Political Divide, Weak Property Rights, and Infrastructure Provision: An Empirical Examination of Takings Decisions in Jerusalem

Abstract

In this article I use a unique hand-coded dataset of all expropriation exercises in Jerusalem over a twenty-five-year period to test the distribution of the expropriation burden across political communities. I identify the ethnoreligious group to which the impacted landowner belongs and the community that would benefit from the decision. I find that Palestinian property constitutes 38 percent of all land taken over the years, while only 10 percent of all land taken has been repurposed for their local community needs. Conversely, Jewish owners have contributed only 4 percent of all land taken while benefiting from 33 percent of the land taken for their community needs. I also find that land not owned by Jews has a higher propensity to be taken for citywide purposes by ten to twenty-three times than Jewish land, depending on the purpose and the type of property rights involved. This sharp gap can be attributed to the political power relations in the city. The case study enables me to test the relationship between weak property rights and infrastructure provision. As property rights are formally recorded and recognized selectively in some but not in all parts of the city, the article provides the first empirical evidence to the effect of weak property rights on the risk of expropriation. I find that the propensity for noncommunity purpose takings of nonformalized land for which Palestinians claim ownership but have no official records to is significantly higher when compared to formalized Palestinian land. This outcome contradicts the conventional wisdom in the literature that weak property rights help explain limited infrastructure development.