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Slum Upgrading and Long-Run Urban Development: Evidence from Indonesia

Mariaflavia Harari & Maisy Wong

The Review of Economic Studies2025https://doi.org/10.1093/restud/rdaf090article
FT50AJG 4*ABDC A*
Weight
0.66

Abstract

Developing countries face massive urbanization and slum upgrading is a popular policy to improve shelter for many. Yet, preserving slums at the expense of formal developments can raise concerns of misallocation of land. We estimate causal, long-term impacts of the 1969–84 KIP programme, which provided basic upgrades to 5 million residents covering 25% of land in Jakarta, Indonesia. We assemble high-resolution data on programme boundaries and 2015 outcomes and address programme selection bias through localized comparisons. On average, KIP areas today have lower land values, shorter buildings, and are more informal, per a photographs-based slum index. The negative effects are concentrated within 5 km of the CBD. We develop a spatial equilibrium model to characterize the welfare implications of KIP. Counterfactuals suggest that 79% of the welfare effects stem from removing KIP in the centre and highlight how to mitigate losses to displaced residents.

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https://doi.org/https://doi.org/10.1093/restud/rdaf090

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@article{mariaflavia2025,
  title        = {{Slum Upgrading and Long-Run Urban Development: Evidence from Indonesia}},
  author       = {Mariaflavia Harari & Maisy Wong},
  journal      = {The Review of Economic Studies},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1093/restud/rdaf090},
}

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Evidence weight

0.66

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.80 × 0.4 = 0.32
M · momentum0.75 × 0.15 = 0.11
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.