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American Economic Journal: Economic Policy: Vol. 1 No. 1 (February 2009)

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A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries

Article Citation

Brueckner, Jan K., and Harris Selod. 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries." American Economic Journal: Economic Policy, 1(1): 28-51.

DOI: 10.1257/pol.1.1.28

Abstract

This paper offers a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city. The key implication is that squatters "squeeze" the formal market, raising the price paid by formal residents. The squatter organizer ensures that squeezing is not too severe, since otherwise, the formal price will rise to a level that invites eviction by landowners. Because eviction is absent in equilibrium, the model differs from previous analytical frameworks, where eviction occurs with some probability. It also facilitates a general equilibrium analysis of squatter formalization policies. (JEL O15, Q15, R14)

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Authors

Brueckner, Jan K. (U CA, Irvine)
Selod, Harris (World Bank and CREST)

JEL Classifications

O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration
Q15: Land Ownership and Tenure; Land Reform; Land Use; Irrigation
R14: Land Use Patterns

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