World Bank study on Good governance in land administration

1. World Bank study on Good governance in land administration ILC workshop on Land Indicators Rome, Dec. 8, 2008 Klaus Deininger & Malcolm Childress

2. Motivation • Land offers enormous potential for large scale corruption • Large scale land-grabs, public-land concessions to cronies (Kenya) • Land conversion and zoning provides windfall gains with urbanization • Particularly relevant with high levels of commodity prices • … but is also a source of petty corruption in service delivery • High land taxes encourage undervaluation and under-the table payments • ‘Speed money’ to get register transactions or get certificate for credit • Together with rent-seeking by judiciary • Example India: Land sector 3rd in TIs corruption ranking, after police & courts • Estimated bribe payments (by the poor) > $ 700 mn a year • This reduces economic activity and hurts the poor • ‘Serious” investors can not get access to land • Land transactions are not registered, financial sector development impaired • Negative spillovers way beyond the land sector

3. But there is considerable potential • Technology can make processes more transparent • Remote sensing makes data acquisition much easier • IT can improve access to information & conduct of transactions • Allows monitoring of progress by users (case tracking, e-governance) • Example: Land record computerization in Maharashtra • Increased incentives for governments • Registries can generate high levels of resources • Land information critical for natural resource & disaster management • Including avoided deforestation & carbon payment • Cross-country effects of publicity of information • Land information in World Bank’s ‘Doing Business’ indicators • Incentive for reform in a number of cases • Coordination among donors • What is needed to utilize the potential? • Political commitment at country, regional and global level (FAO, AU, etc.) • Agreed methodology to assess land governance at country level (WB)

4. Methodology: Building on PEFA • Public Expenditure & Financial Accountability framework • Aim: Comprehensive overview integrating multitude of studies & approaches • Coordinated among donors (EU, IMF, bilaterals, with WB as secretariat) • Goals: Country ownership, donor harmonization, progress monitoring, impact • Basis for policy dialogue & policy-based support • Reports (based on joint missions) for >40 countries since 2006: www.pefa.org • How can we adapt this to land administration? • Establish 5 broad areas, 22 indicators, some 80 dimensions of good governance • Each dimension is scored from A to D, ideally based on quantitative information • Comparing scores across countries: Identify areas for immediate policy attention • Assessments can be repeated at 2-3 year intervals to assess progress • Results to feed into existing mechanisms (country policy, APRM, assistance strategies) • 3 advantages: Highlight land issues, allow better coordination, cross-country comparison • What are the 5 broad areas? • Legal & institutional framework • Land use planning, management, and taxation • Acquisition, management, and disposal of public land • Public provision of land infomration • Dispute resolution & conflict management

5. Legal and institutional framework I • A continuum of rights is legally recognized • Main types of existing (customary & individual) tenure regimes recognized • Group rights & procedures for groups’ legal representation/management exit • Transition to more individualized tenures possible with proper safeguards • Land rights can actually be enforced • Boundaries to communal land are surveyed & associated claims registered • Majority of individual properties are formally registered • Tribal/indigenous rights are demarcated • Definition of rights is (or can be made at low cost) consistent with practice • Non documentary evidence can be used to establish property claims • Adverse possession exists • Upgrading of tenure is not restricted by ability to pay • Rights, obligations, and enforcement mechanisms understood by affected • Individuals concerned are aware of content of rights and ways to transfer them • Land owners know how their obligations limit unfettered exercise of rights & who can legitimately impose such restrictions • Ways of resolving conflicts and enforcing rights are known to the population • Restrictions on rights do not drive large shares into informality • Stamp duties (or other transfer taxes) are low compared to land values • Restrictions on ownership or transfers (ceilings, proper use clauses, minimum sizes) do not affect majority of population and drive them into informality

6. Legal and institutional framework II • Institutional mandates are clear, non-overlapping, info is shared • Geographic distinction (rural, urban, environment) • Ways to shift between geographic domains are well regulated • Administrative distinction (different levels of government) • Information maintained uniformly across domains, facilitates information-sharing • Policies formulated via legitimate & inclusive decision-making • Land policy statement, drawing on wide input, exists • Mechanisms for regular reporting are in place • Processes for making policy decisions ensure input/participation by those affected • Principles of equity, non-discrimination accounted & monitored • Policy explicitly incorporates equity goals • Specific policies to enhance equity implemented in a non-discriminatory way with regular performance reviews & audits of responsible institutions • Share of land registered in name of females is close to 50% • Gender aspects of land rights are monitored

7. Land use planning, management, taxation • Land use regulations ensure cost-effective public goods • Responsibility for imposing restrictions at appropriate level • Zoning for industrial development linked to development conditions • Rate of urban land delivery in line with urban population growth • Building standards are adhered to • Plot size standards are adhered to • Information to enforce land use regulations is available • Appropriate land use plans available for majority of country • Share of residential areas with updated land use plans is high • Share of forest land used for non-forest purposes is low • Majority of residential land has access to basic services • Changes in zoning made transparently & participatory • Requirement of public approval for changes in land use plans • Mechanisms for public capture of most of gains from rezoning

8. Land use planning, management, taxation • Existing land use restrictions are enforced • Separation of powers between land owners, authorities imposing, and those enforcing restrictions • Development conditions enforced uniformly & transparently • Restricted land use permits granted promptly, predictably • Building permits are granted expeditiously • There is little discretion on whether or not a building permit will be granted • Tax valuations are public, clear, applied uniformly, updated • Valuation rolls available publicly • Up to date receipts to prevent erosion of tax receipts • Amount of property tax collected above cost of collection • Amount collected close to potential • Significant share of property tax revenues to local bodies

9. Public land management, acquisition, disposal • A geographic inventory of state owned land is available • Inventory exists and is publicly available • Accounts of entities holding public land are subject to scrutiny • Significant share of benefits from exploiting public lands to low levels • Expropriation only for public good, fair, transparent • Expropriation only for public good • Little land transferred to private investors (direct negotiation) • Most expropriated land transferred to destined use within 2 years • Land owners receive compensation within one year • Compensation is comparable to market values • Independent avenues for complaints against expropriation exist • Transfers of ownership or use rights follow clear process • Most state land is transferred through auction or open tender • Lease payments are similar to what could be received in private market • Lease payments are actually collected

10. Public provision of land information • Land registry geographically complete • Completeness of the land registry in recording private rights • Completeness of mapping base for registered rights • Registry contains information on all economically relevant encumbrances • Info can be searched by parcel and holder & accessed free by all parties • Registry information sufficient for inferences on ownership • Registry information is up to date • Registry info allows reliable inference on ownership • Customer service standards established and adhered to throughout the system • Mechanisms to ensure compliance with service standards available • Cost-effectiveness of land registries • Total cost of running the registry (per parcel or transaction) is justifiable in terms of benefits provided • User fee for registering different interests is in line with cost • Financial sustainability and transparency • Majority of running cost of registry recovered from user fees • Clear schedule of fees exists & is publicly available • Receipts are issued for all transactions • Side payments are actively discouraged

11. Dispute resolution & conflict management • Responsibility for conflict resolution is clearly assigned • Institutions to resolve conflict accessible at low cost for majority of population • Judges in formal & informal sector are well informed about law & procedures • Work load is manageable & incentive structure appropriate • Conflicts enter the formal system only if informal mediation has failed • Possibility of appeal • Forum shopping and parallelism are actively discouraged • Rulings on land disputes can be appealed against • Level of unresolved conflict is low and not systematic • Most of the conflicts entering the formal system resolved within one year • Few conflicts older than 5 years • Long standing conflicts dealt with by policy changes & special measures • No concentration of conflicts with specific social groups or regions

12. Example LGI-2. Enforcement of rights: The rights recognized by law are actually enforced

13. How to collect this information? • Panels (7) of experts & civil society • Provide written background information & ranks for relevant dimensions • Identify/validate typologies of situations & frame for sampling (exprop.) • Agree on joint consensus ranking & identify areas where more info needed • Quantitative sampling of specific cases/processes • Court cases at various levels: Share land-related, typology, duration, …. • Expropriations & dispositions of public land • Area sample (0.5 km2 blocks) of plots for registry coverage/actualization & associated household sample for legal knowledge • Registry user survey (based on classification of users) • Goal is to establish & demonstrate methodology only • Finalization of reports & methodology • Assess robustness/variance of rankings within & across countries • Usefulness as an input into policy dialogue & strategy formulation • Modalities for up-scaling with partners (AU, country departments, etc.) • Scope for deriving a handful of quantitative cross-country indicators

14. Where we stand and what next? • Pilot application in 5 ctries to validate concept (done) • Kyrgiz Rep., Indonesia, Tanzania, Burkina, Peru • Country coordinators completed rankings (5 days/country) • High value to identify areas for policy change & assess broad picture • Very positive reception in the Bank (esp. governance) • Conduct of country-level panels (end 2008) • Assess robustness of indicators & rankings • Compare across the pilot countries & refine methodology • Identify sampling strategies & questionnaires in each country • Sampling (March/April 2009) & conclusion of study • Assess variation between experts’ prediction & reality • Use as a basis for policy dialogue in pilot countries • Refine & streamline methodology, issue overall report • Discuss with partners how to use it most effectively in light of results

15. How can this feed into indicators? • Interest in a roll-out a la PEFA • Agreement on methodology by partners; WB as Secretariat • Joint missions & reports in 10-15 countries per year feasible? • Build up of joint knowledge base to engage in policy dialogue • Political economy case studies for ‘best practice’ in policy reform • Exploring options for funding of these • Will be extremely useful for policy • The topic is of critical importance & political commitment generated • Can provide basis to greatly expand policy dialogue & lending • & help to harmonize approaches among all partners • Use admin. data for comparable indicators • Will be reliable, country-owned, actionable, include equity • Need to ensure political action to improve these • Lobbying by civil society essential to ensure this