Property Rights, Community Public Goods, and Household Time Allocation in Urban Squatter Communities: Evidence from Peru
Year: 2004
Type: article
Study design: Observational Study
Abstract: TABLE OF CONTENTS INTRODUCTION I. CONCEPTUAL FRAMEWORK II. PROJECT BACKGROUND III. EMPIRICAL STRATEGY A. Regression Model IV. EMPIRICAL RESULTS A. Program Effect on Tenure Security B. Program Effect on Time Spent Inside the Home C. Program Effect on Time Outside the Home 1. Labor Supply 2. Leisure Activities Outside the Home D. Community-Level Evidence 1. Neighborhood Organizations 2. Law Enforcement CONCLUSION INTRODUCTION Urban property reform is an issue of current importance in many developing countries. Among policymakers, property titling is increasingly considered an effective form of government intervention for targeting the poor and encouraging economic growth in urban areas. (2) While there exists a wide body of literature demonstrating the positive influence of property institutions on market outcomes, there is little microeconomic evidence documenting the cost of informality to individual households. This Article contributes to the literature by examining the time costs of informal tenure arrangements in squatter communities. A number of authors have noted that, in many settings, informal institutions arise to compensate for the absence of formal property protection. (3) In such settings, one of the principal gains of strong property institutions is to shift the burden of property protection and enforcement away from individual households and informal communities to the state. (4) Hence, an important outcome of titling efforts that effectively increase household tenure security should be to allow households and communities to reallocate time away from this role. To explore the relationship between institutional reform and household-level resource allocation, this Article examines whether improvements in tenure security that result from giving property titles to urban squatters in Peru influence the time allocation of household members across labor and leisure activities inside and outside the home. In particular, this Article explores whether receiving a legal property title reduces the likelihood that households will keep individuals at home and inside the community to protect property, thus leading these individuals to increase employment and leisure hours outside the home. The idea underlying these predictions is that, in the absence of formal legal property protection, households and informal communities have an incentive to provide their own human resources for residential security, and thus, to consider the need to stay at home or close to home when making time allocation choices. Hence, this Article also examines whether strengthening property institutions encourages households to relocate entrepreneurial activity from inside to outside the home. Finally, because property formalization presumably shifts the burden of land protection from individual communities to the state, this Article examines whether titling is also associated with a reduction in the level of land-related neighborhood governance and an increase in the role of formal law enforcement at the neighborhood level. This Article examines these relationships using data from a dramatic nationwide titling program in Peru (Program), in which 1.2 million property titles were distributed to urban squatters on public land, the largest urban property rights reform that has occurred in the developing world. (5) The empirical strategy employed in this study takes advantage of the Program as a natural experiment by making use of staggered regional program timing. A general difficulty in studying the influence of property titles and a weakness inherent in the past literature is concerned over endogeneity that arises in comparing titled and untitled households. In particular, the tenure status of a given household is generally a function of the household demand for legal protection, which is likely to be related to factors affecting household and community time allocation choices. …
Author: Erica Field
Language: English
Subfield: Urban Studies
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1532175165