Economic Issues in Land Administration

Abstract

Land is of such fundamental importance that the land administration function has tended to be taken for granted. Increasingly, however, there is a debate as to how much money should be allocated to this area and with what priority. A host of concerns have been raised with respect to: 1. documenting the benefits and costs of titling and registration projects; 2. financing the construction and ongoing management of land administration infrastructure; 3. developing appropriate pricing strategies and policies for land administration services and products; and 4. examining the economic issues associated with determining the most effective roles for government and the private sector in the land administration field. Where more fundamental assessment of the role of real property has taken place, two schools of thought have emerged that are not mutually exclusive. The first has been based on traditional arguments for detailed a priori benefit/cost assessments (factoring in both quantifiable and non-quantifiable variables); the second and more recent has argued for minimal initial investment in the infrastructure, leaving it to market forces to dictate subsequent developments. The classic work of Gershon Feder and his World Bank colleagues on assessing the benefits of titling and registration has recently been reported in Feder and Nishio (1998). Feder developed a conceptual framework for the economics of land registration, initially in the context of a study on rural Thailand (Feder et al 1988). Two links between titles and economic performance were highlighted: the enhancement of tenure security and the role of titles in collateral arrangements that would facilitate access to institutional credit. Feder’s conceptual framework for evaluating landownership security and farm productivity is illustrated in Figure 11.1. Using empirical evidence from rural Thailand, Feder and his team compared the economic performance of two groups of farmers: one group was without legal titles and operated in forest reserves while the another group had legal titles and operated outside the forest reserve boundaries. Study sites were selected from four provinces, with the comparative groups operating in geographical proximity and within a similar agrarian and climatic environment.