Paper #1787

Title:

Land titling and litigation

Authors:

Benito Arruñada, Marco Fabbri and Michael Faure

Date:

July 2021

Abstract:

We study a large-scale land titling reform implemented as a randomized control-trial to isolate its causal effects on litigation. The reform consisted of demarcating land parcels, registering existing customary rights, and granting additional legal protection to rightholders. We find that, ten years after implementation, the reform doubled the likelihood of households experiencing land-related litigation, but disputes do not escalate into more frequent violent episodes. We suggest that this litigation increase is likely to reflect the complementarity of land titling by registration and by judicial procedures aimed at further clarifying property rights, as the reform registered titles to all parcels but left many of these titles subject to adverse claims. This raised the demand for complementary litigation aimed at perfecting titles for low value parcels which, under the customary system, it was individually optimal to keep unclarified. Consistent with this explanation, we find that the observed increase in litigation takes place among households characterized by low levels of wealth and market integration, who are likely to own land of lower value.

Keywords:

Experimental survey, informal institutions, land rights formalization, land tenure reform, litigation, randomized control trial

JEL codes:

K11; K4; Q15

Area of Research:

Business Economics and Industrial Organization

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