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02-10: Efficiency and Growth Effects of Land Interventions
Legitimizing the State or a Grievance?: Land Restitution and Titling in Colombia
Columbia University, United States of America
Can granting formal property rights incentivize political engagement or help rebuild war-torn communities? This paper examines whether the formal recognition of a right----in particular, a formal property right to land---affects an individual's incentives to engage in politics. Theoretically, I argue that formal property rights are powerful symbols that legitimize claim-making and incentivize property owners to engage in politics. However, this impact is conditional on the broader institutional environment and whether the state can adequately guarantee rights. I examine titling programs in Colombia's countryside, including an ambitious land restitution policy targeted specifically at victims of internal displacement and armed conflict. I find evidence that formalization is associated with increases in voter turnout, use of courts, and willingness to engage in politics, but only in areas with weak institutions. I support these findings with qualitative evidence suggesting that property rights have a symbolic importance that goes beyond changes in tenure security.
Land and Growth
World Bank, United States of America
Land and Growth
Firms need capital, labor and land to produce output. More efficient firms can produce more output if they have better access to factors of production. While there may not be such a thing as a perfectly efficient factor allocation, there are huge gains to be made by reducing factor misallocation. However, our knowledge of which factor market is more distorted is still at an early stage. Might it be the case that land markets are much more distorted than capital and labor markets in developing countries? If yes, there is huge need and scope to scale up investments in advisory services focused on land and growth.
Property Rights Reforms and Local Economic Development: Evidence from Mexico
UC Berkeley, United States of America
A recent literature explores the effects of rural land titling programs on labor reallocation. Yet, we have little evidence on the second-order effects titling programs can have on the non-agricultural sector for both local areas and surrounding cities. This paper fills that gap by using the rollout of the Mexican land title program Procede together with restricted-access data on non-agricultural firms. We employ a panel fixed effects research design to control for the non-random rollout of the program. Our preliminary results suggest that outmigration, as opposed to increased local labor supply or income effects, from rural areas is the likely dominating force with total wages and the number of large firms decreasing. The results of the land reform are heterogeneous – areas favorable to agriculture have differentially more firms, driven primarily by small-scale manufacturing, but lower wages. Further iterations of this paper will include analysis on cities and agricultural production.