Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru

23 Pages Posted: 28 Jul 2016 Last revised: 22 Sep 2016

See all articles by Italo A. Gutierrez

Italo A. Gutierrez

Independent Consultant

Oswaldo Molina

Universidad del Pacifico

Date Written: September 20, 2016

Abstract

Titling programs have focused only on providing initial tenure security, but have not paid attention to the process of maintaining the formality of future property transactions. Evidence shows that properties become de-regularized due to unregistered transactions in urban slums, reducing the households’ ability to reap the potential benefits of tenure security in the future. We exploit a natural experiment provided by the elimination of a registration system targeted to the poor in Peru to identify the effects of increasing the costs and complexity of registering property transactions in urban areas. We found that the elimination of such system led to a significant reduction in the probability of registering a transaction, including those transactions that involved a change in ownership. This presents an important threat to maintaining the benefits of the titling reform in the long run.

Keywords: property titling; informality; transaction costs; Peru; Latin America

JEL Classification: K11; O12; O17

Suggested Citation

Gutierrez, Italo A. and Molina, Oswaldo, Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru (September 20, 2016). RAND Working Paper Series WR-1156-1. Available at SSRN: https://ssrn.com/abstract=2815141 or http://dx.doi.org/10.2139/ssrn.2815141

Italo A. Gutierrez (Contact Author)

Independent Consultant ( email )

No Address Available

Oswaldo Molina

Universidad del Pacifico ( email )

Av. Salaverry 2020
Región Metropolitana
Lima 18, Santiago Lima 11
Peru

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