IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v116y2015icp43-56.html
   My bibliography  Save this article

Do better property rights improve local income?: Evidence from First Nations' treaties

Author

Listed:
  • Aragón, Fernando M.

Abstract

This paper examines the effect of an improvement in property rights on a local economy using the case of First Nations' modern treaties. These treaties are an important institutional reform that clarifies ownership of land and natural resources near Aboriginal communities. Using confidential micro-data, I find evidence of a positive impact of modern treaties on real income. The effect is driven by employment income and spreads across workers in industries not directly affected by the reform. I also find an increase in real wages and housing costs. The effects are similar in neighboring communities outside Indian reserves. These results are consistent with property right reforms creating a positive demand shock that affects the whole local economy. This is a yet understudied mechanism through which better property rights can generate positive local spillovers.

Suggested Citation

  • Aragón, Fernando M., 2015. "Do better property rights improve local income?: Evidence from First Nations' treaties," Journal of Development Economics, Elsevier, vol. 116(C), pages 43-56.
    • Handle: RePEc:eee:deveco:v:116:y:2015:i:c:p:43-56
    DOI: 10.1016/j.jdeveco.2015.03.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387815000401
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2015.03.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fernando M. Arag?n & Juan Pablo Rud, 2013. "Natural Resources and Local Communities: Evidence from a Peruvian Gold Mine," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 1-25, May.
    2. Donna L. Feir, 2016. "The long‐term effects of forcible assimilation policy: The case of Indian boarding schools," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(2), pages 433-480, May.
    3. John Kennan & James R. Walker, 2011. "The Effect of Expected Income on Individual Migration Decisions," Econometrica, Econometric Society, vol. 79(1), pages 211-251, January.
    4. Enrico Moretti, 2010. "Local Multipliers," American Economic Review, American Economic Association, vol. 100(2), pages 373-377, May.
    5. Richard Hornbeck, 2010. "Barbed Wire: Property Rights and Agricultural Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 767-810.
    6. Christopher Alcantara, 2007. "Reduce transaction costs? Yes. Strengthen property rights? Maybe: The First Nations Land Management Act and economic development on Canadian Indian reserves," Public Choice, Springer, vol. 132(3), pages 421-432, September.
    7. Simon Johnson & John McMillan & Christopher Woodruff, 2002. "Property Rights and Finance," American Economic Review, American Economic Association, vol. 92(5), pages 1335-1356, December.
    8. 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.
    9. de Janvry, Alain & Gonzalez-Navarro, Marco & Sadoulet, Elisabeth, 2014. "Are land reforms granting complete property rights politically risky? Electoral outcomes of Mexico's certification program," Journal of Development Economics, Elsevier, vol. 110(C), pages 216-225.
    10. Enrico Moretti, 2013. "Real Wage Inequality," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 65-103, January.
    11. 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.
    12. O. Ashenfelter & D. Card (ed.), 2011. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 4, number 4.
    13. Moretti, Enrico, 2011. "Local Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 14, pages 1237-1313, Elsevier.
    14. O. Ashenfelter & D. Card (ed.), 2011. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 4, number 5.
    15. Marena Brinkhurst & Anke Kessler, 2013. "Land Management on First Nations Reserves: Lawful Possession and its Determinants," Discussion Papers dp13-04, Department of Economics, Simon Fraser University.
    16. Christopher Alcantara, 2008. "To Treaty or Not to Treaty? Aboriginal Peoples and Comprehensive Land Claims Negotiations in Canada -super-1," Publius: The Journal of Federalism, CSF Associates Inc., vol. 38(2), pages 343-369, Spring.
    17. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    18. Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, vol. 4(3), pages 290-311, September.
    19. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 536-598, June.
    20. Timothy Besley & Robin Burgess, 2000. "Land Reform, Poverty Reduction, and Growth: Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 389-430.
    21. Anderson, Terry L. & Parker, Dominic P., 2009. "Economic development lessons from and for North American Indian economies," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(1), pages 1-23.
    22. Guido W. Imbens, 2015. "Matching Methods in Practice: Three Examples," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 373-419.
    23. 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.
    24. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
    25. William N. Evans & Julie H. Topoleski, 2002. "The Social and Economic Impact of Native American Casinos," NBER Working Papers 9198, National Bureau of Economic Research, Inc.
    26. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
    27. Abhijit V. Banerjee & Paul J. Gertler & Maitreesh Ghatak, 2002. "Empowerment and Efficiency: Tenancy Reform in West Bengal," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 239-280, April.
    28. Timothy J. Besley & Konrad B. Burchardi & Maitreesh Ghatak, 2012. "Incentives and the De Soto Effect," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 237-282.
    29. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    30. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
    31. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 111-143, June.
    32. Terry L. Anderson & Dominic P. Parker, 2008. "Sovereignty, Credible Commitments, and Economic Prosperity on American Indian Reservations," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 641-666, November.
    33. Maitreesh Ghatak & Sanchari Roy, 2007. "Land reform and agricultural productivity in India: a review of the evidence," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(2), pages 251-269, Summer.
    34. Michael Greenstone & Enrico Moretti, 2003. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," NBER Working Papers 9844, National Bureau of Economic Research, Inc.
    35. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    36. Akee, Randall K. Q. & Jorgensen, Miriam & Sunde, Uwe, 2012. "Constitutions and Economic Development: Evidence from the American Indian Nations," IZA Discussion Papers 6754, Institute of Labor Economics (IZA).
    37. Melanie Morten, 2016. "Temporary Migration and Endogenous Risk Sharing in Village India," NBER Working Papers 22159, National Bureau of Economic Research, Inc.
    38. Randall Akee, 2009. "Checkerboards and Coase: The Effect of Property Institutions on Efficiency in Housing Markets," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 395-410, May.
    39. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 20-54, January.
    40. Peter Kuhn & Arthur Sweetman, 2002. "Aboriginals as unwilling immigrants: Contact, assimilation and labour market outcomes," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(2), pages 331-355.
    41. Christian Dippel, 2014. "Forced Coexistence and Economic Development: Evidence From Native American Reservations," Econometrica, Econometric Society, vol. 82, pages 2131-2165, November.
    42. 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. Donn L Feir & Rob Gillezeau & Maggie E C Jones, 2024. "The Slaughter of the Bison and Reversal of Fortunes on the Great Plains," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1634-1670.
    2. Mueller, Bernardo, 2022. "Property rights and violence in indigenous land in Brazil," Land Use Policy, Elsevier, vol. 116(C).
    3. Adofu, Ilemona & Okwanya, Innocent & Adofu,Sophia Ojochogwu & Eraye, Micheal, 2024. "Land Tenure Insecurity and Agricultural Recovery: Evidence from Displaced Farmers in North-Central Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 12(3), July.
    4. Donn. L. Feir & Maggie E. C. Jones & David Scoones, 2024. "When do nations tax? The adoption of property tax codes by First Nations in Canada," Public Choice, Springer, vol. 199(3), pages 285-318, June.
    5. Donn Feir & Rob Gillezeau & Maggie Jones, 2017. "The Slaughter of the North American Bison and Reversal of Fortunes on the Great Plains," Department Discussion Papers 1701, Department of Economics, University of Victoria.
    6. Laurel Wheeler, 2019. "Property Rights, Place-Based Policies, and Economic Development," Working Papers 19-16, Center for Economic Studies, U.S. Census Bureau.

    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. Subramanian, Arjunan & Kumar, Parmod, 2024. "Property rights, factor allocation and household welfare: Experimental evidence from a land titling program in India," Journal of Development Economics, Elsevier, vol. 167(C).
    2. 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.
    3. Xu, Huayu, 2021. "The long-term health and economic consequences of improved property rights," Journal of Public Economics, Elsevier, vol. 201(C).
    4. aus dem Moore, Jan Peter & Spitz-Oener, Alexandra, 2012. "Bye bye, GI: The impact of the US military drawdown on local German labor markets," SFB 649 Discussion Papers 2012-024, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    5. Leonard, Bryan & Parker, Dominic P. & Anderson, Terry L., 2020. "Land quality, land rights, and indigenous poverty," Journal of Development Economics, Elsevier, vol. 143(C).
    6. Laurel Wheeler, 2019. "Property Rights, Place-Based Policies, and Economic Development," Working Papers 19-16, Center for Economic Studies, U.S. Census Bureau.
    7. Muñoz-Mora, Juan Carlos & Tobón, Santiago & d’Anjou, Jesse Willem, 2018. "The role of land property rights in the war on illicit crops: Evidence from Colombia," World Development, Elsevier, vol. 103(C), pages 268-283.
    8. Ho, Hoang-Anh, 2021. "Land tenure and economic development: Evidence from Vietnam," World Development, Elsevier, vol. 140(C).
    9. repec:hum:wpaper:sfb649dp2012-024 is not listed on IDEAS
    10. Thiemo Fetzer & Samuel Marden, 2017. "Take What You Can: Property Rights, Contestability and Conflict," Economic Journal, Royal Economic Society, vol. 0(601), pages 757-783, May.
    11. Sonia Bhalotra & Abhishek Chakravarty & Dilip Mookherjee & Francisco J. Pino, 2019. "Property Rights and Gender Bias: Evidence from Land Reform in West Bengal," American Economic Journal: Applied Economics, American Economic Association, vol. 11(2), pages 205-237, April.
    12. Ramírez-Álvarez, Aurora Alejandra, 2019. "Land titling and its effect on the allocation of public goods: Evidence from Mexico," World Development, Elsevier, vol. 124(C), pages 1-1.
    13. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    14. Leight, Jessica, 2016. "Reallocating wealth? Insecure property rights and agricultural investment in rural China," China Economic Review, Elsevier, vol. 40(C), pages 207-227.
    15. Donn L Feir & Rob Gillezeau & Maggie E C Jones, 2024. "The Slaughter of the Bison and Reversal of Fortunes on the Great Plains," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1634-1670.
    16. Sha, Wenbiao, 2023. "The political impacts of land expropriation in China," Journal of Development Economics, Elsevier, vol. 160(C).
    17. Iván Higuera-Mendieta, 2016. "Persistencias históricas y discontinuidades espaciales: territorios comunitarios en el Pacífico colombiano," Documentos de Trabajo Sobre Economía Regional y Urbana 14635, Banco de la República, Economía Regional.
    18. Alain de Janvry & Kyle Emerick & Marco Gonzalez-Navarro & Elisabeth Sadoulet, 2015. "Delinking Land Rights from Land Use: Certification and Migration in Mexico," American Economic Review, American Economic Association, vol. 105(10), pages 3125-3149, October.
    19. Besley, Timothy & Ghatak, Maitreesh, 2009. "The de Soto effect," LSE Research Online Documents on Economics 25429, London School of Economics and Political Science, LSE Library.
    20. Goldstein, Markus & Houngbedji, Kenneth & Kondylis, Florence & O'Sullivan, Michael & Selod, Harris, 2018. "Formalization without certification? Experimental evidence on property rights and investment," Journal of Development Economics, Elsevier, vol. 132(C), pages 57-74.
    21. Deininger, Klaus & Goyal, Aparajita, 2012. "Going digital: Credit effects of land registry computerization in India," Journal of Development Economics, Elsevier, vol. 99(2), pages 236-243.

    More about this item

    Keywords

    Property rights; Institutions; Local development; First Nations; Treaties;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

    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:eee:deveco:v:116:y:2015:i:c:p:43-56. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    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.