Like every Friday, from Raj Nallari and Breda Griffith's lecture notes.

The Role for Government 

Achieving a socially desirable land allocation and utilization requires the intervention of government in establishing land rights. Government is best placed to provide the institutional infrastructure to establish and maintain land rights; and to provide the legal infrastructure to facilitate the transfer and exchange of land rights and to enforce property rights.  World Bank (2003) suggests the following characteristics in determining property rights to land. 

• First, the time frame for property rights to land should be long enough to ensure an adequate return on investment. The potential for investment in urban areas is higher than in rural areas, so the time frame should reflect this. Indefinite property rights are considered the best option but where this is not possible; a renewable contract represents an alternative.

• Second, property rights need to be defined in a way that makes them easy to observe, enforce and exchange. This requires the existence of legitimate institutions.  The relevant institutions need to have social and legal recognition and backing by the state and be accessible by the local population. The disparity between legality and legitimacy is particularly evident in Africa where the majority of the land (90%) is outside the legal system. Socially legitimate land administration institutions can only offer informal mechanisms for enforcement of property rights—the institutions need legal backing.  On the other hand, where land administration institutions have legality and legitimacy but not social legitimacy, they make little difference to the lives of ordinary people and are thus ineffective.

• Third while a group system of property rights may be advantageous at early stages of development, a number of factors such as technical progress and demographic changes suggest that over time we would expect individualization of property rights. This is not an automatic evolution and will be affected by political and economic factors.

Next week: Land Titling and Registration