This paper suggests that an understanding of poverty in cities such as Bangalore (often referred to as India’s Silicon Valley) requires more attention to the governance processes in which different groups compete for public investments and support. It describes the differences between the "local" and the "corporate" economies within Bangalore and their links with government. The local economies provide most of the population (including virtually all poor groups) with their livelihoods. They mostly develop outside the "master plan" areas, with diverse and complex economies and land tenure forms within which poor groups find accommodation and work. Their links with government are through local government - the City Corporation and its councillors and lower level bureaucracy. The corporate economies include the information technology industries for which Bangalore is well-known. Most of their links with government are with state and national parastatal agencies that control most of Bangalore’s development functions and have access to most government funding. But there is little local representation in these agencies. This profoundly disadvantages poor groups and the local economies in the competition for land, infrastructure and services. Rigid land use controls in the expanding corporate enclave areas exclude most pro-poor economic activity and threaten poorer groups’ fragile claims to land. Poor groups suffer demolition, resettlement, increased land prices and a governance system in which their local representative structure has little power. Meanwhile, the publicly sponsored "mega-projects" in Bangalore do little to support the local economies that are so important for the city’s prosperity ; indeed, as this paper describes, many serve to disrupt them.
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