Barrio study links land ownership to a better life

In San Francisco Solano, the difference made by land ownership is visible along the muddy streets where boys fish for frogs in the drainage ditches. On a stretch of 816th Street where residents own their lots, the Quevedo family is finishing a brick addition to their sprawling house. Florinda González boasts that her older son recently added a second floor to the house, and that her younger son completed a technical-school course to become an electrician. Felicia Cuevas talks with pride of how well her son is doing in the first grade of the private school he attends.

On a part of 893rd Street where residents don't hold titles, there is little evidence of such dynamism. Dominga Abalo has her hands full trying to ride herd over the brood of kids who live in her crumbling brick hut. Ricardo González frets about finding money to finish rebuilding his weather-beaten roof, a project that has been stalled for two years. As chickens peck the ground at her feet, Norma Olive worries about a teenage son who dropped out of school.

Interest in titling has been sparked by Peruvian economist Hernando de Soto, whose best-selling books argue that guaranteeing urban property rights is a precondition for alleviating urban poverty. Marginalized people can use land titles as collateral to obtain bank loans and to participate more fully in the economy, he says. Mr. de Soto has a host of prominent international supporters, including Bill Clinton, who a few years ago joined the Peruvian in Ghana for the launch of a titling program.

Governments throughout Latin America, as well as in countries like South Africa, Turkey and Thailand, have experimented with Mr. de Soto's ideas. Multinational organizations such as the World Bank have loaned hundreds of millions of dollars to support such projects.

The way San Francisco Solano was settled makes it a "natural experiment" for testing titling's effect. "It's a dream kind of empirical study...a treasure," says Nobel Prize-winning economist Douglass C. North, a specialist in property rights at Washington University in St. Louis.

•	Barrio Study Links Land Ownership to a Better Life Why Some Squatters Thrive, While Others Lose Hope in Argentine Neighborhood Shanties Become Ranches Wall Street Journal, Byline: Matt Moffett, WSJ Staff Reporter