Land Rights Systems for Shared Prosperity:
on jobs, rents and power
Stefan Dercon
DFID and Oxford University
Property Rights are Good
Acemoglu and Robinson:
Property rights key for
growth, and a feature of
inclusive institutions.
Acemoglu/Johnson (JPE,
2005). “Property rights
institutions that protect
citizens against
expropriation and powerful
elites …first order
importance for long-run
growth”
Property Rights are Good
David Cameron
•“Golden Thread of
Development – the
economic, political and
institutional building
blocks for
development”
Property rights one of
the essential features
DFID Result
Framework for
current 5 year
period
“Number of people
supported through
DFID to improve
their rights to land
and property --6 million “
High Level Panel
“to increase by x% the
share of women and
men, communities, and
businesses with secure
rights to land, property,
and other assets”
Property Rights are Good
• What is it about them?
– Efficiency (incentivises effort and investment)
– Equity reasons – “right/power”, including the poor
and for women
• Leading to Interventions:
– To ensure rights are given and protected, including
for women or other marginalised groups
– That are presumed to lead to growth and shared
prosperity
Are we asking the right questions?
Land titling programmes have an opportunity cost, so are we
giving enough thought about:
• Can we do it? Do we have the institutional conditions that
will allow land rights programmes to lead to equitable,
efficient outcomes?
• How to handle property rights so that are right for growth?
Good for job creation? Good for structural transformation?
What land system is required for job creation?
• Can we do within the state capacities we have? Do we
create new opportunities for rent-seeking behaviour?
Feeding into the key questions:
• Are we building sustainable, transparent land
systems that support growth, jobs creation,
poverty reduction and equal opportunities?
• Are we learning-while-doing whether they
actually work – deliver what they claim to
deliver?
• Or are we creating …
Big questions, partial answers
• Can we design programmes that lead to equitable
outcomes? A story from urban Tanzania:
– a nudge to gender equality in land titles;
– but is female empowerment a fantasy?
• Are property rights going to lead to shared prosperity
through growth and jobs?
– A cautionary tale from Ethiopia (with surprising facts)
– and nods to Singur (West-Bengal), historical France and England
• Are land titling systems fit for purpose?
– The ambitious protective land laws offering land rights including
to the poor in Dar es Salaam, Tanzania
– and the sobering tale of the 12 steps to land titles that cost of
fortune to follow, if ever with success and with few lasting
effects....
Not just stories
• Results based on studies using RCT (Tanzania) and
discontinuity design (Ethiopia)
– Daniel Ayalew Ali, Matthew Collin, Klaus Deininger, Stefan
Dercon, Justin Sandefur and Andrew Zeitlin (2014), “The Price of
Empowerment: Experimental Evidence on Land Titling in
Tanzania”, mimeo
– Matthew Collin, Stefan Dercon, Hunter Nielson, Justin Sandefur,
Andrew Zeitlin, (2014), “The practical and institutional hurdles
to obtaining land titles in urban Tanzania”, IGC issues paper.
– C. Anthony Harris, “Forced to sell the farm: Effects of
expropriation and compensation programs on small-scale
farmers in Ethiopia”
URB-03: EXPROPRIATION March 24, 15:00, MC 2-800
1. The price of empowerment
Tanzania 1999 Land Act:
• Direct influence of Hernando de Soto
• Expanded scope for ownership in urban, unplanned settlements
• Two types of titles: Residential License (RL) and Certificate of
Right of Occupancy (CRO)
– RL is short term (5 year) lease on land, renewable, non-transferable, no
collateral value
– CRO is long term (99 year) leasehold, transferable, can be used as
collateral, perceived as more secure
• But by now: less than 3% of households living in unplanned
settlements have obtained CROs
Female Inclusion in Land?
• In principle:
– Land act has several provisions to protect women
– (default is female co-ownership, and spouse need to have each others
permission)
• In practice:
– only 45% of men report that their wives will be consulted in selling
even if they have CROs,
– in general, less than quarter of RLs have female name on it.
• Research programme:
1. What drives general low uptake of CROs?
2. Can we induce greater legal protections for female
household members?
3. (in due course) What is the impact of CROs and female
inclusion in CROs?
Design: RCT
Urban Dar es Salaam
2 neighboring sub-wards (mitaa), roughly 1,000 parcels each
Focus on one today: Mburahati Barafu
The study area
2 neighboring sub-wards (mitaa), roughly 1,000 parcels each
Focus on one today: Mburahati Barafu
Intervention (surveying plus repayment
programme) randomised to blocks
50 `blocks' of roughly 40 parcels each
Randomly assigned to treatment or control group
Treatment: cadastral surveying and repayment program
Intervention: price variation
Parcel-level randomization of prices:
Baseline price of C.R.O. post-cadastral survey is TSh 100,000 (< $50)
Unconditional vouchers
Some vouchers are `general' and act as immediate
discounts.
Conditional discounts – gender conditions
Some vouchers are conditional, and only apply if HH includes a woman
as an owner on CRO application
Variation in conditional and
unconditional vouchers
Some get general, some conditional and some both vouchers of
various values…
Leading to price variation
Subsequently correlated with uptake
We find high sensitivity to price
But do gender conditions matter?
Resulting into many more women
registered on titles through conditions
Figure shows estimates of co-titling (probability of
woman to be included on actual title when application is
submitted)
We find that co-titling rate shoots up from about half to
close to 100% when conditional voucher is received
instead of general voucher.
But gender conditions don’t come at a
cost in terms of uptake.
• Estimated takeup impacts of 0.379% and 0.377% per
TShs 1,000 of conditional and unconditional discount.
• They are statistically indistinguishable.
Conclusion 1: land rights for the poor?
Can we design programmes that lead
to uptake of titles for the poor?
YES WE CAN – up to a point
poor people are willing to pay for it, but make
sure it is not too much
Conclusion 1b: land rights for women?
YES WE CAN - WE ARE IN “SILVER BULLET” LAND:
Gender conditions have no cost in terms of uptake for a
given price – so simple nudges have huge impact on
female empowerment in land titling programmes.
But let’s be cautious
does it mean anything for women to have their name on
the title?
Do we have the institutional conditions that will allow
land rights programmes to lead to equitable, efficient
outcomes?
(to be continued)
2. Are land rights good for jobs?
Jobs will come from industrialisation and
urbanisation
Are we setting up land systems supporting
structural transformation?
Some lessons from history…
• The economists’ view… Industrialisation could take off
thanks to property rights (Acemoglu and Robinson) and
happened in UK thanks to Glorious Revolution of 1688.
• But… property rights by then at least as secure in
France or even in China by then (Allen, 2009).
– In France probably too secure: e.g no profitable irrigation
or canals in Provence as no way of overriding private
property rights;
– In England, parliament could override private rights.
• A key part of development is ability to ensure land can
be used for higher productivity use and for public
infrastructure.
• A transparent system of protecting and at times
overriding private rights for the public good. (Eminent
domain, compulsory purchase, expropriation systems).
What (not) to learn from India
• Singur (West-Bengal)
– 400 ha agricultural land taken in 2006 to be offered to Tata for
the production of the Nano car
– Forcible acquisition under an old (British colonial) law –
compensation paid
– Protest and violence, and international news coverage, and
huge political fall-out
– Interpretation of law rejected by courts
– Tata Motors left in 2008
– New law very bureaucratic and slow? Not solving bad land
records
Discussion March 26: RES-21 8:30
• Papers by Dilip Mookherjee and co-authors
-Inadequate or inappropriate compensation/poor valuation
• Comments on new law Naresh Saxena (new law anti-farmer and antigrowth)
Solving this, Ethiopia style
• Bidding to attract industries
• Land systems more like China than Africa…
– All land belongs to the state
– Constitutional user rights (with commensurate
land registration programmes)
– But government can take away with clear
compensation rules – also for economic purposes
Ethiopia’s non-Singur
• 300 ha agricultural land, near Kombolcha
taken away to give way to Steel Plant, 2013
• Land taken away according to law, with
compensation 10 years land productivity
• (not quite headline news…)
C. Anthony Harris, “Forced to sell the farm: Effects of
expropriation and compensation programs on small-scale
farmers in Ethiopia” URB-03: EXPROPRIATION March 24, 15:00, MC 2800
Study Area: Kombalcha
Survey well before land was taken away, and
afterwards.
Red=treatment; green=control
Impact of expropriation
• On average:
– households affected lost 50% of their land
– received 100,000 Birr (the equivalent of 5,200
USD).
• Compensation received equivalent of
– USD 8,000 for unirrigated land
– USD 16,000 for irrigated land
(compared to USD 25,000-36,000/ha in stated policy
Singur)
• Our data suggest in line with regulations and
principles (10 years productivity of land)
Impact of expropriation
Compared to those who did not in diff-in-diff
setting (note: average compensation=100,000 birr)
◮ ...increased savings by 58,000 Birr
◮ ...increased value of home by 9,000 Birr
◮ ...increased consumption by 6,200 Birr (possibly
spent more than that to compensate for income
loss)
◮ ...increased non-agricultural assets by 6,200 Birr
◮ ...do not change the value of livestock holdings
◮ ...increased non-farm activity
Are they worse off?
Those who lost land
• have consumption higher than control group (6,200
birr per annum more despite income loss)
• have less trust in local officials
• are indifferent in Cantril’s ladder of life (“overall, how
satisfied are you with your life”, using 10-steps)
• And expect to be better off than control group in five
years from now (subjective poverty scale)
• But not clear where earnings will come from in data
(high liquid savings, consumption but limited off-farm
or other investment)
Conclusion 2: land rights for jobs?
• Countries need to have a transparent, fair system to
transfer land from one use to another, including where
the market may suffer from hold-up problems
– For public purposes…
– For industrialisation and job creation?
• Handing out individual land rights can protect the poor,
but it should not be fundamental hindrance of
essential structural transformation, required for
poverty reduction
– Systems will have to be nested in local institutional and
legal contexts.
– Important efficiency and equity trade-offs that must be
confronted, and researched.
3. Are land right systems fit for purpose?
• Providing and enforcing land rights potentially
bureaucratically intensive process
– E.g new land law in India: may now take years to get
rights as well as to conclude ‘expropriate’ from
farmers, leaving all in limbo
• In countries where much work is needed on land
titling, are we setting up functional real
institutions – or just systems not fit for purpose?
Matthew Collin, Stefan Dercon, Hunter Nielson, Justin Sandefur,
Andrew Zeitlin, (2014), “The practical and institutional hurdles to
obtaining land titles in urban Tanzania”, IGC issues paper.
Experience with CROs in Tanzania
• After 15 years, only 3% of households in
urban unplanned settlements with titles
• At least 12 distinct steps – each with risks of
hold-up, cost escalation, corruption, and
confusion and with considerable tax
uncertainty
• Even in our RCT, started in 2010 – we are still
trying to ensure those who paid are getting
the CRO…
The sobering 12 steps to a title
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•
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Step 1: Hire a Surveyor
Step 2: Surveyor Prepares a Base Map
Step 3: Submitting the Base Map to Municipality
Step 4: Submitting the Base Map to Ministry
Step 5: Completing the Cadastral Survey & Placing
Beacons
Step 6: Approval of Survey by Municipality/Ministry
Step 7 Receipt of Unique Plot Number
Step 8: Completion of CRO Forms and Creation of Deed
Plan (five forms and a proof of payment)
Step 9: Deed Plans/CRO forms Submitted to Municipality
Step 10: Deed Plans/CRO Forms to Ministry
Step 11: CRO Approved for Collection
Step 12: collect the CRO
Cost?
• Cost prohibitive, not just in time
– Official route (without ‘extras’) $23 for plot of 20m
by 20m (400 sq metres)
– In practice, private route required costing up to
$712, before back payments of tax and ‘extras’.
• “A system fit for bureaucrats and rent-seekers,
and not for poor people?”
• People are willing to pay for title – but at a
reasonable rate for the poor
Conclusions
• Our examples showed:
– That we can easily nudge men to ensure women get
onto titles – but can we be confident that this means
real empowerment?
– That protecting land rights is surely good – but do we
get systems that are fit for a dynamic economy and
that will promote jobs and structural transformation?
– That it is easy to get top-heavy bureaucratic systems
with much rents but no impact for the poor
• They have in common: a deep understanding of
the local institutions – norms, rules, legal system,
bureaucratic culture – will be required to be
successful
Conclusions (2)
• We tend to build land rights systems as they work in
other countries or in imagined histories.
• But do we think enough about whether they will work in
a particular setting, contributing to solving the problems
of growth, poverty reduction, structural transformation
and exclusion?
• Isomorphic mimicry
– Just like tropical frogs that just look like
poisonous frogs, we build institutions
(including land rights systems) that
just look like effective institutions, but
are they?
Conclusions (3)
• Land rights systems need ‘to work’
– Contribute to growth and poverty reduction
– Contribute to efficient and equitable outcomes; protect
and promote development
– They function within institutional settings
• Norms and practices on exclusion, e.g. by gender
• Legal and other institutional settings
• Bureaucratic cultures and capacities
• At times, our programmes risk trying to build
institutions, without impact, wrong for particular
settings
• We need good land governance systems with strong
institutional assessments and transparent monitoring
of rights and, when it happens, of expropriation.
How to guard ourselves?
• Diagnose: Are land rights and the way we offer them a real
solution for the problem one tries to solve? Also in the long
run?
• Monitor: Does the programme “work” (i.e. achieve
outcomes and change) as one thought it would in this
context? Build up a real evidence base…
• Evaluate: Learn from success and failure, openly and
transparently – with strong evidence.
• And dare to ask, all the time:
Is this just a fad? A white elephant? A great new rent-seeking
opportunity for some? Is this just superficial change? Top heavy,
bureaucratic? Is this really contributing to structural
transformation? To Jobs? To poverty reduction? To inclusion?