Many countries in the Americas impose restrictions on Indigenous land transactions to preserve Indigenous ownership, but these policies may inhibit economic growth. This paper evaluates the impact of Chile’s 1993 Indigenous Law, which restricts the transfer, lease, and mortgaging of land in Mapuche territories, limiting transactions to Mapuche buyers. Using property records and transaction data, we find that the law has slowed Mapuche territorial loss, but imposed economic costs as reflected in lower capitalization of urban growth into land values. Moreover, its effectiveness has declined over time, coinciding with a reduction in properties registered in the Public Registry of Indigenous Territories (PRIT), a key enforcement tool. Analysis of property sales following owner deaths shows that listed properties experience smaller reductions in Indigenous ownership, with no evidence that PRIT reduces sales rates relative to unlisted properties. Using remotely sensed data and two complementary identification strategies, we reject meaningfully large impacts of PRIT on land use or productivity. Taken together, the results indicate that economic costs arise from de jure restrictions—even under imperfect enforcement—while strengthening enforcement through PRIT achieves the law’s protective goals without imposing additional economic costs. This suggests a stark policy trade-off: either forego restrictions, or fully enforce them to realize their protective effects.
Research on Europe’s historical academic market earns the European Economic Association’s Hicks–Tinbergen Award.
