Research on Registering Property

Entitled to Work: Urban Property Rights and Labor Supply in Peru

Author(s):

Erica Field

Journal: The Quarterly Journal of Economics, Vol. 122, No. 4, Pages 1561-1602, 2007
Abstract:

Between 1996 and 2003, the Peruvian government issued property titles to over 1.2 million urban households, the largest titling program targeted at urban squatters in the developing world. This paper examines the labor market effects of increases in tenure security resulting from the program. To isolate the causal role of ownership rights, I make use of differences across regions induced by the timing of the program and differences across target populations in level of preprogram ownership rights. My estimates suggest that titling results in a substantial increase in labor hours, a shift in labor supply away from work at home to work in the outside market, and substitution of adult for child labor.

Financial Development, Property Rights, and Growth

Author(s):

Stijn Claessens and Luc Laeven

Journal: Journal of Finance, 58 (6): 2401–36, 2003
Abstract:

In countries with more secure property rights, firms might allocate resources better and consequentially grow faster as the returns on different types of assets are more protected against competitors' actions. Using data on sectoral value added for a large number of countries, we find evidence consistent with better property rights leading to higher growth through improved asset allocation. Quantitatively, the growth effect is as large as that of improved access to financing due to greater financial development. Our results are robust using various samples and specifications, including controlling for growth opportunities.

Institutions, ownership, and finance: The determinants of profit reinvestment among Chinese firms

Author(s):

Robert Cull, Lixin Colin Xu

Journal: Journal of Financial Economics, Volume 77, Issue 1, Pages 117–146, 2005
Abstract:

Johnson et al. (2002. American Economic Review 92 (5), 1335–1356) examine the relative importance of property rights andexternal finance in several Eastern European countries. They find property rights to be overwhelmingly important, while external finance explains little of firm reinvestment. McMillan andWoodruff (2002. Journal of Economic Perspectives 16 (3), 153–170) further conjecture that as transition moves along, market-supporting (financial) institutions shouldbecome more important. This paper reexamines those issues in the context of China in 2002, when the transition hadmovedfar. We also findthat secure property rights are a significant predictor of firm reinvestment. However, in line with McMillan andWoodruff, we findthat access to external finance in the form of bank loans is also associatedwith more reinvestment. Following Acemoglu and Johnson (2003. Unbundling institutions. Unpublished working paper 9934, National Bureau of Economic Research, we separate our proxies for the security of property rights into two groups: those measuring the risk of expropriation by the government andthose measuring the ease and reliability of contract enforcement. Whereas those authors’ cross-country results suggest that risk of expropriation is the more severe impediment to economic development, ours indicate that both expropriation risk andcontract enforcement play a role in Chinese firms’ reinvestment decisions. We also find that another aspect of property rights, the extent of private ownership, is associated with greater reinvestment. At China’s current stage of development, expropriation risk, contract enforcement, access to finance, and ownership structure all appear to matter for reinvestment decisions. Some evidence also exists that access to finance and government expropriation affect small firms more than large ones."

Land Reform, Poverty Reduction and Growth: Evidence from India

Author(s):

Timothy Besley and Robin Burgess

Journal: Quarterly Journal of Economics 115 (2) 389-430, 2000
Abstract:

In recent times there has been a renewed interest in relationships between redistribution, growth and welfare. Land reforms have been central to strategies to improve the asset base of the poor in developing countries though their effectiveness has been hindered by political constraints on implementation. In this paper we use panel data on the sixteen main Indian states from 1958 to 1992 to consider whether the large volume of land reforms as have been legislated have had an appreciable impact on growth and poverty. The evidence presented suggests that land reforms do appear to be associated with poverty reduction.

Property Rights and Finance

Author(s):

Simon Johnson, John McMillan, and Christopher Woodruff

Journal: The American Economic Review, Volume 92, Issue 5, Pages 1335-1356, December 2002
Abstract:

Which is the tighter constraint on private sector investment: weak property rights or limited access to external finance? From a survey of new firms in post communist countries, we find that weak property rights discourage firms from reinvesting their profits, even when bank loans are available. Where property rights are relatively strong, firms reinvest their profits; where they are relatively weak, entrepreneurs do not want to invest from retained earnings.

Property Rights and Investment in Urban Slums

Author(s):

Erica Field

Journal: Journal of the European Economic Association 3 (2–3): 279–90, 2006
Abstract:

This paper examines the effect of changes in tenure security on residential investment in urban squatter neighborhoods. To address the endogeneity of property rights, I make use of variation in ownership status induced by a nationwide titling program in Peru. In a difference-in-difference analysis, I compare the change in housing investment before and after the program among participating households to the change in investment among two samples of nonparticipants. My results indicate that strengthening property rights in urban slums has a significant effect on residential investment: the rate of housing renovation rises by more than two-thirds of the baseline level. The bulk of the increase is financed without the use of credit, indicating that changes over time reflect an increase in investment incentives related to lower threat of eviction.

Property Rights and Investment Incentives: Theory and Evidence from Ghana

Author(s):

Timothy Besley

Journal: Journal of Political Economy, 103 (5): 903–937, 1995
Abstract:This paper examines the link between property rights and investment incentives. I develop three theoretical arguments based on security of tenure, using land as collateral and obtaining gains from trade. The paper then presents empirical evidence from two regions in Ghana. I investigate the possibility that rights are endogenous, with farmers making improvements to enhance their land rights. Finally, I suggest tests for which of the theories might explain the results.
Link: Property Rights and Investment Incentives: Theory and Evidence from Ghana

Regulation and Growth*

Author(s):

Simeon Djankov, Caralee McLiesh and Rita Ramalho

Journal: Economics Letters 92 (3): 395–401, 2006
Abstract:

Using objective measures of business regulations in 135 countries, we establish that countries with better regulations grow faster. Improving from the worst quartile of business regulations to the best implies a 2.3 percentage point increase in annual growth.

The Choice of Titling System in Land

Author(s):

Benito Arruñada and Nuno Garoupa

Journal: The Journal of Law and Economics, Vol. 48, 2005
Abstract:

This paper analyzes the choice of the socially optimal titling system assuming rational individual choices about recording, assurance, and registration decisions. It focuses on the enforcement of property rights to land under private titling and the two existing public titling systems, recording and registration. When the reduction in the expected costs of forfeiture balances the higher cost of initial registration, a registration system is more efficient than a recording system. Implications for title assurance, land improvements, and transactions are also considered.

The Economics of Land Title Reform*

Author(s):

Thomas J. Miceli and Joseph Kieyah

Journal: Journal of Comparative Economics 31 (2): 246-256, 2003
Abstract:

This paper develops a model of land title reform in which the voluntary adoption of a new system is not likely to be successful, even if the new system Pareto dominates the existing one. The problem is an externality that prevents individual landowners from internalizing fully the benefits of the new system. Some evidence is presented based on historic efforts to institute land registration in the United States and England. Implications are also drawn for ongoing attempts by developing countries to establish formal property rights systems for land in support of a policy to spur economic growth.

Trade, regulations, and income*

Author(s):

Caroline Freund and Bineswaree Bolaky

Journal: Journal of Development Economics 87(2): 309-321, 2008
Abstract:

We examine the relationship between openness and per-capita income using cross-country data from 126 countries. We find that trade leads to a higher standard of living in flexible economies, but not in rigid economies. Business regulation, especially on firm entry, is more important than financial development, higher education, or rule of law as a complementary policy to trade liberalization. Specifically, after controlling for the standard determinants of per-capita income, our results imply that a 1% increase in trade is associated with more than a one-half percent rise in per-capita income in economies that facilitate firm entry, but has no positive income effects in more rigid economies. The findings are consistent with Schumpeterian “creative destruction”, which highlights the importance of new business entry in economic performance, and with previous firm-level studies showing that the beneficial effects of trade liberalization come largely from an intra-sectoral reallocation of resources.