
El
índice está compuesto de la siguiente manera:
1) Legal and Political Environment (LP)
• Judicial Independence
• Confidence in Courts
• Political Stability
• Control of Corruption
2) Physical Property Rights (PPR)
• Protection of Physical Property Rights
• Registering Property
• Access to Loans
3) Intellectual Property Rights (IPR)
• Protection of Intellectual Property Rights
• Patent Protection
• Copyright Piracy
• Trademark Protection
La puntuación general obtenida por Argentina fue de 4.4, ubicándose en el puesto 81 (sobre 115 evaluados), lo que nos coloca en el cuarto quintil estadístico. (MAL)La puntuación en Legal and Political Environment fue de 3.6, ubicándose en el puesto 91.
La puntuación en Physical Property Rights fue de 4.7, ubicándose en el puesto 100.
La puntuación en Intellectual Property Rights fue de 4.8 ubicándose en el puesto 64.
CASE STUDY #2: BUENOS AIRES,ARGENTINAby Sebastian Galiani and Ernesto Schargrodsky
IntroductionThe fragility of property rights is considered a crucial obstacle for economic development. The
main argument is that individuals underinvest if others can seize the fruits of their investments. In today’s developing world, a pervasive manifestation of feeble property rights are the millions of people living in urban dwellings without possessing formal titles of the plots of land they occupy.
Land-titling programs have been recently advocated in policy circles as a powerful instrument for poverty reduction. Hernando De Soto emphasizes that the lack of property rights impedes the transformation of the wealth owned by the poor into capital.26 Proper titling could allow the poor to collateralize the land. In turn, this credit could be invested as capital in productive projects, promptly increasing labor productivity and income. Inspired by these ideas, and fostered by international development agencies and private institutions, land-titling programs have been launched throughout developing and transition economies as part of poverty alleviation efforts.
The important question is then the following: Are land-titling programs a powerful tool to reduce
poverty or will the societies that adopt them face another policy delusion? In other words, what are the causal effects of urban land titling? To answer this question is not easy at all. To identify what would happen to a family if they receive the title to the plot of land they inhabit instead of staying in that piece of land without the legal title is complicated: the problem is that we do not observe the same families in both situations.
A natural experimentThus, any attempt to answer the above questions has to compare families with and without land titles.
However, the allocation of property rights across households is usually not random but based on
wealth, family characteristics, individual effort, previous investment levels, or other mechanisms built on differences between the groups that acquire those rights and the groups that do not. Exogenous variability in the allocation of property rights is necessary to solve this selection problem.
In a series of recent papers we address this selection problem by exploiting a natural experiment in the allocation of urban land titles to a very deprived population in Argentina.27
The natural experiment exploited in these papers actually started in 1981, when about 1,800 landless families organized by a Catholic chaplain occupied a wasteland in the San Francisco Solano area, on the outskirts of Buenos Aires, Argentina. At the time of the occupation the squatters thought the land belonged to the state, but they later found out that it was private property. The occupied area turned out to be made up of 13 tracts of land belonging to different private owners, which were partitioned by the squatters into small, urban-shaped parcels for each household. The squatters resisted several eviction attempts during the military government. After Argentina’s return to democracy in 1984 the Congress of the Province of Buenos Aires passed a law expropriating the land from the former owners, in exchange for monetary compensation to be paid by the government, and allocating it to the squatters.
The resulting titling process, however, was incomplete and asynchronous. The government made a compensation offer to each original owner calculated in proportion to the official tax valuation of each tract of land, which had been set by the fiscal authority to calculate property taxes before the land occupation. The government offers were very similar (in per-square-meter terms) for the 13 land tracts.
Each of the original owners had to decide whether to accept the expropriation compensation proposed by the government or to start a legal dispute with the aim of obtaining higher compensation.
In 1986 eight of the 13 former owners accepted the compensation offered by the government.
The formal land titles that secured the property rights to the parcels were then transferred by the state to the squatters in 1989. However, five former owners did not accept the compensation offered by the government and disputed the expropriation payment in the slow Argentine courts. Thus the process of expropriation was incomplete. One of these five trials ended in 1998, and this tract of land was transferred to the squatters. The other four lawsuits were still pending at the time of writing.
A random allocationA result of this episode is that today there are two groups of squatters living in very close proximity to each other, one of which has formal property rights (because its members live on parcels of land that used to belong to the former owners who accepted the expropriation or whose lawsuit ended) and the other of which remains untitled (because its members occupied parcels of land belonging to the challenging owners). This allocation of land titles was unrelated (more precisely, exogenous) to the squatters’ characteristics. At the time of the occupation the squatters did not know that the land had private owners, nor that an expropriation law was going to be passed, nor which parcels of land had owners who would accept (or dispute) the compensation offer, nor which eventual lawsuits could end first. Titled and untitled households arrived at the same time and were similar at the time of their arrival.
A statistical comparison of the household characteristics of these two groups prior to receiving the treatment (that is, prior to one group receiving titles) shows that the hypothesis of random assignment of land titles during this natural experiment cannot be rejected. That is, there are no significant differences between the treatment and control groups in the age, gender, years of education, and other characteristics of the family member who was the household head at the time of the occupation. There are also no differences in plot characteristics. Moreover, the squatters had no participation in the legal process between the government and the former owners, and the values of the dwellings they constructed were explicitly excluded from the calculation of the expropriation compensation.
Obtaining property rights depended on the decision of the original owners to challenge the
expropriation as well as on the resolution of these legal processes. Given that these factors were
exogenous to the squatters, it is possible to study the effect of the intervention “to give property
rights” by comparing individuals who received and did not receive land titles, but who live in very close proximity, had similar pretreatment characteristics, and have been exposed to similar life experiences (with the exception of the treatment).
Experimental resultsOn creditDo titled households have more access to credit? The evidence provided suggests that there is not much difference on this respect. In addition, we do not find differences at all in their actual
earnings. Titled and untitled households have similar total earnings.28 Thus, should we conclude that entitling the urban poor is not a sensible policy? Not necessarily.
On housing investmentThe possession of land titles may affect the incentives to invest in housing construction through
several concurrent mechanisms, beyond credit access:
1.) The traditional view emphasizes security from seizure. Individuals underinvest if others may
seize the fruits of their investments.
2.) Land titles can also encourage investment by improving the transferability of the parcels.
Even if there were no risk of expropriation, investments in untitled parcels would be highly
illiquid, whereas titling reduces the cost of alienation of the assets.
3.) A third mechanism is that land titles provide poor households with a valuable savings tool.
Poor households, especially in unstable macroeconomic environments, lack appropriate
savings instruments. Land titles allow households to substitute present consumption and
leisure into long-term savings in real property.
Empirically the impact of legal land titles on housing investment indicates that entitled families own today much better houses than untitled families. There are large effects of land titling on the
probability of having walls and roof of good quality. The proportion of houses with good quality
walls rises by 40 percent under land titling, while the increase reaches 47 percent for good quality roof. The results also suggest a statistically significant increase of about 12 percent in constructed surface under the presence of land titles. Finally, the study finds that a variable summarizing the overall aspect of each house using an index from 0 to 100 shows a large and significant effect of land titling on housing quality. Relative to the baseline average sample value, the estimated effect represents an overall housing improvement of 37 percent associated to titling.
Thus, we can conclude that moving a poor household from usufructuary rights to full property rights substantially improves housing quality. The estimated effects are large and robust, and seem to be the result of changes in the economic returns to housing investment induced by land titling. Thus, this micro evidence supports the hypothesis that securing property rights significantly increases investment levels.
On household size and structureThe possession of land titles may also affect the size and structure of households. There are several potential reasons for that to happen. Insurance motives seem to be the most important. The poor lack access to well-functioning insurance markets and pension systems that could protect them during bad times and retirement. With limited access to risk diversification, to savings instruments, and to the social security system, the need for insurance has to be satisfied by other means. A traditional provider of insurance among the poor is the extended family. Another possibility is to use children as future insurance.
Moreover, the lack of land titles might reduce the ability of household heads to restrict their relatives from residing in their houses. In addition, untitled households may feel the need to increase the number of family members in order to protect their houses from occupation by other squatters.29
Indeed large differences exist in household size between titled and untitled families. Untitled families have an average of 6.06 members, while titled households have 0.95 members less. The difference in household size seems to originate in two factors. First, there is a higher presence (0.68 members) of non-nuclear relatives in untitled households. Untitled households report a much larger number of further relatives of the household head who are not her/his spouse or offspring (i.e., siblings, parents, inlaws, grandchildren, etc.) than entitled households. Second, the entitled households show a smaller number of offspring of the household head born after the title allocation.30
On children’s outcomesEarlier seminal work advances the presence of parental trade-offs between the quantity and the
quality of children. This trade-off appears because limited parents’ time and resources are spread over more children. If land titling causes a reduction in fertility, it could also induce households to increase educational investments in their children.31
We explore this hypothesis by looking at differences in educational outcomes. They show that for
the offspring of the household head in the 5-13 age group in the early-treated households (the
group of children for which they find a reduction in the number of members), there is a large effect on school achievement. The children in the control group show an average delay of 1.09 years in their school achievement, whereas this delay is 0.42 years shorter for the children in the early-titled parcels.32
Moreover, exploring the effects of land titling on child health shows that children in the titled
parcels enjoy better Weight-for-Height scores than those in the untitled parcels, although there are no significant differences in Height-for-Age measures. In addition, finds that teenage girls in the titled parcels show lower pregnancy rates than those in the untitled parcels. In the sample under study, teenage pregnancy is an important problem. 11.4% of the 14 to 17 years-old girls for whom an answer to their question on teenage pregnancy was provided, were or had been pregnant at least once. They find that the pregnancy rate was substantially higher in the untitled parcels (20.8%)
than in the titled parcels (7.9%).33
Thus, entitling the poor enhances their investment both in the house and on the human capital of
the children of the entitled families, which will reduce their poverty in the future.
On formation of beliefsFinally, exploiting this rare natural experiment, we most recently studied the formation of beliefs among squatters and found a significant difference in the beliefs that squatters with and without legal titles declare to hold. The measure of beliefs are obtained through survey questions designed to broadly capture beliefs that appear important to the workings of a market economy, namely individualism, materialism, the role of merit, and trust.34
The set of beliefs declared by squatters with property rights are significantly different from those held by squatters without titles. The change in beliefs is consistently in the direction of what can loosely be called “Market Beliefs” (for example, in the sense that they are more individualist and materialist). This is interesting because of the strong similarities in the lives of squatters with and without titles. Moreover, the estimated causal effect is sufficiently large so as to make the beliefs of squatters with legal titles comparable to those held by the Buenos Aires general population. This is interesting because of the remarkable differences in the lives these two groups lead.35
ConclusionThe study of institutions and their effect on behavior, economic development, and beliefs presents an opportunity to isolate and identify those policies that are most effective in helping societies defeat poverty. However, rare is the opportunity to study the effect of policy changes in an experimental nature such as the one discussed here. Doing so allows us make confident assessments about changes caused by the policy change itself (the “treatment”), rather other factors which may be simply correlated to the change and caused by other unobserved phenomena.
Thus the studies presented here, using a fortunate but uncommon exogenous change in titling status of squatters outside of Buenos Aires, allows us to peer into the decisions of households under different ownership status but with everything else held constant. Our results present evidence on the different channels through which policies on property rights could affect development and ultimately reduce poverty. By examining differences in housing quality, household composition and size, child health and education outcomes, and beliefs, we find that land-titling programs are indeed effective in causing changes in outcomes; changes that are positive and likely to aid in families’ battle against poverty.