Key messages

  • Approximately 54% of the world’s population live in urban areas; this is expected to increase to 66% by 2050. The highest rates of urban growth are expected in low- and middle-income countries. Managing urban growth is one of the defining challenges of the twenty-first century, particularly in the poorest and most fragile countries where municipal capacity is weakest.
  • Urban governance refers to how government (local, regional and national) and stakeholders decide how to plan, finance and manage urban areas. It is profoundly political, involving contestation and negotiation. Large gaps often exist between poor and better-off urban residents in their access to social, economic and political opportunities and ability to participate in, and leverage, the benefits of urban living.
  • Unlocking the potential of cities requires investment in residential, commercial and industrial structures supported by effective land markets, appropriate regulation, good public services, adequate public finance and transparent and accountable city level political systems.

The twenty-first century has been referred to as the first ‘urban’ or ‘metropolitan’ century (Clarke Alvarez et al., 2008; UN-Habitat, 2009; UNDESA, 2014; OECD, 2015). It is broadly accepted that for the first time, the majority of the world’s population lives in what can be loosely classified as ‘urban areas’. National differences mean the distinction between urban and rural populations is not amenable to a single definition for all countries or even to the countries within a particular region: 6% of countries have no official urban definition and 11% report that their population is either entirely urban or entirely rural (Buettner, 2014). In 2014, an estimated 54% (around 3.8 billion people) lived in towns or cities (UNDESA, 2014: 1). Cities occupy 0.5% of the world’s land, but they account for an estimated 70% of economic activity, 60% of energy consumption, 70% of global waste and 70% of greenhouse gas emissions.

By 2050, 66% of people are projected to be living in urban areas, with the highest rates of urban growth expected in low- and middle-income countries (LICs and MICs). India, followed by China and Nigeria, will account for 37% of projected growth in urban populations (ibid.).

Attention has focused on the rise of megacities (those with a population of 10 million or more). Yet most urban growth and development is expected to occur in the secondary cities of Africa and Asia (those with populations of 500,000–3 million) (UNDESA, 2008; 2011). More specifically, it is in poor informal settlements on the peri-urban periphery that growth is expected to be greatest.

Poverty in LICs and MICs is becoming increasingly urban. An estimated third of the global urban population (over 1 billion people) live in informal settlements, and this figure is expected to double by 2030 (UN-Habitat, 2008). In the Central African Republic (CAR) and Sudan, over 90% of the total urban population resides in informal settlements (ibid.).

Rapid expansion alongside large informal settlements pose significant challenges for the governance of urban areas in the global south. With urban pressures increasing, conflict potential is high. Urban areas where the poor are concentrated are vulnerable to climatic catastrophes and are becoming the locus of violence and criminality (Beall, 2007). Rapid urbanisation has been identified as both an opportunity and a major global risk (UNDESA, 2014; WEF, 2014), with many types of risk converging in cities (WEF, 2014).