Bank-funded research showed property titling failed to increase credit for the poor
Evidence
In March 1996 the Peruvian government passed a law on property formalization and established an agency, COFOPRI (Comisión de Formalización de la Propiedad Informal), to take over the ILD program and turn it into a national scheme, recruiting members of the ILD team. In 1998 the World Bank stepped in with a loan for the completion of the program. Research funded by the bank showed that the program had failed to achieve its goal: property titling had produced no increase in credit to the poor. Concerned by the failure, in 2000 the World Bank carried out a survey of informal neighborhoods. The survey’s primary purpose was to encourage commercial banks to lend money to the neighborhoods by providing them with data that would reduce the cost of assessing the creditworthiness of low-income households. It was this survey that became the basis for the “natural experiment” whose extraordinary results attracted such attention. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1954
Categorization
- QUESTION: The impact literature celebrated the Lima titling experiment as a success, yet the World Bank’s own funded research found no credit increase — worth tracing how the narrative diverged from the finding.
- XREF: Echoes the broader critique of de Soto’s titling thesis and the ‘natural experiment’ methodology debates in development economics. — connects to: Peruvian property titling failed to boost credit but raised work effort — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1925; Institutions promoted flawed property-titling projects as successes to secure further funding — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1933; Field’s titling study results may reflect political context rather than property effects — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1929
Broader Connections
- Peruvian property titling failed to boost credit but raised work effort
#corroborates(0.95) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1925 - Institutions promoted flawed property-titling projects as successes to secure further funding
#expands(0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1933 - Field’s titling study results may reflect political context rather than property effects
#qualifies(0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1929