Protected Land Rights, Misallocation, and Dead Capital

• In Event: Equity in Public Service: Affirmative Action, Racial Equity and Land Right Considerations

Abstract

Protected Land Rights (PLRs) for marginalized communities encompass a quarter of land resources across 90 countries. Yet, the impact of PLRs on structural transformation and economic development is poorly understood. Theoretically, protection could support local entrepreneurship and industry. On the other hand, such measures might lead to the economic isolation of targeted areas. Drawing on newly collected historical and high-resolution data in the context of a spatial regression discontinuity design, this paper studies the long-run impact of PLRs. Land transfer restrictions between targeted and out-group members led to 17% higher agricultural income share, 15% lower firm density in non-primary sectors, and 8% lesser housing capital in PLR areas relative to adjacent non-PLR areas. Higher transaction costs in land markets led to land misallocation and impeded efficient land use conversion and agglomeration economies. Reducing constraints on market transactions for marginalized groups may thus foster entrepreneurship and growth.

Keywords: Land Markets, Economic Development, Property Rights, Ethnic Inequality, Place-Based Policies, Regression Discontinuity Designs 

Link to full paper:  https://www.dropbox.com/scl/fi/6yej9m8jgdu3pvkifpkvw/ankit-bhatia-academic-plr-jan2025.pdf?rlkey=b0pesv2rfevn05xw48jgqt63c&st=x0vl8lii&dl=0

Author

• Ankit Bhatia, Johns Hopkins University
  Presenting Author