Squatters' Rights and Urban Development: An Economic Perspective.

Up to 35 percent of urban dwellers in third world cities are squatters. The characteristics of the squatting phenomenon are both varied and puzzling. Of particular interest are the observations that (1) landowners often do not collect rent from squatters for use of the land and (2) costly evictions are sometimes used without subsequent development of the land, which in many cases is resettled by squatters. The authors present an economic model of landowner-squatter interaction which is consistent with these observations. This model is then used to enlighten certain aspects of socially optimal land management policy for squatter areas. Copyright 1991 by The London School of Economics and Political Science.