Institutional analysis and informal urban settlements: A proposition for a new institutionalist grounded property rights perspective

This paper proposes a generic process for conducting research on property rights in informal settlements from a new institutionalist perspective. The paper is premised on the fact that informal urban settlements have peculiar characteristics that complicate investigations using conventional methods. However, analytical approaches based on new institutionalism have gradually gained prominence over more traditional approaches amongst scholars in developing countries. New institutionalist methods of juxtaposing investigations of formal and informal institutions and relaxing some of the assumptions of conventional theories have enabled the inclusion of situations involving incomplete or imperfect property rights and positive transaction costs in the analysis. This paper shows that a “new institutionalist perspective” is not one coherent school of thought but rather a diverse group of theories with some common tenets dominated by three varieties of institutionalism, namely, rational choice, historical, and sociological. While a common framework would be ideal, this paper instead advocates for a dynamic research process that can be customised for examinations of property rights in different informal settlements, thus contributing to the literature by extending the application of new institutionalism to situations with “incomplete” property rights.