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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 of this view is that squatters "squeeze" the formal market, raising the price paid by formal residents. The squatter organizer, however, ensures that this squeezing is not too severe, since otherwise the formal price will rise to a level that invites eviction by landowners (defensive expenditures by squatter households also help to forestall eviction). Because eviction is thus absent in equilibrium, the model differs crucially from previous analytical frameworks, where eviction occurs with some probability.

Suggested Citation

  • Jan K. Brueckner & Harris Selod, 2008. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," CESifo Working Paper Series 2328, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2328

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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Brueckner, Jan K., 2013. "Urban squatting with rent-seeking organizers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 561-569.
    3. Jedwab, Remi & Christiaensen, Luc & Gindelsky, Marina, 2017. "Demography, urbanization and development: Rural push, urban pull and…urban push?," Journal of Urban Economics, Elsevier, vol. 98(C), pages 6-16.
    4. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    5. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, Elsevier.
    6. Alexander Monge-Naranjo & Pedro Cavalcanti Ferreira & Luciene Torres de Mello Pereira, 2018. "Of Cities and Slums," Working Papers 2018-005, Human Capital and Economic Opportunity Working Group.
    7. Gilles Duranton, 2015. "Growing through Cities in Developing Countries," World Bank Research Observer, World Bank Group, vol. 30(1), pages 39-73.
    8. Cavalcanti Ferreira, Pedro & Monge-Naranjo, Alexander & Torres de Mello Pereira, Luciene, 2016. "Of Cities and Slums," Working Papers 2016-22, Federal Reserve Bank of St. Louis.
    9. Saku Aura & Francis K Cheung & Shawn Ni, 2015. "Why Doesn’t the Hong Kong Government Sell More Public Land?," Working Papers 2015-11, Department of Economics, University of Missouri.
    10. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    11. 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.
    12. Nilopa Shah, 2014. "Squatting On Government Land," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 114-136, January.
    13. O'Flaherty, Brendan & Sethi, Rajiv, 2010. "The racial geography of street vice," Journal of Urban Economics, Elsevier, vol. 67(3), pages 270-286, May.
    14. 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.

    More about this item

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets


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