Institutional Formation in Transitional Settings

How do formalized property rights develop in transitional settings where there is an absence of formal state structures? This paper hypothesizes that, in the presence of capital for investment, a non-state hegemon with long time horizons can intervene to formalize property rights. The hypothesis is tested using 191 surveys and interviews collected in Nahr al Bared (NBC) and Beddawi refugee camps in Lebanon. Results suggest that following an influx of remittances, Fatah formalized property rights through the creation of local camp committee offices that served as a third-party enforcement mechanism. Also, the results uncover an alternative political motivation for property right formalization. In transitional settings, formalized property rights serve critical state-building functions by uniting and galvanizing a community around a new political party.