Negotiating Informality– Ambiguity, Intermediation, and a Patchwork of Outcomes in Slums of Bengaluru

Abstract

In developing countries, procedural ambiguity due to bureaucratic overlap and political discretion gives rise to divergence between law and practice. In this context of pervasive informality, it is important to consider how local negotiations produce disparate outcomes. We examine these local negotiations to explain how informal property rights are acquired and how markets operate in the slums of Bengaluru, India. Drawing on original interview and survey data, we describe how at least 18 types of property documents issued to urban slum residents can be ordered along a tenure continuum. Intermediaries are required to negotiate the opportunities that lie hidden within ambiguity. A first set of political intermediaries helps slum residents acquire property rights incrementally along this continuum. A second set of intermediaries helps facilitate informal housing transactions, keeping markets liquid across the tenure continuum. The mechanics of acquiring and transacting informal properties can differ across cities and countries, but, across contexts, intermediation helps negotiate informality.