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The World Bank is launching its new Urban and Local Government Strategy. The new strategy reflects on key developments over the past decade, assesses the impact of interventions and policies that worked or that faltered during this period and provides insight about new directions and adjustments that may be needed over the coming decade. The most fundamental rationale for the new strategy at this time is what can be considered no less than a paradigm shift in the way the developing world, the World Bank, and its donor partners must begin to think and act in addressing the opportunities and challenges of rapid urbanization.

The world’s urban population is expected to swell to over 60% in the next two decades, and continue to rise. More significantly, 90 percent of that growth will happen in the developing world: an expansion of almost two billion people. Africa and South Asia, the only regions still mostly rural, will see their urban populations double in that time. Much of the growth will take place in small and intermediate-size cities often lacking the skills, facilities, and services necessary to cope with the human tide.

The World Bank recognizes that such growth and its attendant challenges are inevitable.  It is estimated today that one billion people worldwide live in urban slums characterized by lack of access to water, sanitation, overcrowded living space, and insecurity of tenure. 

But urban growth also represents key opportunities.  As economists describe it, urbanization brings about a convergence of production and consumption markets, thus enabling the benefits of agglomeration economies to take root. This view has overtaken the now-discredited thinking of urbanization as a phenomenon to be avoided. The new approach amounts to a "paradigm shift", due largely to the contributions of the multilateral Commission on Growth and Development and the World Bank’s World Development Report 2009 on economic geography.

The key ingredient for successful urban development is the realization by governments that cities are not avoidable burdens. If well managed, they are desirable assets to economic growth, and government must plan and act in the interests of those communities.

Resistance to urbanization remains a serious obstacle to the sustainable development of many cities around the world. Many national governments, and even development agencies, focused on the negative aspects of cities – overcrowding and slums – instead of trying to unlock the efficiencies of urban agglomerations that would enable them to capture and pass on the economic advantages to the countries at large. But this requires, in turn, an increased and proactive focus on managing this urban transformation to minimize the downside risks of congestion, informality, and slums. 

The new Urban Strategy realigns the Bank’s urban business with five business lines considered critical for cities and local governments in the decade ahead:

We urge you to review the material on this website, which serves as our portal to exchange ideas, information and experience about urban development policies and practices around the world. We hope that the discussion generated on this website will help shape the implementation of the World Bank Urban Strategy and help pave the way for how we work and partner with developing cities and development partners in the years ahead.