Description: Urbanization and Property Rights

Urbanization and Property Rights

Since the industrial revolution, the economic development of Western Europe and North America was characterized by continuous urbanization accompanied by a gradual phasing-in of urban land property rights over time. Today, however, the evidence in...

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Bibliographic Details
Main Authors:	Cai, Yongyang, Selod, Harris, Steinbuks, Jevgenijs
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	STATE LAW INSTITUTIONAL REFORMS EMPLOYMENT INSTITUTIONAL CHANGE CITY SIZE SQUATTERS LAND TRANSACTIONS LAND MARKET LOW-INCOME HOUSEHOLDS PROPERTY RIGHT LOCAL AUTHORITIES URBANIZATION WAGES URBAN GROWTH EXHIBITS PARTICIPATION INCOME INTEREST UTILITIES VALUE LAWS BANK URBAN CONGESTION INDUSTRY CREDIT MACROECONOMICS INSTITUTIONAL QUALITY LARGE CITIES LOCAL GOVERNMENTS STRATEGIES REPORTS POLITICAL ECONOMY HOUSING HOUSEHOLD CAPITALIZATION LAND PROPERTY PROPERTY URBAN LAND PRICING HABITAT TRANSACTION COSTS RURAL URBAN MIGRATION CITIES URBAN POOR LAND TENURE URBAN DEVELOPMENT ECONOMICS LAND PRICES LAND TITLE GOVERNANCE POVERTY REDUCTION TAXATION SLUMS SETTLEMENTS PRESENT VALUE PUBLIC POLICY LAND STATES LAND TITLING INCOME ELASTICITY RISK URBAN ECONOMY TRANSPORT RURAL AREAS FIXED COSTS PRODUCTIVITY EXTERNALITIES MIGRATION BUILDING CRITERIA MARKETS LEGISLATION FEES INSTITUTIONAL FRAMEWORK LABOR GOVERNMENTS URBAN POPULATION LAND VALUE LAND MANAGEMENT REAL ESTATE FINANCE ECONOMIC CONDITIONS PUBLIC LAND USE LAND ADMINISTRATION LAND GRABBERS
Online Access:	http://documents.worldbank.org/curated/en/2015/11/25260752/urbanization-property-rights http://hdl.handle.net/10986/23450

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Summary:	Since the industrial revolution, the economic development of Western Europe and North America was characterized by continuous urbanization accompanied by a gradual phasing-in of urban land property rights over time. Today, however, the evidence in many fast urbanizing low-income countries points towards a different trend of “urbanization without formalization”, with potentially adverse effects on long-term economic growth. This paper aims to understand the causes and the consequences of this phenomenon, and whether informal city growth could be a transitory or a persistent feature of developing economies. A dynamic stochastic equilibrium model of a representative city is developed, which explicitly accounts for the joint dynamics of land property rights and urbanization. The calibrated baseline model describes a city that first grows informally, with the growth of individual incomes leading to a phased-in purchase of property rights in subsequent periods. The model demonstrates that land tenure informality does not necessarily vanish in the long term, and the social optimum does not necessarily imply a fully formal city, neither in the transition, nor in the long run. The welfare effects of policies, such as reducing the cost of land tenure formalization, or protecting informal dwellers against evictions are subsequently investigated, throughout the short-term transition and in the long-term stationary state.

Urbanization and Property Rights

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