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Urbanization and Property Rights / Cai, Yongyang.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Cai, Yongyang
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Agglomeration.
- Banks and banking reform.
- Economic development.
- Finance and financial sector development.
- Governance.
- Informality.
- Land property rights.
- Public sector development.
- Public sector management and reform.
- Urban development.
- Urban governance and management.
- Urban housing.
- Local Subjects:
- Agglomeration.
- Banks and banking reform.
- Economic development.
- Finance and financial sector development.
- Governance.
- Informality.
- Land property rights.
- Public sector development.
- Public sector management and reform.
- Urban development.
- Urban governance and management.
- Urban housing.
- Physical Description:
- 1 online resource (42 pages)
- Place of Publication:
- Washington, D.C. : The World Bank, 2015.
- System Details:
- data file
- Summary:
- Since the industrial revolution, the economic development of Western Europe and North America was characterized by continuous urbanization accompanied by a gradual phasing-in of urban land property rights over time. Today, however, the evidence in many fast urbanizing low-income countries points towards a different trend of "urbanization without formalization", with potentially adverse effects on long-term economic growth. This paper aims to understand the causes and the consequences of this phenomenon, and whether informal city growth could be a transitory or a persistent feature of developing economies. A dynamic stochastic equilibrium model of a representative city is developed, which explicitly accounts for the joint dynamics of land property rights and urbanization. The calibrated baseline model describes a city that first grows informally, with the growth of individual incomes leading to a phased-in purchase of property rights in subsequent periods. The model demonstrates that land tenure informality does not necessarily vanish in the long term, and the social optimum does not necessarily imply a fully formal city, neither in the transition, nor in the long run. The welfare effects of policies, such as reducing the cost of land tenure formalization, or protecting informal dwellers against evictions are subsequently investigated, throughout the short-term transition and in the long-term stationary state.
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