Effects of public policies on informal and formal urban expansion. A comparative impact evaluation between neighborhood legalization and slum upgrading policies in Bogota-Colombia
Thesis
One of the main characteristics of Latin American cities’ recent history has been the rapid and uncontrolled expansion of the informal and illegal city, which, just in the case of Bogot´a, has led to a housing deficit of more than 352,000 households (14% of the population of the city by 2022). Among the most relevant policies designed to address these situations are neighborhood legalization and ”mejoramiento integral de barrios”-MIB (neighborhood upgrading programs), which legally recognizes informal settlements and provides them with improvements, public services, and public infrastructure. These policies have been strongly criticized and even prohibited due to the supposed perverse incentives they generate for informal expansion and illegal land occupation. To validate whether these perverse effects exist, we used recent developments in staggered differences-in-differences models with geographic spillovers to detect the causal effects of both policies on informal/illegal city expansion. We found that legalization does not incentivize illegal growth. Furthermore, on the contrary, legalization encourages formal construction, especially the consolidation and densification of residential areas. On the other hand, we find substantial causal effects of the MIB program on the increase in illegal occupations, both in and around treated areas, increases that are not fully accompanied by household relocation policies. Finally, although changes in treatment effects were observed simultaneously with changes in the regulatory framework of both policies, we did not find sufficient evidence to ensure that national regulations generate changes in agents’ behavior.
