IDEAS home Printed from https://ideas.repec.org/p/hal/psewpa/halshs-01703178.html
   My bibliography  Save this paper

The spatial sorting of informal dwellers in cities in developing countries: Theory and evidence

Author

Listed:
  • Harris Selod

    (The World Bank - The World Bank - The World Bank)

  • Lara Tobin

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We propose a theory of urban land use with endogenous property rights that applies to cities in developing countries. Households compete for where to live in the city and choose the property rights they purchase from a land administration which collects fees in inequitable ways. The model generates predictions regarding the levels and spatial patterns of residential informality in the city. Simulations show that land policies that reduce the size of the informal sector may adversely impact households in the formal sector through induced land price increases. Empirical evidence from a sub-Saharan African city supports the model's assumptions and outcomes.

Suggested Citation

  • Harris Selod & Lara Tobin, 2018. "The spatial sorting of informal dwellers in cities in developing countries: Theory and evidence," PSE Working Papers halshs-01703178, HAL.
    • Handle: RePEc:hal:psewpa:halshs-01703178
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01703178
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-01703178/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alain Durand Lasserve & Harris Selod, 2009. "The Formalization of Urban Land Tenure in Developing Countries," PSE-Ecole d'économie de Paris (Postprint) hal-00813117, HAL.
    2. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1426-1464, September.
    3. Jan K. Brueckner & Jacques-FranÁois Thisse & Yves Zenou, 2002. "Local Labor Markets, Job Matching, and Urban Location," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 155-171, February.
    4. Besley, Timothy & Ghatak, Maitreesh, 2010. "Property Rights and Economic Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4525-4595, Elsevier.
    5. Jean O. Lanjouw & Philip I. Levy, 2002. "Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador," Economic Journal, Royal Economic Society, vol. 112(482), pages 986-1019, October.
    6. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, January.
    7. Jimenez, Emmanuel, 1982. "The Value of Squatter Dwellings in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 30(4), pages 739-752, July.
    8. Jimenez, Emmanuel, 1985. "Urban squatting and community organization in developing countries," Journal of Public Economics, Elsevier, vol. 27(1), pages 69-92, June.
    9. Rafael Di Tella & Sebastian Galiant & Ernesto Schargrodsky, 2007. "The Formation of Beliefs: Evidence from the Allocation of Land Titles to Squatters," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(1), pages 209-241.
    10. Annette M. Kim, 2004. "A market without the ‘right’ property rights," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(2), pages 275-305, June.
    11. Selod, Harris & Zenou, Yves, 2003. "Private versus public schools in post-Apartheid South African cities: theory and policy implications," Journal of Development Economics, Elsevier, vol. 71(2), pages 351-394, August.
    12. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 195-227.
    13. Brueckner, Jan K., 2013. "Urban squatting with rent-seeking organizers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 561-569.
    14. Paul Collier & Anthony J. Venables, 2013. "Housing and Urbanization in Africa: unleashing a formal market process," CSAE Working Paper Series 2013-01, Centre for the Study of African Economies, University of Oxford.
    15. Turnbull, Geoffrey K., 2008. "Squatting, eviction and development," Regional Science and Urban Economics, Elsevier, vol. 38(1), pages 1-15, January.
    16. F. Daniel Hidalgo & Suresh Naidu & Simeon Nichter & Neal Richardson, 2010. "Economic Determinants of Land Invasions," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 505-523, August.
    17. Benjamin Marx & Thomas Stoker & Tavneet Suri, 2013. "The Economics of Slums in the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 187-210, Fall.
    18. Bruce, John W., 1998. "Country Profiles Of Land Tenure: Africa, 1996," Research Papers 12759, University of Wisconsin-Madison, Land Tenure Center.
    19. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
    20. Jan K. Brueckner & Harris Selod, 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 28-51, February.
    21. Brueckner, Jan K. & Selod, Harris, 2006. "The political economy of urban transport-system choice," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 983-1005, August.
    22. Robert M. Buckley & Jerry Kalarickal, 2006. "Thirty Years of World Bank Shelter Lending : What Have We Learned?," World Bank Publications - Books, The World Bank Group, number 7061, December.
    23. Paavo Monkkonen, 2012. "The Demand for Land Regularisation: Theory and Evidence from Tijuana, Mexico," Urban Studies, Urban Studies Journal Limited, vol. 49(2), pages 271-288, February.
    24. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1561-1602.
    25. Durand-Lasserve, Alain & Durand-Lasserve, Maylis & Selod, Harris, 2013. "A systemic analysis of land markets and land institutions in West African cities : rules and practices - the case of Bamako, Mali," Policy Research Working Paper Series 6687, The World Bank.
    26. Hoy, Michael & Jimenez, Emmanuel, 1991. "Squatters' Rights and Urban Development: An Economic Perspective," Economica, London School of Economics and Political Science, vol. 58(229), pages 79-92, February.
    27. Beckmann, Martin J., 1969. "On the distribution of urban rent and residential density," Journal of Economic Theory, Elsevier, vol. 1(1), pages 60-67, June.
    28. Adarkwah Yaw Antwi & John Adams, 2003. "Rent-seeking Behaviour and its Economic Costs in Urban Land Transactions in Accra, Ghana," Urban Studies, Urban Studies Journal Limited, vol. 40(10), pages 2083-2098, September.
    29. Jimenez, Emmanuel, 1984. "Tenure Security and Urban Squatting," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 556-567, November.
    30. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cai, Yongyang & Selod, Harris & Steinbuks, Jevgenijs, 2018. "Urbanization and land property rights," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 246-257.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1399-1455, Elsevier.
    2. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    3. Brueckner, Jan K., 2013. "Urban squatting with rent-seeking organizers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 561-569.
    4. Brueckner, Jan K. & Rabe, Claus & Selod, Harris, 2019. "Backyarding: Theory and evidence for South Africa," Regional Science and Urban Economics, Elsevier, vol. 79(C).
    5. Brueckner, Jan K. & Mation, Lucas & Nadalin, Vanessa G., 2019. "Slums in Brazil: Where are they located, who lives in them, and do they ‘squeeze’ the formal housing market?," Journal of Housing Economics, Elsevier, vol. 44(C), pages 48-60.
    6. Ignacio Navarro & Geoffrey Turnbull, 2014. "Property Rights and Urban Development: Initial Title Quality Matters Even When it No Longer Matters," The Journal of Real Estate Finance and Economics, Springer, vol. 49(1), pages 1-22, July.
    7. Letrouit,Lucie Michele Maya & Selod,Harris, 2020. "Trust or Property Rights ? Can Trusted Relationships Substitute for Costly Land Registration in West African Cities ?," Policy Research Working Paper Series 9310, The World Bank.
    8. M. Picard,Pierre & Selod,Harris, 2020. "Customary Land Conversion and the Formation of the African City," Policy Research Working Paper Series 9192, The World Bank.
    9. Galiani, Sebastián & Gertler, Paul J. & Undurraga, Raimundo & Cooper, Ryan & Martínez, Sebastián & Ross, Adam, 2017. "Shelter from the storm: Upgrading housing infrastructure in Latin American slums," Journal of Urban Economics, Elsevier, vol. 98(C), pages 187-213.
    10. Jan K. Brueckner & Harris Selod, 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 28-51, February.
    11. Panman, Alexandra & Lozano Gracia, Nancy, 2022. "Titling and beyond: Evidence from Dar es Salaam, Tanzania," Land Use Policy, Elsevier, vol. 117(C).
    12. Alves, Guillermo, 2021. "Slum growth in Brazilian cities," Journal of Urban Economics, Elsevier, vol. 122(C).
    13. Vivas, H & Franco, A, 2021. "Spatial heterogeneity of housing prices in formal and informal settlements: A GWR hedonic model for segmented markets in Cali," Documentos de trabajo - Alianza EFI 19293, Alianza EFI.
    14. Galiani Sebastian & Schargrodsky Ernesto, 2016. "The Deregularization of Land Titles," Man and the Economy, De Gruyter, vol. 3(2), pages 169-188, December.
    15. Nilopa Shah, 2014. "Squatting On Government Land," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 114-136, January.
    16. Nakamura, Shohei, 2017. "Tenure Security Premium in Informal Housing Markets: A Spatial Hedonic Analysis," World Development, Elsevier, vol. 89(C), pages 184-198.
    17. Mr. Mauricio Moura & Mr. Caio Piza & Mr. Marcos Poplawski Ribeiro, 2011. "The Distributive Effects of Land Titleon Labor Supply: Evidence From Brazil," IMF Working Papers 2011/131, International Monetary Fund.
    18. Eric Heikkila & Michael Lin, 2014. "An integrated model of formal and informal housing sectors," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 121-140, January.
    19. Cai, Yongyang & Selod, Harris & Steinbuks, Jevgenijs, 2018. "Urbanization and land property rights," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 246-257.
    20. Sebastian Galiani & Ernesto Schargrodsky, 2011. "The Dynamics of Land Titling Regularization and Market Development," WIDER Working Paper Series wp-2011-088, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Land markets; Property rights; Tenure security; Multiple sales;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:psewpa:halshs-01703178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.