Evolving Practice in Land Demarcation

Efforts to plan economic development tend to apply uniform and supposedly optimal solutions, increasingly expressed in terms of targets, such as, in the area of interest here, the percentage of registered and properly mapped land. (See, e.g., the UN’s Sustainable Development Goals). The present paper contends that the reason why these centralized and expert-led efforts tend to fail massively is because they still fail to adapt to local circumstances, as famously argued by Easterly in a very Hayekian spirit.

The survival of this planning misconception has affected land titling projects, which often aim at universal coverage in a given area, a policy often optimistically referred to as “systematic”, while the policy defended in this paper based on voluntary and, therefore, selective titling and demarcation is dismissed as “sporadic”. Thus, according to the World Bank’s good practice guidelines summarizing lessons learned since it started investing seriously in this area in the 1990s: “Systematic registration identifies, adjudicates, and registers rights to all adjacent land parcels in a selected locality and within a given period of time. Sporadic registration processes land rights on an ad hoc basis, usually when customers request registration of their parcels of land ”.

The extreme version of this systematic-titling argument even led part of the “land administration” literature to propose “holistic” objectives, according to which surveying each land parcel was considered a requirement for good titling . Such land administration systems must not only provide complete information on land, including the different types of private rights and public restrictions , but ideally they must also be managed in a integrated manner to facilitate governments’ control of resources. It is claimed, for example, that “governments must proceed further and integrate the actual management processes of land use, tenure and development ”.

Similarly, the World Bank advised in 2005 that “cadastre and registration functions should be connected and managed by a single institutional entity wherever possible ”. This single-agency policy—despite some more nuanced judgments by the evaluation unit of the Bank—is still advised by the Bank’s Doing Business 2018 report, when it considers as best practice in property transactions “ to bring all agencies involved in property transfer under one roof”; and when t he “coverage” component of its “Quality of Land Administration” index also scores countries higher if their mapping agency covers the largest business city in full and even higher if it covers the whole economy.

Consistent with these recommendations, which have deserved little attention in the law and economics literature , for decades most land titling projects and land registration reforms have been trying to implement exhaustive, even mandatory, land titling and demarcation based on delineating boundaries and representing parcels graphically, often in conjunction with attempts to integrate land registries with cadastres to reap the benefits of alleged synergies.

More recently, these policies have been more or less implicitly criticized by alternative “fit-for-purpose” proposals , by internal evaluations of the performance of World Bank projects which, having been designed under the traditional paradigm, lead evaluators to defend a more contingent approach, and also by the launch of some land titling projects that aim to avoid precise surveying to minimize costs.

However, the effective degree of change in terms of policy is debatable. Both the fit-for-purpose and contingent approaches, rather than focusing on the owners’ choice whether or not to title their land and with what precision and relying on different means and providers, still focus on the planners’ choice about which geographic areas to title and what level of demarcation precision to apply (usually, for physical demarcation, a uniform level, given by a particular technique and supplied by a given provider, as well as most often a mandatory degree of legal demarcation). They are therefore bound to reach adaptation at most at a general instead of the individual level.

More importantly, no significant change is visible as yet in terms of resource allocation. Considering a proportional allocation of administration and management costs, at least 53.45 percent of the unit costs of these land titling projects was spent on physically identifying and demarcating land parcels . Admittedly, t his figure is based on old projects, but is in accordance with more recent estimates. Among developed countries, the case of the Greek National Cadastre, which persists, as it has over the last three decades and despite repeated failure, in developing a functional single-agency, also reveals the resilience of this old paradigm.

I submit here that a common root cause of these policy mistakes is their interrelated emphases on universal (meaning all parcels in the intervention area ) and physicaldemarcation (a precise definition of physical as opposed to legal demarcation will be given momentarily). Emphasis on universal demarcation means that policy is oriented towards achieving maximum coverage in the relevant treatment area without paying proper attention to the tradeoffs involved and, in particular, to the fact that, due to the presence of fixed per-parcel demarcation costs, more extensive and precise demarcation (as well as titling, generally) is often only suitable for higher value land. This is an aspect that owners are in a privileged position to evaluate.

Moreover, this goal of universal coverage often ends up aiming for low average cost while sacrificing legal quality and emphasizing the physical dimension of land demarcation, which in practice often means the measurement and delineation of boundaries by one or more of the parties that have an interest in the land (including Government agencies). Correspondingly, these initiatives often pay little, if any, attention to the legal dimension of land demarcation: the fact that, in order for demarcation to produce effects on third parties, such party-led physical demarcation must be accepted by all other interested parties—which in this case mainly means the neighbors of each particular parcel .

This emphasis on physical and partial demarcation often leads to mistakes, such as (1) pursuing the above-mentioned objective of universal demarcation, even if the consequent need to lower average costs and shorten times leads to valueless lower quality; (2) overestimating the value of physical demarcation, which is behind excessive expenditure on mapping and surveying and the enactment of allegedly inefficient, mandatory demarcation rules; and (3) considering that the information needed for different decisions on property (e.g., the judicial evidence on which basis judges rule and parties rely for their contractual decisions versus administrative filings used for tax and other planning and regulatory purposes) is the same “data”, wrongly subjecting it to similar quality specifications and without requiring any specific incentives or specialization in its production. Consequently, it is thought, for instance, that both sets of information can easily be shared by government agencies, that duplications can easily be avoided, and that substantial economies can be fruitfully reached by sharing databases and even merging the agencies (that is, merging land registries and cadastres in integrated “land administration” bodies).

The main contributions of the paper are (a) the conceptual distinction between property-legal and physical demarcation and (b) providing a comprehensive framework for the main social decisions on property demarcation, which are of two types. On the one hand, with respect to the overall rules governing it, governments must decide on: whether or not to create a demarcation infrastructure system that, by incurring a fixed cost, enables individuals to demarcate their land more effectively; and either allowing voluntary demarcation or enacting a mandatory demarcation rule that forces individuals to incur a variable cost to demarcate their land either physically and/or legally. On the other hand, with respect to the provision of demarcation services, governments may either keep separate organizations or merge the cadastre with the land registry, with the intermediate option of linking their databases.

Source: Arruñada, Benito (2018), “Evolving Practice in Land Demarcation,” Land Use Policy. 77(September), 661–75. WP available at SSRN https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3184801.

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