Opposition to climate policies is partly due to their impacts on inequality. But with most economic studies focused on income inequalities, the quantitative spatial effect of economic climate policy instruments is poorly understood. Here, using a model derived from the standard urban model of urban economics, we simulate a fuel tax in Cape Town, South Africa, decomposing its impacts by income class, housing type, and location, and over different timeframes, assuming that agents gradually adapt. We find that in the short term, there are both income and spatial inequalities, with low-income households or suburban dwellers more negatively impacted. These inequalities persist in the medium and long terms, as the poorest households, living in informal or subsidized housing, have few or no ways to adapt to fuel price increases by changing housing type, size or location, or transportation mode. Low-income households living in formal housing are also impacted by the tax over the long term due to complex effects driven by competition with richer households in the housing market. Complementary policies promoting a flexible labor market, affordable public transportation, or subsidies that help low-income households live closer to employment centers will be key to the social acceptability of climate policies.  

We propose an urban land use model to discuss the conversion of customary agricultural land to formal and informal residential land in a developing country city. Because customary land sales are insecure, migrant buyers face a risk of eviction, which affects land markets in non-trivial ways. Both tenure risk and asymmetric information cause the city extent and population to be too small. Empirical tests of the model for Bamako, Mali, confirm the existence of tenure insecurity and information asymmetry in the primary but not in the secondary land market, consistently with information revelation after initial sales by customary holders. 

We present an urban land use model with land tenure insecurity and information asymmetry regarding risks of contested land ownership, a very common issue in West African cities. A market failure emerges as sellers do not internalize the impact of their market participation decision on the average quality of traded plots, which in turn affects other sellers and buyers’ decisions. The equilibrium is suboptimal and has too many transactions of insecure plots and too few transactions of secure plots. This market failure can be addressed when agents trade along trusted kinship lines that discourage undisclosed sales of insecure plots. Such kinship matching is an important feature of West African societies, including on the market for informal land, as illustrated by a unique survey administered in Bamako, Mali. In the model, the extent to which the market failure is addressed increases with the intensity of kinship ties. When sellers also have the possibility of registering their property right in a cadastre, this not only further attenuates information asymmetry but also helps reduce risk. We find complementarity between kinship matching and registration: As transactions along trusted kinship lines tend to involve plots that are more secure on average, kinship matching makes registration better targeted at insecure plots traded outside kinship ties. In this context, a partial registration fee subsidy can bring the economy to the social optimum.

This paper explores the incentives for backyarding, an expanding category of urban land-use in developing countries that has proliferated South Africa. The theoretical model exposes the trade-off faced by the homeowner in deciding how much backyard land to rent out: loss of yard space consumption in return for a gain in rental income. Under common forms for preferences, the homeowner's own-consumption of yard space falls as land rent increases, causing more land to be rented to backyarders. With better job access for backyarders raising land rent by increasing their willingness-to-pay, the analysis then predicts that the extent of backyarding will be higher for parcels with good job access. This hypothesis is tested by combining a satellite-based count of backyard dwellings per parcel with job-access data. The empirical results are consistent with the prediction that better job access increases the extent of backyarding.  

We analyze the joint dynamics of land property rights and urbanization, a key yet underexplored relation that underpins the process of economic development. Using a dynamic stochastic model of urbanization with endogenous demand for property rights over land use, we demonstrate that the costly provision of those rights may result in both residential informality that can persist over time and suboptimal urbanization whereby cities are too small and insufficiently productive. In developing countries, because land administrations in charge of issuing titles are difficult to reform, achieving the second best may require acceptance of some level of informality in spite of the negative externalities stemming from informal land tenure and informal settlements. This may not be easily implemented as urban elites may favor overall welfare-reducing policies that over-evict informal dwellers. 

We present evidence from the first large-scale randomized-controlled trial of a land formalization program. We examine the link between land demarcation and investment in rural Benin in light of a model of agricultural production under insecure tenure. The demarcation process involved communities in the mapping and attribution of land rights, cornerstones marked parcel boundaries and offered lasting landmarks. The tenure security improvement through demarcation induces a 23 to 43 percent shift toward long-term investment on treated parcels. We explore gender and parcel location as relevant dimensions of heterogeneity. We find that female-managed landholdings in treated villages are more likely to be left fallow—an important soil fertility investment. Women respond to an exogenous tenure security change by shifting investment away from relatively secure, demarcated land and toward less secure land outside the village to guard those parcels. 

We review evidence regarding the size and evolution of the "land rush" in the wake of the 2007–8 boom in agricultural commodity prices, and we study the determinants of foreign land acquisition for large-scale agricultural investment. The use of data on bilateral investment relationships to estimate gravity models of transnational land-intensive investments confirms the central role of agro-ecological potential as a pull factor. However, this finding contrasts the standard literature insofar as the quality of the destination country's business climate is insignificant, and weak tenure security is associated with increased interest for investors to acquire land in the country. Policy implications are discussed. 

Depuis la flambée des prix agricoles de 2007-2008, les médias se sont fait l’écho d’une « course aux terres » à l’échelle planétaire selon laquelle des pays importateurs de denrées alimentaires chercheraient à sécuriser leurs approvisionnements en acquérant de larges quantités de terres cultivables dans des pays en développement. Au-delà des comportements spéculatifs répondant à la fluctuation des prix mondiaux, les analystes voient dans ce phénomène une réponse à la pression démographique et à l’anticipation d’une hausse de la demande mondiale de produits agricoles amplifiée par l’évolution des revenus et modes de vie. Les enjeux pour le développement sont majeurs. Opportunité de développement d’un secteur agricole d’exportation ? Ou bien risque de pillage des terres au détriment des utilisateurs actuels, détruisant la petite agriculture familiale et exacerbant les risques environnementaux ? 

Ce travail s’inscrit en amont de la problématique en cherchant à identifier les déterminants des investissements transnationaux qui s’accompagnent d’acquisitions de terres à grande échelle. En l’absence de base de données internationale et compte tenu de la difficulté de consolider les informations nationales, notre étude se base sur des informations publiées dans la presse internationale et la construction d’indicateurs adéquats de potentiel agro-écologique et de gouvernance foncière. L’estimation de modèles gravitaires utilisant ces variables montrerait une spécificité des investissements agricoles fonciers contrastant avec la littérature sur les investissements en général : alors que le rôle central du potentiel agro-écologique comme facteur d’attraction serait confirmé, les variables usuelles de gouvernance n’auraient aucun effet. Paradoxalement, les pays où les populations ne jouissent que d’une faible sécurité foncière apparaitraient même comme les plus attractifs, ce qui irait dans le sens des inquiétudes relayées par la presse et les organisations non gouvernementales. 

This paper offers a new theoretical approach to urban squatting, reflecting the view that squatters and formal residents compete for land within a city. The key implication is that squatters "squeeze" the formal market, raising the price paid by formal residents. The squatter organizer ensures that squeezing is not too severe, since otherwise, the formal price will rise to a level that invites eviction by landowners. Because eviction is absent in equilibrium, the model differs from previous analytical frameworks, where eviction occurs with some probability. It also facilitates a general equilibrium analysis of squatter formalization policies.  

This paper assesses the relationship between access to markets and land cultivation in sub-Saharan Africa. Using a geo-referenced panel over four decades (1970–2010) during which the road network was significantly improved, we find a modest impact of improved market accessibility on local cropland expansion – especially in places that are exposed to better agricultural production conditions – as well as suggestive evidence of an increase in the local intensity of cultivation. Suggestive evidence of a positive association between improved market accessibility and local GDP growth beyond the impact of cropland expansion could reflect the stimulation of non-agricultural activities. 

This survey reviews the current state of the economic literature, assessing the impact of transport investments and policies on growth, inclusion, and sustainability in a developing country context. It also discusses the specific implementation challenges of transport interventions in developing countries. 

This paper analyzes the political economy of transport-system choice, with the goal of gaining an understanding of the forces involved in this important urban public policy decision. Transport systems pose a continuous trade-off between time and money cost, so that a city can choose a fast system with a high money cost per mile or a slower, cheaper system. The paper compares the socially optimal transport system to the one chosen under the voting process, focusing on both homogeneous and heterogeneous cities, while considering different landownership arrangements. The analysis identifies a bias toward underinvestment in transport quality in heterogeneous cities. 

This paper presents an impact evaluation of the French enterprise zone program which was initiated in 1997 to help unemployed workers find employment by granting a significant wage-tax exemption (about one third of total labor costs) to firms hiring at least 20% of their labor force locally. Drawing from a unique geo-referenced dataset of unemployment spells in the Paris region over an extensive period of time (1993–2003), we are able to measure the direct effect of the program on unemployment duration, distinguishing between short- and medium-term effects. This is done by implementing an original two-stage empirical strategy using individual data in the first stage and aggregate data and conditional linear matching techniques in the second stage. We show that although the enterprise zone program tended to “pick winners”, it is likely to be cost-ineffective. It had a small but significant effect on the rate at which unemployed workers find a job (which is increased by a modest 3%). This effect is localized and significant only in the short run (i.e. at best during the 3 years that follow the start of the policy). 

Do spatial differences in unemployment duration reflect residential sorting or a true local effect? Focusing on the 1300 municipalities of the Paris region, we apply a methodology that disentangles individual and unspecified municipality effects. Estimating a proportional hazard model stratified by municipality and recovering a survival function for each municipality purged of individual observed heterogeneity, we show that local and individual characteristics add up in their contribution to unemployment duration. While only 30% of the spatial disparities in unemployment duration are explained by individual characteristics, 70% of the remaining disparities are captured by local indicators, mainly correlated with residential segregation. 

This paper investigates the causal effects of the spatial organisation of Brussels on unemployment propensities. Using census data at the individual level, the unemployment probability of young adults is estimated while taking into account personal, household and neighbourhood characteristics. The endogeneity of residential locations is solved by restricting the sample to young adults residing with their parents; the potential remaining bias is evaluated by conducting a sensitivity analysis. The results suggest that the neighbourhood of residence significantly increases a youngster's probability of being unemployed, a result which is quite robust to the presence of both observed and unobserved parental covariates. 

This article studies the effect of residential segregation and spatial mismatch (physical distance from the workplace) on unemployment. We begin with a brief summary of the economic literature on these issues. We then offer descriptive statistics to characterize the scope of residential segregation and spatial mismatch in the Paris region (Île-de-France) using 1999 census data and inter-city travel-time matrices for 2000. We conclude by estimating the effect of the local context (segregation and spatial mismatch ) on unemployment / employment transitions in the Paris region, using 1990-2002 Labor-Force Survey data. Our results show that unemployed persons in segregated districts have greater difficulty in finding new jobs. 

The spatial mismatch hypothesis (SMH) argues that low-skilled minorities residing in US inner cities experience poor labour market outcomes because they are disconnected from suburban job opportunities. This assumption gave rise to an abundant empirical literature, which is rather supportive of the SMH. Surprisingly, it is only recently that theoretical models have emerged, which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested. This article presents relevant facts, reviews the theoretical models of spatial mismatch, confronts their predictions with available empirical results and indicates which mechanisms deserve further empirical tests. 

We consider a search‐matching model in which black workers are discriminated against and the job arrival rates of all workers depend on social networks as well as distance to jobs. Location choices are mainly driven by racial preferences. There are multiple equilibria and we show that all workers are in general better off in the equilibrium where blacks are close to jobs. We also show that, in cities where black workers reside far away from jobs, the optimal policy is to impose higher quotas or employment subsidies than in cities where they live close to jobs. 

 What causes pockets of high unemployment within cities ? Economists point out at two alternative explanations : residential segregation as well as physical disconnection to jobs may have harmful labor-market effects. Our empirical work carried out on the Brussels metropolitan area supports the view that residential segregation exacerbates urban unemployment but does not enable us to assess the possible role of distance to jobs. 

Blacks and whites have different incomes, decide where to locate in the city and which school to send their children to. We show that, despite the tuition fees imposed by whites and their remote location, some black pupils attend the private school. This market solution is shown not to be optimal because whites overprice education in order to limit black attendance at the private school. Three types of education policies are then considered: transportation subsidies, private-school vouchers and public-school spending. The efficiency of such policies depends on the fee-setting behavior of whites that strongly varies from one policy to another. 

We model a South African city during Apartheid (in which both schooling and mobility are restricted on the basis of race) and after Apartheid (in which no restrictions are imposed). We first show that the inequality between blacks and whites decreases when apartheid laws are removed. Indeed, blacks are better off because of human capital externalities due to the possibility of mixing with white students, whereas whites are worse off due to negative human capital externalities and intensified land market competition. After Apartheid, we also show that reducing the commuting costs of black children always increases the utility of black families and may even increase that of whites. 

This paper focuses on the role of social interactions in the location decision of workers and on the consequences of this decision on labor-market outcomes. More precisely, there are three categories of workers: whites, the ethnic minority workers who abide by the white group’s norms (referred to as ‘status-seekers’), and the ethnic minority workers who are willing to build or restore a group culture (referred to as ‘conformists’). Moreover, there are two main determinants of job acquisition: the inherited ‘history’ of workers (such as social networks or labor discrimination) and the physical distance between their residential neighborhood and the location of jobs. In this context, when locating in the city, workers face a trade-o¤ between commuting costs (which depend on their average employment spells) and their ethnic preferences. We show that there are multiple equilibria in which either whites reside close to the business district while conformists locate further away from jobs (Equilibrium 1) or conformists reside close to jobs while whites locate at the other end of the city (Equilibrium 2). In both cases, status-seekers live in between the two other communities. In this framework, we show that distance to jobs is crucial to the labor-market outcomes of ethnic minorities whereas it matters less for whites because of their strong inherited advantage in terms of history. Finally, even though we are not able to analytically rank the two equilibria, numerical simulations show that Equilibrium 2 leads to a higher surplus than Equilibrium 1 in the more realistic cases. 

This paper reviews the recent literature on rural-urban migration in developing countries, focusing on three key questions: What motivates or forces people to migrate? What costs do migrants face? What are the impacts of migration on migrants and the economy? The literature paints a complex picture whereby rural-urban migration is driven by many factors and the returns to migration as well as the costs are very high. The evidence supports the notion that migration barriers hinder labor market adjustment and are likely to be welfare reducing. The review concludes by identifying gaps in current research and data needs.

The barriers faced by Chinese rural–urban migrants to access social services, particularly education, in host cities could help explain why the majority of them choose to leave their children behind. We identified the causal impacts of school fees by instrumenting for it with unexpected shocks to the city’s public education spending. Our findings suggest that higher fees deter migrant workers from bringing their children with them, especially their daughters, reduce the number of children they bring, and increase educational remittances to rural areas for the children left behind. Increases in school fees mostly affect vulnerable migrant workers and could have stronger impacts during an economic crisis. These findings hold for different model specifications and robustness checks.