Property Rights and Urban Form
How do the different elements in the standard bundle of property rights, including those of possession and transfer, influence the shape of cities? This paper incorporates insecure property rights into a standard model of urban land prices and density, and makes predictions about investment in land and property, informality, and the efficiency of land use. Our empirical analysis links data on institutions for land titling and transfer with multiple urban outcomes, in 190 countries. The evidence is generally consistent with the model’s predictions, and more broadly with the Demsetz’s (1967) approach to property rights institutions. Indeed, we document world-wide improvements in the quality of institutions facilitating property transfer over time.
We are deeply grateful to Lawrence Jia and Eva (Yiwen) Zhang for outstanding assistance with this research, and to Elodie Bataille, Marie Lily Delion, Egor Gornostay, Gary Hufbauer, Spencer Kwon, Nick Lore-Edwards, Robbie Minton, Rita Ramalho, Judith Trasancos, and Aigerim Zhanibekova for helpful comments. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank the governments they represent, or the National Bureau of Economic Research.