Does global titling sustain informal taxation? Evidence from Ecuadorian urban slums

Abstract

AbstractLow-income urban neighborhoods in developing countries receive low levels of public services, often not supplemented by community provision due to low rates of informal tax compliance. This paper presents evidence from low-income neighborhoods in Quito, Ecuador using an IV empirical strategy that the global titling of neighborhoods sustains informal taxation. The estimates reveal a sizable average effect of global titling on in-kind labor household that is drawn from a broad base. Evidence is also found which suggests that the possession of a global title provides a neighborhood organisation with tools that deter free-riding behavior even among the individually-titled residents.