by Shaun Williams
Shaun Williams is Land and Natural Resources Governance Adviser to the Justice for the Poor program of the World Bank.
In many emergent states, where significant proportions of property in de-colonized national territory is still held customarily, reform questions around immovable property and development often tend to be focused on rights issues within customary estates. However in these newer nations, state-owned land commonly includes the most economically valuable land, including significant areas of urban land, on which development pressure is high. This land was commonly first expropriated out of customary estates by colonial powers and then subsequently acquired by post independence states as part of a liberation ‘dividend’.
Most departing imperial powers evaded responsibility for restitution of colonial era dispossessions, as subsequently have post independent states, thereby protracting a significant source of much civil discontent. Many new states have also been unable to overhaul the arcane land administration institutions they inherited, which were designed to service the land needs of long gone, colonial era, church and trading elites, thereby frustrating the configuration of the new elite coalitions of local entrepreneurs needed to accommodate the rapid urbanization they are all experiencing (UN-HABITAT has estimated that 30% of all Solomon Islanders and almost 40% of Vanuatu’ and Timor-Leste’ populations will be living in cities by 2030). As the legitimization, adjudication and enforcement of property rights is a core function of nation states, these failures in turn undermine wider state building projects.
More important perhaps, throughout the developing world poor governance of state land negatively impacts the poor materially. Mismanagement of state land results in loss of significant amounts of economic rent (because of the high value of state land) that could otherwise be spent on the public services or invested in the infrastructure upon which the poor depend. These foregone rents are frequently being captured by the patrons of sometimes corrupt administrators operating within highly discretionary and otherwise dysfunctional regulatory frameworks.
Indifferent management of state land clogs up land markets, notably urban immovable property markets where demand is high and supply is tight. Poorly managed disposal of state property is equally unlikely to produce better outcomes. Warehousing by speculators of leases and concessions of state owned land, frequently acquired through opaque and uncompetitive allocations, further restricts supply, particularly of urban land, thereby inflating urban land prices and directly contributing to the unaffordability of city housing for both the poor families and low- to middle-income earners.
Recent evidence from Solomon Islands suggests that a reform focus on the governance of state land holdings, even if relatively small in area, can yield outsized benefits. In Solomon Islands, as much as 10 percent of GDP may be affected by how effectively urban state (referred to in the relevant Solomon Islands legislation as ‘public’) land is governed and the World Bank’s Justice for the Poor program, UN-HABITAT, and other partners are working to catalyze interagency coordination to move towards improve urban state land governance.