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Property Rights Formalization: The Mystery of “Dacha Amnesty”

Property Rights Formalization: The Mystery of “Dacha Amnesty”. Ekaterina Khmelnitkskaya For Chicago Workshop on Institutional Analysis May 15-21, 2011. Motivation. Why Informal sectors are so widespread in developing countries, although they likely hinder their development?.

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Property Rights Formalization: The Mystery of “Dacha Amnesty”

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  1. Property Rights Formalization: The Mystery of “Dacha Amnesty” Ekaterina Khmelnitkskaya ForChicago Workshop on Institutional AnalysisMay 15-21, 2011

  2. Motivation • Why Informal sectors are so widespread in developing countries, although they likely hinder their development?

  3. - “Dacha amnesty” reform in Russia • We intend to single out the main factors affecting the progress of reform … • and to assess their relative significance in affecting reform outcomes .

  4. Literature • Formalization of property rights has long-run positive effects on development (De Soto (2004); Galiani et al. (2009)) • High barriers to entry benefit bureaucracy and other special interest groups (Djankov et al. (2002)) • “Property rights institutions” and “extractive institutions” (AJR(2001)) • Open access social orders and limited access social orders (North, Weingast, Wallis (2009)) • Informal property rights systems can be efficient in providing secure and transferable property rights (JacobyandMinten (2005); Lanjouw, Levy (2002))

  5. Basic facts (1) • Every second Russian has a dacha or a land plot (VCIOM, 2009) • As of 2006, about 40 mln. dachas were not formally owned by their de-facto owners; • Over 4 years of reform less then 10% of such dachas owners obtained secure property tiltes for their land and dweiings

  6. Basic facts (2)

  7. Hypotheses: demand side • Strong informal property rights • Value of a land plot • Other social effects • Bandwagon effect • land plots are not perceived as assets • Strong formal property rights

  8. Hypotheses: supply side • Government support for the reform is inadequate (investments in creating specialized property-related institutions) • Local registration offices may be “captured” by bureaucrats and other special interest groups

  9. Next steps • Survey data analysis • The purpose of survey is to study factors influencing individual decisions about formalization • Land registry and other sources of dafta • The purpose is to study trends and factors influencing the pace of reform

  10. Thank you for your attention! • Contacts – ekaterina.khmelnitskaya@gmail.com

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