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Squatters, Pirates, and Entrepreneurs: Is Informality the Solution to the Urban Housing Crisis?

Carmen G. Gonzalez

Seattle University School of Law

August 27, 2008

University of Miami Inter-American Law Review, Vol. 40, p. 239, 2009

Giving the poor legal title to the lands they occupy extra-legally (informally) has been widely promoted by the World Bank and by best-selling author Hernando de Soto as a means of addressing both poverty and the scarcity of affordable housing in the urban centers of the global South. Using Bogota, Colombia, as a case study, this article interrogates de Soto's claims about the causes of informality and the benefits of formal title. The article concludes that de Soto's analysis is problematic in three distinct respects. First, de Soto exaggerates the benefits of formal title and fails to consider its risks. Second, de Soto constructs informality as a uniquely Third World phenomenon, and neglects to address the growth of poverty, inequality, and informality in both the global North and the global South as a consequence of deregulation, privatization, and other neoliberal economic reforms that de Soto advocates. Third, de Soto's attribution of informality to the failure of law in the global South reinforces the narrative of Latin American inferiority, thereby justifying the imposition of disadvantageous market-oriented legal reforms on Latin American nations and discrediting Latin America legal innovations that might better alleviate poverty and address the shortage of affordable housing. Contrary to de Soto's policy prescriptions, the advantages and disadvantages of formality and informality will vary from location to location, and must be evaluated on a case by case basis. De Soto's ideas are dangerous to the extent that they persuade policy-makers that the free market will solve the problem of poverty and housing scarcity if the urban poor are simply given legal title to the lands they currently occupy informally.

Number of Pages in PDF File: 22

Keywords: informality, housing, land use, World Bank, property law, neoliberalism, privatization, deregulation, informal sector, squatters, economic and social rights, human rights, law and development

JEL Classification: A12, K00, K11, K42, N46, O17, R31, R38, R52

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Date posted: August 29, 2008 ; Last revised: September 15, 2014

Suggested Citation

Gonzalez, Carmen G., Squatters, Pirates, and Entrepreneurs: Is Informality the Solution to the Urban Housing Crisis? (August 27, 2008). University of Miami Inter-American Law Review, Vol. 40, p. 239, 2009. Available at SSRN: http://ssrn.com/abstract=1260040

Contact Information

Carmen G. Gonzalez (Contact Author)
Seattle University School of Law ( email )
901 12th Avenue, Sullivan Hall
P.O. Box 222000
Seattle, WA n/a 98122-1090
United States

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