The Determinants and Impact of Property Rights : Land Titles on the Brazilian Frontier

This paper provides new empirical results regarding the demand and supply of title, its impact on land value, and its effects on agricultural investment on Brazilian frontiers. We use survey data from 1992 and 1993 from the state of Para with data on the characteristics of the settlers, land tenure, land agencies involved, land values, and investment. We then turn to census data from the Brazilian agricultural census from 1940 through 1985, with observations at the municipio (county) level to examine the development of property rights to land in the southern state of Parana during the agricultural boom between 1940 and 1970 and in the Amazon state of Para during the period of rapid migration to the region after 1970. By examining frontiers we can follow the rise in land values with movement toward a market center, the associated increase in demand for title, and the response of government to those demands. The empirical findings generally support the predictions of the theory regarding the effects of title and investment on land value; the role of expected change in value in increasing demand for title; and the contribution for title for promoting land-specific investment. Governments, however, have not exactly followed the predictions of the analytical framework in supplying title. Political and bureaucratic factors play an important role in the government response to demands for title. This result suggests that researchers must pay special attention to the complex political process by which property rights are assigned in studying the emergence of tenure institutions. The research contributes both to narrower issues of economic development and to broader questions of institutional change