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 provide causal long-term impacts of the 1969-1984 KIP program, which provided basic upgrades to 5 million residents covering 25% of land in Jakarta, Indonesia. We assemble high-resolution data on program boundaries and 2015 outcomes to address program selection bias. On average, KIP areas today have lower land values, shorter buildings, and are more informal, per a novel photographs-based slum index. The negative effects are concentrated within 5km of the CBD. We develop a spatial equilibrium model to characterize where the welfare implications of KIP are the largest. Counterfactuals suggest 77% of the welfare effects from removing KIP stem from land in the center and highlight how to mitigate losses to displaced residents.

We study the role of Dutch colonial institutions on urban development for the megacity of Jakarta, Indonesia. Using historical maps of Dutch settlements and a rich granular database, we implement a boundary discontinuity design comparing locations within 200 meters of Dutch boundaries. We find that historical Dutch areas today have significantly lower parcel density, are more likely to have formally registered parcels, and have more regular parcel layout, pointing to the importance of planning and mapping. Dutch settlements are also more likely to appear formal, as per a photographic index that ranks the appearance of neighborhoods. More broadly, Dutch areas are 11 percentage points more likely to have tall buildings (with more than 3 floors) and have 17 log points higher assessed land values. We consider channels such as natural advantage, direct Dutch investments, and land market institutions.

Millions of migrants in developing countries move to urban areas in search of better prospects, but access to economic opportunities varies widely within cities. Yet, we know little about spatial inequalities within developing country cities. This paper studies patterns of residence and local public goods access by socio-economic status within Brazilian cities, making two contributions. First, I innovate on the measurement of residential segregation by computing spatial metrics of “distance segregation,” capturing the physical proximity between low- and high-socio-economic status neighborhoods. I document descriptive patterns by income, race, and informality. Within cities, distance-segregated neighborhoods have lower access to local public goods. Second, I explore the causal link between residential patterns and access to public goods. Using an instrumental variables strategy based on within-city geography, I investigate how the levels and spatial allocation of public goods are affected by segregation. Cities where the poor and the rich live further apart have a lower share of households connected to sewerage and water, worse neighborhood quality, and lower access to public amenities. I consider mechanisms such as redistributive preferences, externalities across neighborhoods, and strategic underprovision of public services to deter the poor. Additionally, I provide suggestive evidence on some of the historical determinants of distance segregation, such as infectious diseases. These findings help inform the debate on policies such as slum clearance and relocations, social housing, and the spatial targeting of public goods.