Legal Heritage and Urban Slums
Posted: 15 Jun 2018
Date Written: May 28, 2018
This paper studies the effect of former colonies having inherited British common law vs. civil law on the incidence of slum dwelling in developing countries. While common law favors decentralized markets and stronger property rights, civil law yields more government regulation and weaker property rights. We find that that the common law legal origin is associated with a lower incidence of slum conditions. Property rights and the regulatory framework are two potential mechanisms through which legal origins influence urban slum formation. Finally, we find that the present-day effect of common law vs. civil law is weaker where the colonial administration was to a greater degree delegated to local chiefs (indirect rule). In sum, colonialism has persistent effects on the pattern of contemporary urban housing stocks in developing countries.
Keywords: legal origin, land use, regulation, property rights, urban slum, housing supply
JEL Classification: K15, O15, Q15, R14
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