A Difficult Question in Deed: A Cost-Benefit Framework for Titling Programs

In this Article we explore the potential benefits and costs of a program to grant title to individuals who are occupying land informally. Only some of these benefits and costs have received careful empirical consideration in the literature. This Article references existing studies and draws on findings from original surveys of urban households in Ecuador. We consider how a titling program might affect the welfare of landowners and occupants, how it could alter the functioning of real estate markets, and whether it could build a community's social capital.

Potential benefits must be weighed against a range of costs, including those accruing to the government for implementation of the program, as well as those perceived by individuals in their efforts to obtain title. There also may be dynamic implications of a titling program. For example, these programs can spur further land invasions and render the role of intermediaries more lucrative. The importance of formal property rights and of formal legal systems in governing transactions and land use is of particular interest given that property rights are frequently assigned the prominent role of a prerequisite to economic growth.