< / > Click here to embed this graphic on your website
Is it cheaper to prevent a slum than to fix one? Latin America and the Caribbean have a high prevalence of slums when compared with countries with similar income. To improve living conditions, governments have embarked on comprehensive slum upgrading programs that have improved the lives of hundreds of thousands of poor people.
However, that approach is not an efficient way of providing basic infrastructure in the long-run, according to "Room for Development: Housing Markets in Latin America and the Caribbean", the latest edition of the IDB's flagship publication Development in the Americas.
As shown in the figure, providing basic infrastructure in a slum can cost eight times more than providing it in a land that has not yet been developed. In order to be cost-effective, governments should also develop strategies and offer subsidies to increase the supply of affordable urban land and prevent the formation of slums.