To date Favela Bairro is the largest-scale squatter settlement upgrading pr
ogramme implemented in Latin America. It aims to comprehensively upgrade al
l the medium-sized squatter settlements in the municipality of Rio de Janei
ro by 2004, and the programme is currently being promoted by the city's mun
icipal government as an example of a new approach to tackling poverty and s
ocial exclusion in the city. Based on research carried out by the authors,
the article examines the central characteristics of Favela Bairro. (During
the field research, undertaken in 2000, a total of 39 people were interview
ed in Rio, including staff of a range of municipal departments and agencies
, community groups and residents, architects, academics, construction compa
ny workers, and NGO workers). The examination is conducted in the light of
seven policy characteristics which the authors have identified, using polic
y/project documents and agency agendas, as typifying an emerging new genera
tion of housing policies whose objective is to reduce urban poverty. Throug
h this examination the article aims to add to the growing literature on Fav
ela Bairro, which to date, has been largely descriptive. It also aims to te
st the proposed framework of analysis, using it as a means to reflect upon
the latest generation of housing-poverty policies. The article concludes by
arguing that processes of participation and democratisation are central if
the latest generation of poverty reduction initiatives is to have an impac
t which is both substantive in scale and lasting in impact. Yet, as demonst
rated in the case of Favela Bairro, it remains extremely problematic for go
vernments to implement projects which devolve significant decision-making p
owers to poor urban communities,. and even more difficult still for governm
ents to institutionalise mechanisms for civil society participation, thereb
y embracing processes of state reform and democratisation. (C) 2001 Elsevie
r Science Ltd. All rights reserved.