-class

lifestyle eager to leave the slum, aspirants for alternatives to middle-class lifestyle with

communitarian and anti-bourgeois commitments. Doing a robust qualitative survey would not

solve for us in any once-and-for-all manner the question of what it is the slum-dweller really

wants. The value of a survey to serve as the unquestionable foundation for empowerment-based

interventions is not limited by just its practical feasibility but also by the fact that it would shape

and shift the desire it would claim merely to reflect and that there are countless, competing valid

ways to perform the survey and interpret its results. We are back to contestation. Where

efficiency experts claim that government withdrawal from regulating selective aspects of market

activity is the real empowerment of slum-dwellers, who had managed to make affordable

housing by skirting law to begin with, one has to decide whether the line between empowerment

and efficiency now appears blurry or whether there are still meaningful ways to distinguish the

two and if so, what those ways ought to be. We must still debate this fungibility out.

It is difficult to know or to predict—though this too could be the subject of some theory—when

32

exactly new information to the contrary should shake to the ground longstanding common

wisdom, when it should be accommodated as an exception, and if it defies an existing principle

of expertise, when, even in its defiance, it offers an opportunity to revise and re-strengthen this

same principle. There is no correct way for a science of slum development to evolve – its history

will indeed be the result of the people performing it. And as history would have it, the emergence

of the proposal for state withdrawal in slum development in favor of market-led efficiency

involved evoking the very proximity to the authentic on-the-ground desires which we typically

associate with slum empowerment as an antagonistic paradigm to efficiency.50

It is as if the

experts involved in defining and utilising the terms of these rubrics and models are involved in a

dance where they can exchange partners at whim or without notice, strategically, by accident,

until it becomes difficult to stand outside and ascertain reliably who first belonged to whom.

The line between definition of the slum and the intervention in the slum seems to be a part of this

dance. Common sense might hold that one goes from definition to intervention, but thought does

not necessarily proceed this way. It might very well be the case that definition appears to us only

retroactively. Retroactively not that it is artificially or consciously fabricated to justify a plan.

Rather, retroactivity would imply that even the definition that emerges unconsciously with the

most intuitive clarity implies an intervention from the onset and requires after-the-fact

elaboration to be rendered meaningfully. It could be a reaction to what one perceives as a

threatening over-crowdedness in the slum, or the emotional difficulty in watching sectarian

violence unfold, in reading grim statistics on the literacy status of slum children, etc. One

witnesses something and then finds oneself already positioned to it. Statistics alone do not

exactly perform the expert’s conversion from ignorance to righteous contempt over injustice.

One must already have an idea, even if hazy, of how much literacy there ought to be, that literacy

is a good thing, and why, or what the proper crowdedness in urban life should be, when it is too

sparse and when it is too much, and how to tell. All of these background conditions are functions

of some expertise which itself could be structured by other background conditions that are the

result of yet another expertise, until it is impossible to decide from a blank slate how one should

position towards the slum without already having some feeling and conviction shaping your

attitude towards it.

The work of expertise strikes through each notion that shapes our vision and therefore cannot be

underestimated in constructing for us many of the ideas that appear commonplace about the

slum—after all, the very division between the informal and formal, the framework of the modern

economy, of property, of contract, of collateral: these are all expert demarcations. That being

said, if expertise always and already shapes our position to be able to witness the slum, as a

distinct entity, as a problem, as a solution, what is it in us that compels us to intervene? The

spark of righteous anger at injustice that motivates us to join or lead a protest might be produced

by expertise, but the responsibility we feel to protest, and the responsibility we face from our

consequences after protest, is our own. Otherwise it would not be experienced as responsibility.

Knowing the correct intervention in the slum tells us nothing about what in us urges us to

perform it, to want to aspire to a science, to think only the certitude of a science could justify an

intervention, to want to justify an intervention before performing it. Behind each reason might be

yet another scientific reason—ideology, biology, history, desire, power—as there is a theory for

50

For the explication of this point and a lengthy elaboration about the relationship between the role of architecture

and in third-world development, see M. Ijlal Muzaffar, “Modern Architecture and the Making of the Third World,”

(PhD diss., Massachusetts Institute of Technology, 2007).

33

each as the basis for human action, for human expertise, for the aspiration for science. Whatever

the reasons for the aspiration, the experience of responsibility can indeed be blunted or evaded

when the development expert or practitioner describes to himself the justification for his

intervention as the only correct outcome he could have derived from a merely technical model.51

Exactly what confrontation is it that is being evaded? A decision which is presented as fixed can

in fact be decided many ways. The expert presents the solution to himself as a solution, not just

when trying to convince us. What exactly is it that is worrisome about the confrontation with the

failure of the solution? Solutions are always failing, and the work of slum development remains

challenging even with all self-assured confidence in modeling. Will it be more difficult or less

difficult once this confidence ebbs? More creative and experimental in producing multiple forms

of intervention or too erratic and ambiguous to ensure consistent financial support? Or something

else altogether?

Even when the economic interdependence between it and the city is affirmed, by what process

does the slum come to be seen as a distinct entity, as something separate from the expert who can

subsequently imagine it as something as a terrain for his intervention? Why the slum as the site

of intervention for the slum? Why not somewhere else in Mumbai as the site of intervention for

the slum? Colaba? Or Malabar Hill? What makes cross-subsidy rehabilitation in Dharavi appear

as something feasible as opposed to increasing property tax in Bandra, or consumption tax in

Maharashtra? Why not American manufacturing or Chinese textiles as the site of intervention for

the Mumbai slum? Is a slum-free India the guarantor or outcome of development or is it a

symbol after which follows a different catalyst?

If there is a tension between the self-proclaimed need for financial sustainability and the

fulfillment of a social mission, how extensive is this knot? If the slum is part of what nourishes

economic output, how do we distinguish the funding apparatus dedicated to its’ poverty

alleviation and the economy whose growth it might sustain? Does slum development appear

possible only where plans for growth and for poverty alleviation converge? Are growth and

poverty alleviation like financial sustainability and social mission? What risks do institutions

face in the divergence of these goals? In their utter divorce?

These are questions of an expertise yet to be cultivated. Whether confronting them gives birth to

something entirely different or something all too familiar is a history yet to be realised. What are

we willing to forsake to ask these questions? Are they worth resolving? Do we prefer their

occasional provocation to our studied avoidance of them? Whatever the case may be, so far the

dream of a science lulls us to peaceful sleep with the assurance that the slum remains palpable,

elusive only to the point of being charming and understood only insofar as it can be transformed.

And the aspiration of development to become a science remains worthwhile, even if never

realised, if it means we can remain dreamers. Engaged in self-definition as humanitarian

practitioners, motivated by the hope of a world without slums, without poverty, without

difference, we remain in debt. In debt to whatever keeps the actualisation of this utopia at bay

and from whatever keeps the interruption of this dream from becoming a rude awakening.

51

David Kennedy, “Challenging Expert Rule: The Politics of Global Governance,” Sydney Journal of International

Law 5 (2005): 23-24.

34

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