Land Titles and Conflicts in Guatemala Karen Macours SAIS-Johns Hopkins University

Effects of land titling ? Mixed evidence to date Different reasons: –Effect of title depends on other factors Other market imperfections (Carter and Olinto, Boucher et al.) Formal versus informal property rights (Braselle et al., Lanjouw and Levy) ~ titles do not necessarily increase property rights security ~ other factors affecting security (rule of law, conflict resolution, … ) might matter –Problems with identification

Contribution of this paper Relationship between the impact of land titles depend on conflicts and conflict resolution mechanisms  Potential lessons for targeting Instrument exploiting correlations resulting from historical land title processes

Titles and conflicts in Guatemala Long-standing conflicts related to land access Weak rule-of-law Customary conflict resolution mechanisms => Widespread property rights insecurity

History of land titling (1) Late 19 th century: coffee boom –government encouraged transformation from community to private property –Titling through application by individual possessors or community authority –Some communities/owners applied, others didn’t –Some communities lost (part of) their land to outsiders, who obtained title or not  Geographic correlation of title status

History of land titling (2) Systematic titling efforts since then have not affected the regions of study But: Ley de titulacion Supletoria => individuals can claim titles based on “10 year peaceful possession” => Current title status not exogenous

Data 20 communities, 2 regions Info on 1822 households and all their plots Geographic location of all the plots (community maps) Detailed information about community conflicts and conflict resolution mechanisms Information obtained through key informants ~ sensitivity of information on land and conflicts

Outcome variables

Conflicts and conflict resolution (1)

Conflicts and conflict resolution (2) No clear pattern of different institutions specializing in certain conflicts Conflict resolution mechanisms do not show clear patterns in duration, intensity, or the number of actors involved Instead: different communities rely disproportionally on different mechanisms

Conflicts and conflict resolution (3)

Identification Title status plot mostly determined at end of 19 th century Since then: land fragmentized among many owners, … But title status of neighboring plots still correlated with each other Use average title status of upto 5 neighboring plots (from different owners) as instrument –Should be uncorrelated to many landlord and plot characteristics –Control for plot characteristics that might be spatially correlated (and possible related to title status) –Control for family background and other characteristics of the owner

First stage

Efficiency of plot use: Lin. Prob.

Efficiency of plot use: IV

Extensive plot use: Lin. Prob.

Extensive plot use: IV

Credit access

Conflicts, title and efficiency of plot use

Conflicts, title and extensive plot use

Preliminary Conclusions Effects of titles on credit does not depend on conflicts Effects of titles on efficiency of plot use depends on conflict-context –Titles matter (more) for efficiency when conflicts are longer and when conflicts get resolved by community mechanisms –Intriguing pattern: titles are negatively related to efficiency when conflicts typically resolved by outside authorities