IDEAS home Printed from https://ideas.repec.org/a/kap/ejlwec/v59y2025i3d10.1007_s10657-025-09845-z.html
   My bibliography  Save this article

Property rights on unused assets and investment incentives: evidence from Brazil

Author

Listed:
  • Pietro Vertova

    (University of Bergamo)

Abstract

It is usually stated that property rights security on assets positively affects investment incentives since it guarantees the ability to get the future benefits from investments. Yet, the empirical evidence on this relationship is ambiguous. From a theoretical point of view, this is not surprising since property rights security on asset may even entail a negative effect on investment incentives as long as property rights are endogenous to investments (Besley, Journal of Political Economy 103:903–937, 1995) or investors are characterized by time-inconsistent preferences (Vertova, Review of Socio-Economic Perspectives 5:61–75, 2020). Instead, from a theoretical point of view, a clear-cut negative relationship exists between property rigths security on unused assets (the expected ability to invest on a unsued asset) and investment incentives. In this paper I test this theoretical prediction using a difference-in-difference matching method on Brazilian municipal data. I find that land occupations by Landless Workers’Movement (as a proxy for property rights insecurity on unused assets) positively affect the degree of land use (as a proxy for investment) in Brazilian municipalities.

Suggested Citation

  • Pietro Vertova, 2025. "Property rights on unused assets and investment incentives: evidence from Brazil," European Journal of Law and Economics, Springer, vol. 59(3), pages 419-437, June.
    • Handle: RePEc:kap:ejlwec:v:59:y:2025:i:3:d:10.1007_s10657-025-09845-z
    DOI: 10.1007/s10657-025-09845-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10657-025-09845-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10657-025-09845-z?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Migot-Adholla, Shem, et al, 1991. "Indigenous Land Rights Systems in Sub-Saharan Africa: A Constraint on Productivity?," The World Bank Economic Review, World Bank, vol. 5(1), pages 155-175, January.
    2. Lee J. Alston & Gary D. Libecap & Bernardo Mueller, 2005. "How Interest Groups with Limited Resources can Influence Political Outcomes: Information Control and the Landless Peasant Movement in Brazil," ICER Working Papers 15-2005, ICER - International Centre for Economic Research.
    3. Andrade, Eduardo & Laurini, Marcio & Madalozzo, Regina & Valls Pereira, Pedro L., 2004. "Convergence clubs among Brazilian municipalities," Economics Letters, Elsevier, vol. 83(2), pages 179-184, May.
    4. Alston, Lee J. & Libecap, Gary D. & Mueller, Bernardo, 2000. "Land Reform Policies, the Sources of Violent Conflict, and Implications for Deforestation in the Brazilian Amazon," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 162-188, March.
    5. Kaplow, Louis & Shavell, Steven, 2002. "Economic analysis of law," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 25, pages 1661-1784, Elsevier.
    6. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    7. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    8. 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.
    9. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
    10. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    11. 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.
    12. F. Place & K. Otsuka, 2002. "Land Tenure Systems and Their Impacts on Agricultural Investments and Productivity in Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 38(6), pages 105-128.
    13. 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.
    14. Pinckney, Thomas C & Kimuyu, Peter K, 1994. "Land Tenure Reform in East Africa: Good, Bad or Unimportant?," Journal of African Economies, Centre for the Study of African Economies, vol. 3(1), pages 1-28, April.
    Full references (including those not matched with items on IDEAS)

    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. Xu Guangdong, 2013. "Property Rights, Law, and Economic Development," The Law and Development Review, De Gruyter, vol. 6(1), pages 117-142, July.
    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. 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.
    4. Daniel Ayalew Ali & Stefan Dercon & Madhur Gautam, 2011. "Property rights in a very poor country: tenure insecurity and investment in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 42(1), pages 75-86, January.
    5. Thomas Vendryes, 2014. "Peasants Against Private Property Rights: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 971-995, December.
    6. 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.
    7. Leight, Jessica, 2016. "Reallocating wealth? Insecure property rights and agricultural investment in rural China," China Economic Review, Elsevier, vol. 40(C), pages 207-227.
    8. Lai, Yani & Wang, Jiayuan & Lok, Waiming, 2017. "Redefining property rights over collective land in the urban redevelopment of Shenzhen, China," Land Use Policy, Elsevier, vol. 69(C), pages 485-493.
    9. Deininger, Klaus & Ali, Daniel Ayalew & Alemu, Tekie, 2008. "Impacts of land certification on tenure security, investment, and land markets : evidence from Ethiopia," Policy Research Working Paper Series 4764, The World Bank.
    10. Meeks, Robyn, 2018. "Property Rights and Water Access: Evidence from Land Titling in Rural Peru," World Development, Elsevier, vol. 102(C), pages 345-357.
    11. Rohini Pande & Christopher Udry, 2005. "Institutions and Development:A View from Below," Working Papers 928, Economic Growth Center, Yale University.
    12. Kabubo-Mariara, Jane, 2007. "Land conservation and tenure security in Kenya: Boserup's hypothesis revisited," Ecological Economics, Elsevier, vol. 64(1), pages 25-35, October.
    13. Shohei Nakamura, 2017. "Does slum formalisation without title provision stimulate housing improvement? A case of slum declaration in Pune, India," Urban Studies, Urban Studies Journal Limited, vol. 54(7), pages 1715-1735, May.
    14. Place, Frank, 2009. "Land Tenure and Agricultural Productivity in Africa: A Comparative Analysis of the Economics Literature and Recent Policy Strategies and Reforms," World Development, Elsevier, vol. 37(8), pages 1326-1336, August.
    15. 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.
    16. Castañeda Dower, Paul & Pfutze, Tobias, 2013. "Specificity of control: The case of Mexico's ejido reform," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 13-33.
    17. 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).
    18. Kotchikpa Gabriel Lawin & Lota Tamini, 2018. "Droits de propriété foncière et performance des petits producteurs agricoles des pays en développement : une synthèse de la littérature empirique," CIRANO Working Papers 2018s-05, CIRANO.
    19. 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.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

    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:kap:ejlwec:v:59:y:2025:i:3:d:10.1007_s10657-025-09845-z. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.