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Mar 23, 2011

Improving living conditions in low-income neighborhoods in Rio de Janeiro

IDB details impact of second phase of Favela-Bairro program

The Favela-Bairro program of the the Inter-American Development Bank (IDB) has helped improve living conditions for many poor inhabitants of urban slums in areas like income and availability of social services, a review of the program shows.

The IDB has been working with the municipality of Rio de Janeiro in Brazil to improve the living conditions of families living in the poor informal neighborhoods of the city, known as favelas, since 1996. Two additional loans have been approved since then: Favela Bairro II, which completed its execution in 2007, and Favela Bairro III, approved in December of 2010.

The city of Rio de Janeiro asked the IDB to undertake an impact evaluation of the Favela Bairro II program, which sought to improve the living conditions of families living in favelas with the provision of basic infrastructure (water, sewerage, drainage, street lighting, street paving, parks and sport areas, reforestation); social services (child-care centers; social-service centers with an emphasis on families, children and adolescents; income and work-generating activities); community organization and development; and land titling.

To evaluate the results of this program, favelas that participated in program were compared with ones that had not participated. Given that no baseline data existed for either set of favelas, the strategy was to compare the two groups ex post under the assumption that their values prior to the intervention were comparable.

The program implemented water and sewerage works, as well as public works on streets, public lighting and other urban improvements. Favelas under the program experienced a significant increase in the availability of all services. The only exception was garbage collection, which was relatively high in both groups. Water connections to the city system reached 81 percent in favelas that participated in the program compared with 55 percent in others outside the program.

Favela-Bairro II increased the incidence of formal property ownership by 3 percentage points compared with communities outside the program. Even through the program did not increase formal ownership, it did increase the numbers of informal means of documenting ownership, such as bills of sale.

The program had a large impact on household perception on how much their homes are worth. The estimated increase in the perceived value of homes was of 8,000 reais, which is 44 percent higher than the perceived dwelling worth of households in favelas that did not participated in the program.

With respect to access to education, employment, and income, the results showed that the program had a small but statistically significant impact on school attendance among those aged 5-20 years old. There was also a substantial increase in daycare attendance, which reflects the program’s emphasis on construction of these facilities. Impact was also seen on household incomes, which increased by around 15 percent, both statistically and economically significant. This may have been driven by the increase in the value of the beneficiaries’ dwellings.

Finally, there was no evidence of any impact on the time spent reaching public transportation, and on employment or type of work.

The findings are in the IDB’s 2010 Development Effectiveness Overview, which discusses the development impact of several ongoing IDB projects in Latin America and the Caribbean and reports on the progress the Bank is making to boost transparency and accountability.

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