The Effects of Land Registration on Financial Development and Economic Growth: A Theoretical and Conceptual Framework

Abstract:     
A theoretical framework to guide empirical analysis of how land registration affects financial development and economic growth.

The author develops a theoretical framework to guide empirical analysis of how land registration affects financial development and economic growth.

Most conceptual approaches investigate the effects of land registration on only one sector, nut land registration is commonly observed to affect not only other sectors but the economy as a whole.

The author builds on the well-tested link between secure land ownership and farm productivity, adding to the framework theory about positive information and transaction costs. To map the relationship between land registration and financial development and economic growth, the framework links:

-Land tenure security and investment incentives.

-Land title, collateral, and credit.

-Land markets, transactions, and efficiency.

-Labor mobility and efficiency.

-Land liquidity, deposit mobilization, and investment.

Empirical results from applying the framework to a single case study - of Thailand, described in a separate paper - suggest that the framework is sound.

This paper - a product of the Rural Development and Natural Resources Sector Unit, East Asia and Pacific Region - is part of a larger effort in the region to increase the effectiveness of country assistance strategies in the area of property rights and economic development.

Working Paper Series