Land Property Rights and Resource Allocation

Abstract

In this paper we review the most significant empirical literature on the causal effects of land property rights. The literature finds that secure property rights in land improve investment in both rural and urban areas. These effects, however, do not appear to be the result of improved credit conditions. In rural areas, land rights also lead to increases in productivity and farm earnings. In contrast, for urban areas the evidence on the effect on earnings is mixed. We find little empirical evidence suggesting that land titling programs enhance the development of land markets. Finally, some evidence suggests that land titling induces changes in household structure that foster human capital accumulation and may contribute to increase the income of the future generations.