The Impacts of Restrictions to Individual Rights on Indigenous Lands

Many countries in the Americas impose restrictions on Indigenous land transactions to preserve Indigenous ownership, but these policies may inhibit economic growth. This paper evaluates the impact of Chiles 1993 Indigenous Law, which restricts the transfer, lease, and mortgaging of land in Mapuche territories. Using property records, we find that the law has slowed Mapuche territorial loss. However, its effectiveness has declined over time, coinciding with a reduction in properties registered in the Public Registry of Indigenous Territories (PRIT), a key enforcement tool. Analysis of property sales following owner deaths underscores the PRITs critical role, with listed properties experiencing lower sales rates and smaller reductions in Indigenous ownership compared to unlisted properties. Using remotely sensed data and two complementary identification strategies, we reject meaningfully large impacts of PRIT on land use. The results highlight that transfer restrictions on individual property rights can serve as an effective tool to protect Indigenous ownership without imposing significant economic burdens, although special attention should be given to the design of enforcement mechanisms to ensure their effective implementation.