Concept Note

This round of the symposium will feature presentations of 5 commissioned survey papers on topics (see Clusters below) that have relevance for Bank operations in Urban Development. These papers serve three objectives:

(1) to clarify ongoing debates on the links between various aspects of urban land management and welfare by providing a robust analytic foundation to existing findings or supporting/ questioning existing analytic work with empirical applications / case studies;

(2) to examine the implications of commonly used urban land and related policies when conventional wisdom is scrutinized using a common methodological framework;

(3) to highlight priority policy and program design/ implementation questions which cannot be answered due to limited research and data, and propose a research agenda that sets out to address these questions.

In addition to these commissioned papers, the Bank hereby invites researchers working on land related issues to contribute papers especially those with empirical evidence relevant to any of the research clusters outlined below.

The Emerging Research Clusters

Cluster 1: The implications of various land market distortions on urban welfare/quality of life, particularly for the poor; and consequences of these distortions on the efficacy of Bank/government interventions.

Access to serviced land for housing is one of the major problems faced by practically all developing country cities, as they suffer from inelastic land and housing supply. While there is some evidence supporting housing supply inelasticity and its relationship with the regulatory environment, there is a need to look at this issue systematically across countries and to measure these effects. It is often argued that government interventions formulated to improve the efficiency of the land market have often themselves become constraints posing as bottlenecks.

This cluster would address various constraints in the delivery of serviced land for housing development, such as the lack of main infrastructure; inefficient and heavily bureaucratic administration; lack of coordination among implementation agencies for provision of infrastructure and services; rigid planning regulations and controls, which retard the delivery of land for residential development through delays in the planning process; and lengthy reviews for conversion of land from agricultural to urban use. It would include research on the effects of land (and housing) supply constraints (and related regulations) on slum formation/ informal settlement growth.

Examples of questions to be addressed include:

• What are the major constraints affecting the efficiency of the formal land and housing market and land delivery?

• What is the consequence of an inappropriate, excessively detailed and inflexible regulatory and legal framework on the smooth supply of the land in the formal housing market, development of the private housing sector, and welfare of the poor?

• By how much are benefits from slum upgrading and titling programs reduced due to market and regulatory distortions?

Cluster 2: The implications of the continuum of property claims/rights and associated formalization strategies that exist in developing country cities and access to credit, municipal infrastructure and public services.

North (1990) emphasized that “the inability of societies to develop effective, low-cost enforcement of contracts is the most important source of both historical stagnation and contemporary underdevelopment in the Third World.” When the economy suffers from the weak rule of law and the lack of social and legal institutions which support land and real estate transactions, as in Africa, Latin America, South Asia, and Indonesia, an urgent urban land issue is to establish institutions (rule of law) which facilitate economic transactions and lower transaction costs.

In this respect, lack of secure property rights to land has been spotlighted as a key explanation of the failure of free markets in developing countries. Land titling, as a basis for enforcing private contracts between city residents and private service providers, can facilitate the private sector’s participation. Considering the growing importance of the private sector and access to finance in urban development, this long-term benefit needs to be taken into account. Titling may also have positive effects of increasing fiscal control of local governments. However, at the same time there are growing concerns from researchers and practitioners that land titling is usually expensive, complex, and slow to implement, and that there is no unequivocal link between titling, investment and access to credit. Policymakers are investigating alternative tenure forms, including community based institutions, which they hope will make ownership of land more affordable and sustainable for the urban poor.

Examples of questions to be addressed include:

• What alternative tenure forms have been proposed and experimented in various urban conditions and institutional backdrops?

• How have these alternatives performed in meeting various objectives including providing affordable, sustainable land ownership?

• What instruments of formalization are most cost-effective at relaxing the constraints on service provision, credit access and alienation of landed property in developing country cities?

• Whether and how we can recommend an alternative tenure form in which planners understand and recognize informal or customary institutions and try to incorporate them into de jure institutions in order to enhance tenure security and better manage urban land?

Cluster 3: Elements of good practice for public land management

Many developing country cities are characterized by substantial public land assets which often appear to be sub-optimally used, thereby leading to land supply constraints and price distortions. Research in this area would likely rely on case-study examples exploring the merits and drawbacks associated with different institutional options for public land management and associated intervention strategies that include land development by the State including public-private partnerships; informal settlement regularization; alienation of public land; development control and development planning among others.

In particular, urban planners in developing countries face an uphill battle with relatively low levels of compliance with urban development and planning regulations. Urban planning is constantly challenged by the arbitrary intervention of high-level government officials on the one hand, and widespread illegal land transactions and land use developments on the other. Hence, the urban planning system often does not effectively guide spatial changes, and urban sprawl becomes more haphazard causing larger costs in the long-term to correct adverse effects.

In this regard, relevant research questions are:

• What are the appropriate organisational structures and policies for managing public land in varying contexts?

• Which functions are best agglomerated?

• How can inter-Agency coordination be enhanced for functions that are better executed through separate organizations?

• How can the planning and development control processes in both substance and procedure be reformed to be more functional, realistic, enforceable and widely accepted?

• What is the performance of various public land use instruments to enhance the efficiency of public land use in given local conditions?

• To what extent are the appropriate institutional structures for public land management best determined by the choice of intervention policy/instrument?

Cluster 4: Institutions for urban land management and economic performance

Location decisions and performance of businesses across cities depend on a range of factors. These include local and national regulatory arrangements, availability and quality of infrastructure, and access to developed land. In China for example, cities prosper as local governments are more oriented towards local economic growth and have more fiscal strength and liberty to implement growth-oriented local policies. However, in many developing countries various institutional inefficiencies and policies limit access to land for industrial investment, and fail to exploit the opportunity for local economic growth. In this context, this cluster would inquire whether cities that are currently attracting investment are doing something with land policy, law and regulations that other cities are not. And in particular, are there specific land management institutions that are more conducive to economic development?

There are two broad sets of issues that will be addressed in this cluster. First, identification (through data collection) of alternate land use policies that regulate formal land supply and the role that the informal sector plays in land development. In this part, attention will be paid to potential support that the public sector can provide to informal developers when formal developers do not supply adequate land on the market. In particular, the links between alternate land development institutions and land conversion will be examined. Second, how do these land management institutions matter for location and performance of economic activity across cities? The specific questions will revolve around understanding the implications of rigid or inflexible land institutions on land conversion and economic performance. In answering these questions, the research cluster will examine the potential problems in supporting/ enabling the informal sector and explore options for how these obstacles can be minimized.

Examples of specific questions to be addressed include:

• Which local land-related factors enhance the performance of local enterprises, what are the barriers, and what is the role of government policy makers?

• What mechanisms work best in terms of managing partnerships between formal and informal land development?

• What are the impacts of sub optimal land development and urban planning (allocating land and installing basic services) in enhancing the performance of enterprises and increasing job creation?

• Does informality in the land development process hinder business expansion decisions and lower urban productivity?

• What land-related factors discourage long-term and large-scale industrial investment leading instead to short-term and small-scale activities which are less productive?

Cluster 5: Practices and experience with public land acquisition, particularly as related to infrastructure and to urban development and redevelopment.

Procurement of land for public uses is an essential step in many urban and infrastructure projects, and it is often difficult and costly in terms of time, money, and political capital. In addition, land procurement frequently involves the resettlement of existing tenants and owners of businesses and residences from the site to another location, and this in turn creates additional problems and challenges. In many countries, land procurement has been a cause of complicated legal arbitrations, of local unrest and civil disorder.

Public land procurement practices vary significantly across countries. In some cases, attempts are made to value land at market prices and to compensate owners for public takings. Many difficulties have been encountered in valuing land at market values, in some cases market values are more historic than current and in others expectations on future uses are considered. In yet other cases, practices involve compensating original owners with shares in the readjusted and revalued land, or with building rights in other parts of the city. Complications also emerge from legal justifications for the public to actually procure land, in particular with regard to legitimate changes of land uses. Land procurement is further complicated when property titles lack formal recognition because they were never registered or because developments were informal or even illegal. In addition, land held in common such as Ejido lands in Mexico or tribal lands in Africa pose challenges for public procurement.

Research under this cluster would:

• Review recent practices and experience with the procurement of land for public purposes and document typical applications of the main instruments that are currently used.

• Review alternative criteria used for compensations in public land acquisitions, and the variety of standards that are used to justify and/or guide involuntary resettlement.

• Assess the degree of success of approaches used when property rights are not formally defined, and when land is owned in a communal fashion.

• Illustrate with relevant case studies, and draw conclusions about the efficacy of varying approaches across stylized country conditions.

Cluster 6: Other

The Bank also welcomes papers generally relating to Urban Land Use and Land Markets which may not fall into any of the above described Clusters. These may cover subjects such as:

• Urban land markets and corruption.

• The relative merits of densification including sociological analyses.

• The impact of HIV/AIDS and the ability to pay for public goods in Africa.

• The environmental and public health implications of lowering land use and building regulations and standards.