Enabling Investment through Urban Property Formalization: Experimental Evidence from Colombia

Existing observational evidence suggests that secure, formal property rights promote economic development. Yet, despite the individual and social benefits, most land in the developing world is not registered, due in part to high (administrative) costs. In this project, we randomly assign the cost of property formalization services in Medellin, Colombia to estimate (1) the demand for formalization and (2) the effect of formalization on access to credit, entrepreneurship, and local fiscal outcomes. Our experimental design avoids the selection problems that plague prior studies, and allows us to study neighborhood-level spillovers from property formalization. This project advances SEED’s mission by evaluating an intervention, implemented by an innovative social enterprise, that seeks to alleviate poverty by bolstering entrepreneurship and fiscal capacity in developing countries.