International experience indicates that cities’ productivity and livability is enhanced by infrastructure investments that can accommodate population growth. Bertaud’s (2010) review of Korean urban development policy describes the massive government investment in infrastructure and intervention in urban land development. The initial objective was to ensure an adequate supply of serviced land to support industrial productivity, not to deal with the shantytowns that made up more than a third of Seoul’s housing stock in the 1960s. The Republic of Korea’s interventions to provide high-quality servicing of large quantities of land early in its urban transition allowed it to rapidly absorb a large influx of households with increasingly better living conditions.

In their study of Indian housing markets, Annez and others (2010) point to the experiences of Bangkok, Seoul, and Hong Kong SAR, China, noting that they significantly improved housing conditions and reduced the percentage of slum households by focusing on developing infrastructure to increase effective land supply and allow more intensive use of urban land. Tunisia is another interesting example in this regard. Its national upgrading program has been justifiably praised for its contribution to the dramatic decline in slum housing from 23 percent in 1975 to 2 percent in 1995. The program’s success, however, would not have been possible without the simultaneous massive investment in water and sewer trunk infrastructure by the national utilities. As a result, coverage of existing informal settlements through upgrading was made possible, and additional land was opened up for further development. This contrasts with the situation in most Indian cities, where the inadequacy of existing infrastructure systems limits reform of land use regulations to allow more appropriate and less costly development and reduces their capacity to scale up service delivery in slum areas.

Government intervention to increase the supply of serviced land has varied, and there does not appear to be a single model for success. Bertaud’s (2010) case studies of Asian cities provide examples of contrasting strategies, none of which is perfect but all of which contributed to ensuring an adequate supply of serviced land for housing development for a range of income groups. The Republic of Korea exemplifies strong state intervention, carrying out land readjustment schemes that initially allowed it to service land on a self-financing basis and that affected about 35 percent of the land in Seoul. Bangkok’s more laissez-faire approach of extremely flexible development standards attracted private investment in affordable housing in centrally located areas.

Among the many reasons for the inadequacy of serviced land supply are weak fiscal and financial performance, inappropriate regulatory norms, and poor planning practices that distort requirements for the planning and provision of infrastructure. Compounding the problem are the weak incentives and diffuse accountabilities for service provision and financing across levels of government, land, and infrastructure institutions. In many instances, city governments bear the costs of development without the capacity to capture the benefits or much authority to guide development or service provision. While these constraints require longer term institutional 20