Creating property rights: Land banks in Ghana

Abstract

Insecure property rights over land have multiple ramifications for agriculture and the organization of rural economic activity (Besley and Ghatak 2009). Theriskthatlandwillbeexpropriateddetersinvestment. Insecure property rights reduce the ability of borrowers to pledge land as collateral and thus tighten credit constraints. Ill-defined property right over land can inhibit land transactions – rentals or sales – and potential gains from trade are lost. Scarce resources, like labor, may be devoted to protecting one’s insecure rights over plots (Field 2007). In Ghana, land rights are typically gained by virtue of membership in a corporate group (e.g., extended family), but a robust market is emerging for land purchases and rentals, particularly in urban and periurban areas. Informal land markets in Ghana are beset with a number of problems including land conflicts, protracted litigation and adjudication failures, documentation bottlenecks and uncertainty. Land legislation in Ghana is perceived as incoherent, conflicting and often outdated. An unwieldy public land sector dominates the documentation of land rights, revenue collection and distribution. Land conflicts are becoming more frequent, judicial processes are overburdened, authority is overcentralized and corrupt. Conflict over multiple claims to particular plots occasionally becomes violent. Goldstein and Udry (2008) document the large investment disincentive effects of insecure tenure in agriculture in Ghana. Almost 80 % of the Ghana’s land is held by customary landowners, mainly families, clans and traditional authorities (Kasanga and Kotey, 2001). These owners often do not record transactions; indeed, many are clothed in secrecy. As land transactions gradually move away from their familial/corporate base to short term rental for commercial purposes, multiple simultaneous transactions on the same plot have become