Property Rights and Water Access: Evidence from Land Titling in Rural Peru

Abstract

Summary Insecure land tenure and property rights are an impediment to infrastructure access and services for households in many developing countries. This paper explores whether alleviating this impediment through a land-titling program in rural Peru is associated with improvements in household water sources, as well as sanitation and electricity services. The economics literature on the links between property rights and investment decisions has amassed; yet due to the necessity of water for life, the high fixed costs associated with water infrastructure construction, and the positive externalities that can result from water provision, it is not obvious how water services might respond to land tenure improvements. Utilizing the phased-in program timing in a quasi-experimental design, we exploit the differences in implementation timing across space in conjunction with the differences in program impact across households that held property titles prior to the project and those that did not. Results from this modified difference-in-differences method indicate that land titling is associated with small in magnitude, but statistically significant increases in water access. Larger gains in sanitation and electricity services are found. We investigate the channels through which this improved access occurs and find evidence of investments in all three services via either government or water utilities. We find evidence of individual household investment only in the case of sanitation. Taken together, these results indicate that land titles are important, but not sufficient to increase access to water and other services.