Speaker: Jevgenijs Steinbuks is an Economist at the World Bank's Development Research Group, Environment and Energy Research Team. More »
Abstract: : We analyze the joint dynamics of property rights and urbanization, a key yet under explored relation that underpins the process of economic development. Using a dynamic stochastic model of urbanization with endogenous demand for property rights over land use, we demonstrate that the costly provision of those rights may result in both residential informality that can persist over time and suboptimal urbanization where cities are too small and insufficiently productive. As land administrations are difficult to reform, achieving the second best may require acceptance of some level of informality. However, urban elites may favor welfare-reducing policies that over-evict informal dwellers.
Last Updated: Jun 13, 2016