World Bank

The World Bank began its housing finance operations to the governments of developing countries in the early 1970s. By 2006, it had lent over US$16 billion in shelter assistance across 90 countries and had become one of the most influential players in housing policy formulation, although this influence varies considerably from one country to another. From initial project-based loans for sites and services and informal settlement upgrading, the bank came to recognize and promote linkages between the housing sector, the urban economy, economic growth, and poverty reduction.

The World Bank has periodically reviewed its policy on housing, starting with a report titled Shelter in 1980, followed in 1993 with Housing: Enabling Markets to Work and in 2006 with Thirty Years of World Bank Shelter Lending: What Have We Learned? The focus of these reviews represented shifts from basic infrastructure finance to local community involvement, the redefinition of the state's role in low income housing to one of facilitating market provision, and more recently a concern for factors that constrain development, including those related to the urban land market.

This entry explains the shifts in the World Bank's shelter and urban policy, beginning with a brief review of the World Bank's origin, mandate, and overall development policy then turning to a look at the bank's most important positions in relation to housing in the developing world. The entry also examines shifts in the bank's relationship with the United Nations Centre and, more recently, the United Nations Human Settlements Programme and touches on the bank's role over the past decade in relation to the Millennium Development Goals, in particular Goal 7, Target 11, which focuses on slum dwellers.

The term slum, traditionally with different meanings in different regions, came to be adopted by all major global agencies including the World Bank, and most Anglophone country governments, at the beginning of the new millennium due to its incorporation into Millennium Development Goal 7, Target 11. The World Bank uses the term slum throughout its subsequent publications, not to refer to blighted inner-city tenement accommodation, as in the Western usage, but to the unplanned, unauthorized, and often unserviced informal settlements of the urban poor. It is believed that such slums are home to more than one billion people globally. The scale of the “slum” challenge, and in particular its link to city preparedness for high rates of urbanization, features in the World Bank's current urban strategy, which also has a bearing on the bank's approach to shelter lending.