BJORN LOMBORG: Security of land ownership will drive development
Evidence suggests the benefits from more land security, through higher agricultural productivity, would lift household incomes by almost $400bn
Most people in the developed world don’t have to worry about losing the right to live where they do. If you have a deed or a rental contract it is unlikely that someone is going to turn up tomorrow with their own paperwork and kick you out.
This security means owners who build a new kitchen know they can enjoy it for decades, or if they sell, it will increase the value of their property. Farmers can plant trees that take years to mature, knowing they won’t be kicked off the land by the time they bear fruit.
Imagine if you weren’t sure if you really owned your house. Maybe you could keep living here next year. Maybe someone would boot you out. Not only would you be psychologically worse off, but you would also be far less likely to invest in making your home or land better.
Yet for the majority of people in developing countries secure property rights are a rare luxury. Globally, 70% of the world’s population has no access to formal land registration systems. One-in-five, or almost 1-billion people, consider it likely or highly likely they will be evicted in the next five years. In SA 27% consider themselves insecure even in their main property.
Getting more land security is one of the many goals world leaders signed up to achieve by 2030, when they set the Sustainable Development Goals (SDGs) in 2015. This year we will be at halftime for these global goals, but we are nowhere near halfway to completion. Despite many development organisations focusing on achieving better land tenure, progress has been negligible, with some countries reporting no progress at all.
My think-tank has worked with some of the world’s best economists to identify the most effective ways we can speed up delivery of the SDGs. In a just-published research paper, the former lead land specialist at the World Bank, Dr Frank Byamugisha, and his colleagues show that developing better land registration systems would deliver amazing benefits.
The researchers focused on Sub-Saharan Africa because it has the lowest proportion of land that has been officially mapped and categorised by governments: at just 14%, Sub-Saharan Africa has the weakest land property rights and highest levels of disputes. The continent also has by far the most adults insecure in property tenure, along with the highest cost of registering land in the world.
Path-breaking countries like Rwanda have shown how it is possible to register land, digitise the information, and provide legal mediation to resolve inevitable land disputes. Nonetheless, achieving greater rural land security in Africa will take enormous effort, because 86% of all the continent’s rural land plots are still unregistered. The total cost for the continent will run to about $21.7bn.
However, the benefits would be far larger still. When farmers know they own their land they are more willing to make expensive investments to increase long-term productivity. They can also use their land deed as collateral to borrow money for investments like farm equipment or property expansion.
Unfortunately, there is relatively little direct evidence from Africa on what the effect would be on productivity. This means the researchers have to use evidence from the rest of the world, which leaves the effect less certain. Nonetheless, the evidence suggests the benefits from more land security, through higher agricultural productivity, would increase household incomes by almost $400bn. Spending $21.7bn to deliver almost $400bn in benefits is a very good investment, achieving $18 of social benefits for each dollar spent.
The case for increasing land tenure security is even stronger for the almost 500-million people living in Sub-Saharan Africa’s urban areas. More than a third of all urban land parcels are unregistered, and it would cost a far smaller $5.2bn to survey and register this land, including the land in slums, along with setting up dispute resolution and running the system.
Moreover, the benefits of tenure in urban areas are better documented: homes with secure registration are on average worth 25% more. This is not surprising: a house is worth more simply because the owner now has the financial and psychological security of knowing they own it. The researchers show the total benefits of providing more secure urban tenure would therefore be about $160bn — 30 times the costs.
Currently, the world is failing to deliver on many of the most important promises of the SDGs, in part because this agenda set out to do everything at once. Instead, we need to prioritise the smart solutions first. Being wildly off-track on our global promises can seem unsettling, but it can also be an energising wake-up moment. We urgently need to focus on investing in the very best solutions.
Improving urban tenure security, which at low costs would make hundreds of millions of people better off, is one such investment. It is only rarely that the world is offered an opportunity that delivers up to $30 of social benefits for each dollar invested. We should take it.
• Dr Lomborg is president of the Copenhagen Consensus Center and visiting fellow at Stanford University’s Hoover Institution. His new book ‘Best Things First’ is available for pre-order. This article is part of a series on what the world needs to do to achieve the UN Sustainable Development Goals.