The transformation of land into a setting for clustering local economies can become an important cornerstone of poverty policy. This transformation has several functional aspects, which in turn have important institutional and political aspects. Underlying both the functional and institutional factors is the role of local government and local democracy. Such a conceptualization puts to center stage several paradoxes: A terrain that seems “slum-like” turns out to be highly productive and employment generating. Complex tenure forms and mixed land use seen as “unplanned” turn out to be pre-requisites for economic development. There are institutional paradoxes that contrast efforts at “transparency” and managerial “best practices”. Here, the messiness of local bureaucracies in municipal government turns out to be critical for poor groups to influence interventions in their favor. Influencing the public process may be more effective in stealth-like ways rather taking a more visible approach. Most fundamentally these issues remind us that the potential of cities to reinforce or reduce poverty moved far beyond projects and programs and the normative frameworks used by planners and administrators. Instead, it is the transformative process of turning land into economic settings that might be at the center stage. This is a stage where poor groups are the central actors who stealth-like draw on complex alliances across ethnic and class lines to shapes cities in their interests.