In developing countries, neither households nor firms can count on having access to basic public services. Households lacking adequate water supply and sanitation face elevated health risks; firms and micro-enterprises lacking electricity and water face higher costs of production. For reasons such as these, the inadequate provision of public services can compromise health, hinder economic growth, and stymie efforts to reduce poverty. This paper examines the availability of services in the cities and towns of developing countries, using data drawn from the Demographic and Health Surveys. Particular attention is given to the urban poor, who will form a group of increasing numerical and policy significance as levels of urbanization rise. We find that wide rural-urban gaps remain in service delivery, and that smaller cities—where about half of urban residents live—are notably under-served by comparison with larger cities. Poor urban households are much less likely than other urban households to enjoy access to public services. Inequities such as these underscore the need for continued public sector investments in service delivery. But the political economy of urban governance is changing in a way that may well frustrate efforts to improve services. Across the developing world, national governments are increasingly decentralizing their service delivery functions to lower tiers of government, often without making commensurate transfers of funds or revenue-raising authority. As nation-states recede from the local scene, local governments may be left without the means to fill the gaps in service delivery.

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This page updated 20 April 2005

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