Urban Development and Social Capital: Lessons from Kathmandu

During much of the twentieth century, the growth of slums and squatters has been a pervasive reality in the developing world. With formal state policies largely unresponsive as the result of a kind of collective social, political, and economic “amnesia” vis-à-vis slums and squatting practices, squatters have by and large been left to themselves. To a certain degree, the need to examine the potential of social capital in such contexts stems from the failure of policy-makers to upgrade squatter settlements, provide alternative resettlement solutions or implement policies that would end the widespread proliferation of squatter settlements altogether. Additionally, the need to consider social capital formation and potentiality among squatters is triggered by market shortcomings, such as asymmetric information sharing, lack of credit, and diminished influence among the poor as they compete in an increasingly liberalized land and housing market. In this regard, especially, the benefits of globalization and consequent social and economic reforms have simultaneously generated paradoxical trends in marginalization and empowerment. On one hand, with regard to land and housing, such social and economic reforms have increased income polarity and social inequality at the level of access by marginalizing poor members of a community. On the other hand, such reforms have created the space needed for grassroots action, self-provision and, at times, the development of unorthodox alliances and relationships among various marginalized groups. In this way, social capital emerges to enable what is referred to as “self-help housing.”