Trust or Property Rights? Can Trusted Relationships Substitute for Costly Land Registration in West African Cities?
The paper studies the market failures associated with land tenure insecurity and information asymmetry in an urban land use model, and analyzes households' responses to mitigate tenure insecurity. When buyers and sellers of land plots can pair...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/200241593532750315/Trust-or-Property-Rights-Can-Trusted-Relationships-Substitute-for-Costly-Land-Registration-in-West-African-Cities http://hdl.handle.net/10986/34025 |
| Summary: | The paper studies the market failures
associated with land tenure insecurity and information
asymmetry in an urban land use model, and analyzes
households' responses to mitigate tenure insecurity.
When buyers and sellers of land plots can pair along trusted
kinship lines whereby deception (the non-disclosure of
competing claims on a land plot to a buyer) is socially
penalized, information asymmetry is attenuated, but overall
participation in the land market is reduced. Alternatively,
when owners can make land plots secure by paying to register
them in a cadaster, both information asymmetry and tenure
insecurity are reduced, but the registration cost limits
land market participation at the periphery of the city. The
paper then compares the overall surpluses under these trust
and registration models and under a hybrid version of the
model that reflects the context of today's West African
cities where both registration and trusted relationships are
simultaneously available to residents. The analysis
highlights the substitutability of trusted relationships to
costly registration and predicts the gradual evolution of
economies towards the socially preferable registration
system if registration costs can be sufficiently reduced. |
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