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A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries

  • Jan K. Brueckner
  • Harris Selod

This paper offers a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city. The key implication is that squatters "squeeze" the formal market, raising the price paid by formal residents. The squatter organizer ensures that squeezing is not too severe, since otherwise, the formal price will rise to a level that invites eviction by landowners. Because eviction is absent in equilibrium, the model differs from previous analytical frameworks, where eviction occurs with some probability. It also facilitates a general equilibrium analysis of squatter formalization policies. (JEL O15, Q15, R14)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.1.1.28
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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 1 (2009)
Issue (Month): 1 (February)
Pages: 28-51

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Handle: RePEc:aea:aejpol:v:1:y:2009:i:1:p:28-51
Note: DOI: 10.1257/pol.1.1.28
Contact details of provider: Web page: https://www.aeaweb.org/aej-policy
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  1. Galiani, Sebastian & Schargrodsky, Ernesto, 2004. "Effects of land titling on child health," Economics & Human Biology, Elsevier, vol. 2(3), pages 353-372, December.
  2. BOCCARD, Nicolas & ZENOU, Yves, 1999. "Racial discrimination and redlining in cities," CORE Discussion Papers 1999013, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Jha, Saumitra & Rao, Vijayendra & Woolcock, Michael, 2007. "Governance in the Gullies: Democratic Responsiveness and Leadership in Delhi's Slums," World Development, Elsevier, vol. 35(2), pages 230-246, February.
  4. Spinnewyn, Frans & Svejnar, Jan, 1990. "Optimal Membership, Employment, and Income Distribution in Unionized and Labor-Managed Firms," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 317-40, July.
  5. Lanjouw, J.O. & Levy, P.I., 1998. "Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador," Papers 788, Yale - Economic Growth Center.
  6. Zenou, Yves, 2002. "How Do Firms Redline Workers?," IZA Discussion Papers 607, Institute for the Study of Labor (IZA).
  7. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
  8. Duranton, Gilles, 2008. "From Cities to Productivity and Growth in Developing Countries," CEPR Discussion Papers 6634, C.E.P.R. Discussion Papers.
  9. Hoy, M. & Jimenez, E., 1988. "Squatters' Right And Urban Development: An Economic Perspective," Working Papers 1988-14, University of Guelph, Department of Economics and Finance.
  10. 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, Oxford University Press, vol. 122(1), pages 209-241.
  11. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, Oxford University Press, vol. 122(4), pages 1561-1602.
  12. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
  13. Jimenez, Emmanuel, 1984. "Tenure Security and Urban Squatting," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 556-67, November.
  14. Friedman, Joseph & Jimenez, Emmanuel & Mayo, Stephen K., 1988. "The demand for tenure security in developing countries," Journal of Development Economics, Elsevier, vol. 29(2), pages 185-198, September.
  15. Catherine Farvacque-Vitkovic & Lucien Godin & Hugues Leroux & Florence Verdet & Roberto Chavez, 2005. "Street Addressing and the Management of Cities," World Bank Publications, The World Bank, number 7342, February.
  16. Lall, Somik V. & Lundberg, Mattias K.A. & Shalizi, Zmarak, 2008. "Implications of alternate policies on welfare of slum dwellers: Evidence from Pune, India," Journal of Urban Economics, Elsevier, vol. 63(1), pages 56-73, January.
  17. Robert M. Buckley & Jerry Kalarickal, 2006. "Thirty Years of World Bank Shelter Lending : What Have We Learned?," World Bank Publications, The World Bank, number 7061, February.
  18. Jimenez, Emmanuel, 1985. "Urban squatting and community organization in developing countries," Journal of Public Economics, Elsevier, vol. 27(1), pages 69-92, June.
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