Leveraging informal institutions to raise land formalisation

Project Active from to State

There are large swathes of land in urban Africa that are allocated low values of built capital, remain unplanned, and are settled under limited property rights. Since the 1999 Land Act, the government in Tanzania is working towards universally titled urban land. Despite this, uptake of titles remains low in many urban areas.

As argued in the literature, aside from moral preferences, establishing property rights has benefits to the government, city, and country as a whole. Functional land markets rely on the transparency of prices in a formalised setting, and records of property owners facilitate taxation. There are private benefits to titling as well, in Tanzania it legally formalises protection from expropriation, use of property as collateral, and transferability.

On the other hand, to acquire a plot title the land must be surveyed first. There are large scale economies to surveying and so costs are minimised when local areas coordinate. The government has engaged in various efforts to achieve this, but with little effect on private demand for titling. In Dar es Salaam this is reflected in only 20-25% of residential surveyed plots having title.

This study focuses on Kimara ward in Dar es Salaam where the Ministry of Lands designed and implemented a pilot project to formalise land under Certificates of Right of Occupancy (CRO). Here only 11% of invoices have been paid after the first three years. Since the government has fronted the fixed cost of surveying and planning in Kimara they have lessened coordination issues, and now plot owners are only faced with the option to buy a title or not. The Ubungo Municipality in cooperation with the Ministry of Lands has set up a special office for the allocation of titles in Kimara to facilitate the process and are committed to getting this neighbourhood titled. This context provides the environment for a unique experiment.

Why are CROs not being taken up? This experiment focuses on the issue of price, which from preliminary interviews with local mtaa leaders in Kimara, seems to be the pertinent problem. It also considers why titling uptake is low even after surveying has been coordinated, and tests whether a particular mechanism could raise the uptake of titles.