Knowledge @ Wharton published an interesting article on the living conditions of India’s rural poor, and on the shortcomings of central and state-funded government housing programs. The author of this article is Abraham George, founder of The George Foundation, an organization that works on poverty alleviation issues in South India.

(To read the full article, click here)

George describes a number of reasons why government housing programs have failed to significantly and sustainably improve quality of life in rural India, but he identifies the chief problem as an exclusive focus on providing low-cost shelter, without consideration for interrelated issues that ultimately determine actual effectiveness (ventilation, number of inhabitants, sanitation facilities, etc.). In his opinion, "the issue of adequate housing is integral to poverty reduction and social justice," and existing programs of housing construction and resettlement carried out by the government are inefficient, substandard, and serve to perpetuate caste divisions, rather than to ease them.

Some of the issues George discusses are specific to India, but the problem of government housing programs that fail to truly identify and effectively address the needs of the poor is in no way unique. I agree with George that this is very often due to band-aid approaches that provide temporary or simplistic solutions but fail to transform lives.

However, it’s also important to realize that even a strategy that convinces a government to build more “complete” housing might also fail. Ownership and active involvement in the building of a new community are some of the strongest mechanisms that exist to ensure that the end-result will have the highest positive impact on quality of life. Without the direct participation and ownership of this process by the poor, it is less likely that their needs and preferences will be fully understood or completely addressed. In the end, the disconnection between slow-moving, large-scale government programs and complex, dynamic needs and desires on the ground very often reduces their efficacy.

George criticizes the Indian government for taking the wrong approach and pursuing an ineffective program, but still suggests that the Indian government continue to be the force guiding the process. I would advocate that, although ultimately it may still be the government helping to subsidize housing development for its poorest citizens, better results could be produced through more organically-formed, private-based initiatives.

The author mentions that some ownership of the process should be encouraged through innovative financing solutions for beneficiaries, but I would take this a step further and propose that market forces of local demand play a greater role. New inhabitants must be able to determine what their new communities will look like and how they operate – when the process is organic and directly guided by the demands of future beneficiaries, it will have the strongest chance of producing a result that is desirable, sustainable, and replicable.

(For a fascinating example of this type of approach to housing development, financing and community-building action, see Jamii Bora, an Acumen Fund investee and Unitus partner located in Kenya. Scroll down to "Jamii Bora Housing – Kaputiei Town.")

Essentially, I agree with George – the issue of housing must not be viewed in isolation, or simply as a task of constructing more shelters. But, in order to attain what he describes as the "real solution" which "lies in good public governance, building strong human foundations through education and health care, creating economic opportunity, and ensuring social justice for all," government programs may be inherently inefficient when compared with the dynamism of initiatives designed and owned, both for and by, the poor.

It will likely be a combination of government subsidies, charity, and private-based initiatives that will eventually come together to tackle this problem across many levels of income, many cultures, and many geographies. By taking steps to spark and to fuel local initiatives, and by bringing more elements of demand-driven, market-based thinking into the conversation, we can work toward better solutions that address the inadequate living conditions that currently perpetuate the poverty trap for millions of people.