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J Urban Econ. 2011 May 1;69(3):253-272. Epub 2010 Oct 22.

Exclusionary policies in urban development: Under-servicing migrant households in Brazilian cities.

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1
Johns Hopkins University, School of Advanced International Studies, Department of International Economics, 1717 Massachusetts Avenue NW, 7th Floor, Washington, DC 20036, United States.

Abstract

Localities in developed countries often enact regulations to deter low-income households from moving in. In developing countries, such restrictions lead to the emergence of informal housing sectors. To deter low-income migrants, localities in developing countries withhold public services to the informal housing sector. Using a large sample of Brazilian localities, we examine migration and exclusion, focusing on the public provision of water to small houses where low-income migrants are likely to live. Withholding water connections reduces the locality growth rate, particularly of low-education households. In terms of service provision, during dictatorship in Brazil, we find evidence of strategic exclusion, where localities appear to withhold services to deter in-migration. We also find evidence of strategic interactions among localities within metro areas in their setting of service levels: if one locality provides more services to migrant households, other localities respond by withholding service.

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