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(This blog post has been co-authored with Christine Kimes)
The World Bank’s mission is to fight poverty with passion and professionalism for lasting results. Over the coming years the locus of poverty will increasingly shift to urban areas. Two thirds of the world’s population will be living in cities by 2025, and a third of these residents are likely to be poor. By 2030, the urban population in South Asia and Sub-Saharan Africa – the world’s poorest regions – is expected to double. The Bank in keeping with its inspiring mission will necessarily have to focus more energy and resources in tackling the problems of urban poverty.
It is increasingly recognized that well-defined property rights are crucial for realizing the benefits of market exchange and that such rights are not exogenously given but evolve over time in response to economic and political forces. The reduction of expropriation risk and the facilitation of market transactions are the two main categories through which property rights systems affect economic outcomes. However, the mechanisms by which these two categories affect outcomes differ in important ways.