Module 10 - Investments in Systematic Land Titling and Registration

The security, duration, and enforceability of property rights have major impacts on land investment incentives, land market operations, and the development and functioning of financial markets. In situations characterized by high land values, conflict over land, and increasing population densities, formalized property rights systems that confer stronger and more secure land tenure have important economic and social benefits. Systematic titling and registration offers equity and cost advantages when implemented under supportive policy, legal, and institutional frameworks.

Land tenure insecurity, exacerbated by population pressure, escalates conflict over land use, inhibits land transactions, and discourages investment in farming, industry, housing, and the physical infrastructure necessary to support economic growth. Property rights within a land administration framework increase land tenure security. The main mechanisms for formalizing property rights are land registries and title documents. These provide protection against challenges to individual rights and facilitate the transfer of rights and the development of secondary financial instruments, such as mortgages.

Titling and Registration

The Bank has accumulated broad expertise on land administration investments, which have focused mainly on formalizing land rights through systematic or sporadic registration. Systematic registration identifies, adjudicates, and registers rights to all adjacent land parcels in a selected locality and within a given period. Sporadic registration processes land rights on an ad hoc basis, usually when customers request registration of their parcels of land. The Bank favors the systematic approach because of the equity and cost benefits as well as the positive externalities arising from a complete registry. Most projects embed land titling in a national land policy framework.

The two main instruments of a land titling and registration program are the land registry and the cadastre. The registry provides authoritative information on all properties within a jurisdiction. The cadastre provides information on boundaries, use, and value of properties and is used as a basis for land use planning, valuation, taxation, and the generation of maps. Support to systematic titling has been more successful than activities aimed at building sustainable land registration agencies. Greater attention must be given in future land investment projects to strategies and pilot operations that will enable the establishment of sustainable land registries.

Benefits

Land titling programs can create secure, clearly defined, and easily transferable land ownership rights, which ensure benefits to recipients/owners and improve incentives for long-term investment. Case studies from China, Thailand, Vietnam, Honduras, and Paraguay demonstrate the positive impacts of land titling on investment and agricultural productivity (see box 10.11 for an example from Thailand). In contrast, studies from Africa show little relationship between land titling and productivity, largely because of the existence of well-developed indigenous land rights, the lower level of agricultural intensification, and the lack of formal credit markets.