Measurement Strategy for Successful Land Reforms in Rwanda

5/21/2019 Draft Thesis - Google Docs

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Accuracy or Approximation?

Measurement Strategy for Successful Land Reforms in Rwanda

By

Sanjay Kumar

Bachelor of Arts, Delhi University Delhi, India (2001)

Master of Arts, Annamalai University Tamil Nadu, India (2008)

Submitted to the Department of Urban Studies and Planning in partial fulfillment of the requirements for the degree of

Master in City Planning

at the

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

June 2019

© 2019 Sanjay Kumar. All Rights Reserved

The author hereby grants to MIT the permission to reproduce and to distribute publicly paper and electronic copies of the thesis document in whole or in part in any medium now known or hereafter created.

Author____________________________________________________________________ Department of Urban Studies and Planning

May 20, 2019

Certified by________________________________________________________________

Professor Bishwapriya Sanyal

Ford International Professor of Urban Development and Planning Director, SPURS and Humphrey Programs Department of Urban Studies and Planning

Thesis Supervisor Accepted by_______________________________________________________________

Professor of the Practice, Ceasar McDowell CoChair, MCP Committee

Department of Urban Studies and Planning



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Accuracy or Approximation? Measurement Strategy for Successful Land Reforms in Rwanda

By

Sanjay Kumar Submitted to the Department of Urban Studies and Planning on 20 May, 2019, in Partial Fulfillment of the Requirements for the Degree of Master in City Planning Abstract: The recent land tenure reforms in Rwanda have the potential to permanently influence the debate around land titling and clear property rights. In 2005, when Rwanda decided to abandon traditional property rights and to embrace formal rights, least did it know it would transform itself by moving from no land records to one of the most advanced and formalized land records in less than two decades. Rwanda climbed to 2nd rank in 2018 in World Bank’s ranking of ‘Ease of Registering Property’ from 137th rank in 2008. Rwanda created its cadastre at a reasonably low cost and in a relatively shorter time period as it adopted the ‘general boundaries’ or visible boundaries such as road, fence, or hedge over more accurate ‘fixed boundaries’. International agencies recommended Rwanda’s approach in the form of implementation guidelines to other developing countries within a theoretical framework FitforPurpose (FFP) land Administration. According to the recommended guidelines, the developing countries should adopt FFP as their initial goal, and thereafter, they may aim for an ‘ultimate solution’ one that developed countries have adopted. This view presents FFP as a cheaper and lowtech solution but also subpar as compared to the standards adopted by developed countries. This thesis questions the correctness of perception of FFP being subpar. However, Rwanda still faces informal transactions despite the high rank in ‘ease of registering property’ and the 6th lowest transaction fee in the world. This study explores the question “Is it ever possible (or efficient enough) to completely formalise all property transactions?” The thesis presents voluntary titling as a middle ground between the binary debate ‘in favour of’ or ‘against’ land titling. It also attempts to analyse the land tenure reforms in Rwanda to deduce the important learnings for implementation of titling projects elsewhere. Thesis Supervisor: Professor Bishwapriya Sanyal Title: Ford International Professor of Urban Development and Planning

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Acknowledgements At the onset, I want to express my gratitude towards Indian and the US government for giving me the much needed financial assistance that enabled me to study at MIT. All credits for the satisfactory completion of the thesis go to Bish Sanyal, my academic and thesis advisor, In the third semester, I was disillusioned with the often onesided ideological debates in the department. Bish understood my confusion and rightly encouraged me to pursue my interest. He suggested me to approach the topic with an open mind and explore the idea as I wish. His continuous support and guidance have helped me in exploring the subject in depth. I would also like to thank all the faculty members who equipped me academically and trained me to complete this thesis. Ezra Haber Glenn taught me R and regression in an intellectually satisfying manner. His detailed answers to my silly questions helped me grasp the concept firmly. Balakrishnan Rajagopal helped me debunk the idea of the existence of absolute property rights and thus gave a new dimension to my understanding. Karl Seidman, in his usual unassuming and destressing manner, taught me to produce a written work from field research. Also, Jason Jackson provided valuable comments to strengthen the thesis’s arguments. My heartfelt gratitude to MISTIAFRICA and Lloyd and Nadine Rodwin International Travel Fellowship for funding my research in and travel to Rwanda.

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Table of Contents ACKNOWLEDGEMENTS 4

LIST OF FIGURES 7

LIST OF TABLES 8

CHAPTER

1. Introduction 9

1.1 Why Land Tenure Reforms? 9

1.2 Why Rwanda? 10

1.3 Research Question 11

1.4 Research Methodology 11

1.5 Thesis Structure 12

2. Land Reforms in Rwanda: A Brief History 14

2.1 A Brief Introduction 14

2.2 Urgency of Reforms 14

2.3 Sequencing of the Reforms 15

3 Land Governance 18

3.1 Land Administration 18

3.2 Land Registries 19

4 General Boundary Principle 21

4.1 General Boundary Principle (GBP) 21

4.2 Significance of GBP 22

4.3 Evolution of GBP 27

4.4 Current status of GBP 28

4.5 Did Rwanda adopt GBP? 30

4.6 Why is GBP considered a subpar solution? 31

5 Benefits of Having No Existing Records 35

6 Sustainability 38

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6.1 Importance of Sustainability 38

6.2 High Transaction Fee 39

6.3 Legal Barriers 40

7 Impact of Reforms 44

7.1 Entrepreneurship 44

7.2 Formalisation of Establishments 45

7.3 Link with Urbanisation 49

8 Takeaways 55

8.1 Inevitability of Informality 55

8.2 Critical Evaluation of Comprehensive Titling 56

8.3 Optimal Titling 57

9 Conclusion 62

BIBLIOGRAPHY 64

APPENDICES

A A Sample Title Plan, England 70

B Data on Number of Reported Property Transactions 71

C Data on Urbanisation and Formalisation 72

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List of Figures: Figure1: Continuum of Land Rights, UNHabitat (UNHabitat/GLTN, 2008) Figure 2: Main components of Systematic Land Registration (SLR) (Ngoga, 2018) Figure 3: Key Principles of FitforPurpose Land Administration (Enemark et al, 2016) Figure 4: Size wise distribution of parcels classified as agriculture land (in hec.) (NISR,

2018b) Figure 5: No. of Total Outstanding Mortgages, Rwanda (Ngoga, 2018) Figure 6: No. of Reported Property Transactions per person for 30 districts, Rwanda Figure 7: Relationship between Property Transactions and Formal Establishments Figure 8: Distribution of No. of Property Transactions per person, Rwanda Figure 9: Share of Urban Population, Rwanda (Census, 2012) Figure 10: Share of Urban Population and Property Transactions per Person, Rwanda Figure 11: Relationship between Property Transactions and level of Urbanisation Figure 12: Choosing Between Private or Public Titling to maximise the social value of land

( Arruñada, 2017) Figure 13: A Modified Version of Voluntary Titling

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List of Tables: Table 1: Illustration of Fixed and General Boundaries Table 2: Digitised Parcels and a sample Title Deed Plan, Rwanda Table 3: International Efforts to Improve Land Administration Table 4: Authors of FitforPurpose Reports (Enemark et al., 2016) (FAO & WB, 2014) Table 5: Average land holdings in Rwanda (NISR, 2018b) Table 6: No. of Establishments in Rwanda (GoR, 2018)(GoR, 2015) Table 7: Definition of Formal and Informal Sector (GoR, 2015). Table 8: No of Formal and Informal Establishments (GoR, 2018)(GoR, 2015) Table 9: Share of Formal and Informal Establishment (GoR, 2018)(GoR, 2015) Table 10: Number and growth of Formal and Informal Establishment Per person Table 11: Correlation between Property Transactions and Formal Establishments Table 12: Geographical Spread of Official Reported Property Transactions per person Table 13: Correlation between Property Transactions and Urbanisation

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Chapter 1

Introduction “Administrative man recognizes that the world he perceives is a drastically simplified model of the buzzing, blooming confusion that constitutes the real world. He is content with the gross simplification because he believes that the real world is mostly emptythat most of the facts of the real world have no great relevance to any particular situation he is facing and that most significant chains of causes and consequences are short and simple.”

Herbert Simon 1 1.1. Why Land Tenure Reforms? My understanding of land tenure evolved after I joined the Indian Administrative Service (IAS) in 2009. Initially, I worked in Andamans as district head of land administration, 2

property registrar, and subdivisional landuse authority. Then in 2014, I returned to Delhi, my hometown, and worked as district head of land administration, and also as Special Inspector General Registration, Delhi who deals with the policy of property registration, stamp duty 3and regularisation of informal settlements in Delhi. In Delhi, I soon realised that the official policy and the ground reality had no common ground. The land administration department does not allow property registration in informal settlements, that are spread out across Delhi, although the residents carry out property transactions somewhat regularly, albeit informally. 4 The land administration reforms are essential for regularisation of such informal settlements as the current land laws are too complex and the existing land cadastre is more than 100 years old. The cadastre hardly bore any resemblance with the field reality. Unsurprisingly, the land registries are considered the third most significant source of corruption after Police and Judiciary due to ambiguous property rights (Transparency, 2009). In 2008, the government of India started a land record modernisation program with the ultimate aim to implement land titling that includes a land survey. However, in Dec 2016, the government stopped funding new land surveys, possibly because none of the financed projects, at the state level, were successful . This problem is not unique to India. “No project 5

in the developing world has been able to implement and sustain highaccuracy surveys over extensive areas of their jurisdiction” even with the support and expertise of international donor agencies ( Burns, 2007 :96).

1 As quoted by, James Scott in his seminal work, Seeing like a state (Scott, 2000) 2 IAS is a common managerial cadre of India. Members of IAS occupy the top position in the state as well as federal government. 3 Stamp duty is charged at the time of transfer of properties. In India, it is second or third largest source of revenue for provincial governments. 4 This fact is born out of my own experience as I was born and brought up in a slumresettlement colony in Delhi; and after 2006, in another part of Delhi, i.e. Nangloi, an informal settlement, where my father had bought a small piece of land in 1987. 5 According to Indian Constitution, Land is a state subject in India. The federal government provided only funding. From my official engagement with the land titling initiatives, I say that nearly all of the recent attempts at resurvey have failed. Only the state of Gujarat achieved partial success.

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https://www.sciencedirect.com/topics/social-sciences/developing-world

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Clear and unambiguous land rights are considered essential for the economic development of a country (Soto, 2000). Even the World Bank tracks the ease of registering the property as part of its Ease of Doing Business Index. Ironically, in the last five years, India’s overall rank in ease of doing business has improved, but the rank in ease of registering property has fallen to an abysmally low rank at 166th in 2019 from 92nd in 2014. To reform land 6

administration in India is challenging, primarily because of the lack of accurate and updated spatial land records (cadastre). My desire to find the right strategy to improve the land administration in India made me interested in Rwanda’s land tenure reforms. 1.2 Why Rwanda? To begin the research, I decided to focus on countries with highquality land administration. The World Bank tracks the Ease of Registering Properties (ERP) as part of its Ease of Doing Business (EDB) Index. ERP rank depends on the quality of land administration, official transaction cost, number of procedures involved, and time taken to register a property. In 2019, New Zealand stands at the top in ERP rankings. Surprisingly, Rwanda, a developing nation, stands at the second place! Rwanda is the only lowincome country in the top ten ranks. To me, Rwanda’s case is more relevant to India. Also, the transformation of Rwanda’s land administration is recent as in 2008 ERP Rwanda stood lowly at 137th rank. However, soon I had a few other reasons as well to select Rwanda as the focus of my study. Land tenure rights do not exist in the binaries of formal and informal instead they form, a widely accepted, continuum (UNHabitat/GLTN, 2008). Figure1: Continuum of Land Rights, UNHabitat (UNHabitat/GLTN, 2008)

Before 2012, Rwanda stood close to the extreme left side of the above continuum. Rwanda had a system of perceived and customary rights over land except for a few sporadic legal registrations in the capital city Kigali. Also, in 2008, Rwanda stood poorly at 137th the ease of registering property rankings out of 178 countries (World Bank, 2007). Rwanda did not have any cadastre or administrative structure to deal with the land and might have stood 7

6 India’s overall ranking has improved from 134 in 2014 to 77 in 2019 Ease of Doing Business Rankings of World Bank. However, ranking in ease of registration property (a component of the Doing Business Index), has gone down from 92 in 2014 to 166 in 2019. 7 Before colonisation, Rwanda had only traditional and customary rights in land. The colonial powers first time introduced written and formal land laws but only for small urban centres and especially for foreign investors.

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even lower in the rankings, but the World Bank did not measure the quality of land administration then. 8

After reforms, Rwanda moved to the extreme right of the land continuum. Rwanda abolished customary rights and made only an entry in the land registers a conclusive proof of the right in the land an extreme form of formal land tenure. In 2019, Rwanda stands at the 2nd rank in the ERP out of 190 countries (World Bank, 2019). I know of no other country that, in such a short span, moved from “nonexistent to best practice” (Ngoga, 2018) in land administration. Not surprisingly, according to the WB, Rwanda is the ‘biggest reformer’ in the history of the EDB index (World Bank, 2019a). The criticism of EDB index did not deter me as many other international agencies also hailed Rwanda’s land tenure reforms. Rwanda’s “approach is now labelled as FitForPurpose (FFP)” (Enemark et al., 2016). In 2016, this FFP approach is recommended to other countries by UNHabitat along with the Global Land Tool Network (GLTN) and Kadaster (Netherlands). 1.3 Research Question My focus is to deeply understand what worked in Rwanda and if its acclaimed land tenure reforms are replicable elsewhere. As part of the study, I will desegregate the factors that have vitally influenced and determined the outcome of its land tenure reforms. I will also explore if these factors, individually or collectively, can exhibit a similar outcome in a different context. In the end, the study may help in drafting a better implementation strategy for similar land tenure reforms in other countries. Understanding of the externalities and tradeoffs is necessary to do costbenefit analysis of such projects. To establish the project’s spinoffs, the data on growth in the number of (and formalisation of) business establishments (as a proxy of entrepreneurship) is analysed to evaluate its link with the land tenure reforms. This analysis would help in the evaluation of a theory that hypothesis that clear property rights will lead to the rise of entrepreneurial class (Soto, 2000). This research also reflects upon the wider debate about the informality of land tenure to introduce a viable solution in the form of “voluntary titling” that provides a middle ground in the current binary debate ‘in favour of’ or ‘against’ titling. Many researchers have studied different aspects of Rwanda’s land tenure reforms especially regarding gender justice. In the following pages, I will avoid the reproduction of the findings 9

of already published work and attempt to bring out a fresh perspective on issues that are otherwise not well covered by others. 1.4 Research Methodology

8In 2008 rankings, Rwanda stood at the third lowest at 370 days in the number of days taken to register a property. However, in the number of procedures, Rwanda had 5 as compared to 14. And the official cost of transferring land was low as compared to countries with higher fees. 9 Gender justice has been widely accepted success of the land reforms. Rwanda gave equal rights to women in land.

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The thesis is primarily based on literature review and secondary data in addition to a few semistructured interviews with the officials, property agents and a few other stakeholders during my field visit in January 2019. At first, I introduced myself (as an Indian civil servant and a graduate student of MIT) to a former Director General in Rwanda’s Natural Resources Authority, who personally led the reforms. He introduced me to the Director, Land Records, Rwanda. Director, Land Record and the office of Registrar General, Rwanda facilitated my research, including field visits and interactions with public officials. For the protection of participants (human subjects), I verbally obtained their consent before starting any discussion according to an MIT approved ‘consent proforma’. Also, I had the procedural exemption from obtaining any written consent to avoid any identifiable link as I offered complete anonymity to every participant. Consequently, the study does not report any individual response or attribute any opinion or argument to any person. During the field visit, I did not pay any financial incentives to recruit anyone, and everybody’s participation was completely voluntary. However, I monetarily obtained the assistance of a local graduate student as an interpreter to facilitate my interactions with the locals. The presence of a local interpreter helped me build trust with many interviewees. The thesis reflects development of own understanding after each stakeholder interaction. Many subsequent line of inquiries initially originated from casual conversations. Also, the interactions with officials allowed me to appreciate the reforms more minutely as otherwise had been possible. The data used in the research is obtained from the already published official statistical or similar reports such as Establishment census and Statistical Year Book available online on the official websites of concerned department. The property transaction data was deeply buried on an official website. The data is used in conjunction with public interactions to develop a clearer picture of the reforms. 1.5 Thesis Structure I have structured the thesis in nine chapters including introduction and conclusion. The next chapter briefly describes Rwanda and detailed timeline of reforms to set the stage and the context for the better understanding of subsequent chapters. Chapter 3 described the few key concepts related to land reforms that are frequently used in the study. The better understanding of these concepts will enable the reader to understand the discussion more comprehensively. During my research, I found that the adoption of the General Boundary Principle (GBP) is the single most vital factor contributing to the overall success of land tenure reforms in Rwanda. After Rwanda’s success, the international agencies theorised a new concept Fit for Purpose land administration derived from GBP. Chapter 4 comprehensively deals with GBP and how international agencies wrongly recognise GBP as a subpar solution while still recommending it to the developing countries.

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Before the reforms, Rwanda did not have any land records or cadastre, except for some registration data. Chapter 5 details how Rwanda benefited by the absence of land records. The other countries that have existing land records face problems of reconciliation of existing and new records from resurveying of land. I will discuss how some countries dealt with the problem of reconciliation. Chapter 6 deals with the aspects of sustainability of titling projects. Comprehensive titling projects, many times, fail due to failure to record subsequent transactions. Rwanda also faces the problem of informal property transactions primarily due to high transaction cost, lack of awareness and legal barriers. In Chapter 7, data on business establishments is analysed to study the impact of clear property rights. The chapter attempts to find a connection between the number of reported transactions and share of formal establishments and urbanisation. Before conclusion, Chapter 8 describes the two other significant findings of the thesis: the inevitability of informality and voluntary titling. The realisation of the first leads to the second. The voluntary titling forms a middle ground in the binary debate ‘in favour of’ or ‘against’ the land titling and provides a more sustainable solution. The concluding chapter summarises the evolution of my understanding while exploring this topic. I realised the futility of aiming to achieve complete formalisation of land tenure. An efficient land policy should target an efficient level of formality by incentivising formal transaction rather than by preventing or containing informality.

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Chapter 2

Land Reforms in Rwanda: A Brief History

2.1 A Brief Introduction Rwanda, also known as the country of a thousand hills, is a mountainous and landlocked country in centraleast Africa with an area of 26,338 sq km and is located just one degree south of the equator. With a population of close to 11 million, Rwanda has one of the highest density of population (415 inhabitant square km), although still one of the least urbanised in Africa. 10

Rwanda has low per capita income (USD 774/Year) (NISR, 2018a) despite the recent high GDP growth rates. The official language is Kinyarwanda; although most people speak French or English. The older generation is more likely to speak French as English has been adopted only in 2009 when Rwanda joined the Commonwealth. Historically, Rwanda was ruled by various kingdoms until Europeans arrived in the 1800s. In 1884, Rwanda was colonized by Germany and by Belgium in 1916 after it invaded Rwanda during WWI. Many scholars consider Hutu and Tutsi, class divisions (depending on the number of cows) rather than different races. However, things changed once, in 1935, Belgian rulers issued identity cards to people with labels of Tutsi, Hutu or others. This policy ossified the differences and further limited interclass movement that was previously possible. In 1959, Hutu population revolted and massacred scores of Tutsi. Many Tutsi fled. In 1962, a Hutudominated state emerged and remained till 1994. In the infamous 1994 genocide, more than half a million Tutsi and some moderate number of Hutu died. Rwandan Patriotic Front (RPF) fought against the then government of Rwanda and won a military victory. Currently, Rwanda has a presidential form of government. The then commander of RPF Paul Kagame is the incumbent President. Since then, the Rwandan government has been encouraging unity among its people. At the dawn of the 21st century, Rwanda adopted ‘Vision 2020’ that aims to transform the country into middleincome status by shifting from agriculture subsistence economy to a knowledgebased economy (RoR, 2000). Rwanda is one of the least corrupt countries on 11

the African continent and the biggest reformer in the history of the EDB index (World Bank, 2019a). 2.2 Urgency of Reforms The 1994 genocide took a heavy toll on life close to 1 million died and caused external and internal displacement of people. The influx of returning refugees who fled the country in earlier exodus (1959, 1963, and 1973, also known as ‘old case returnees’, mostly Tutsi) and

10 As per 2012 Census of Rwanda, the population of Rwanda is 10,515,973 with 52% women and 48% male. 11 E.V., T. I. (n.d.). Corruption Perceptions Index 2018. Retrieved from https://www.transparency.org/cpi2018

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who fled fearing retribution after 1994 genocide (also known as ‘new case returnees’, mostly Hutu) further compounded the problem. This largescale migration put a lot of pressure on land (Daley et al., 2010; Hoyweghen, 1999) and emerged as an extraordinary problem as the competition for land was one of the contributory factors to 1994 genocide (Bruce, 2007). Initially, old case returnees occupied the abandoned properties of those who had fled after the 1994 genocide. The problem compounded when new case returnees started to return to Rwanda. In 1995, the government introduced the landsharing policy. Old case returnees had to return the house to the new case returnees, who were the original owners. However, both need to share open land between them (Takeuchi and Marara, 2009). Surprisingly, this policy worked almost without any legal basis, possibly because of the mutual support and consent of people. In 1996, the government launched the imidugudu policy (villagisation) to regroup people in villages to correct the inefficiencies of dispersed patterns of homesteads. The policy involved land appropriation that needed information on land. The initial assistance came from the British Department for International Development (DFID) to support consultancy from 2002 to 2004. DFID also financed Phase I of the ‘Land Tenure Reform Process (NLTRP) in Rwanda” soon after the enactment of Organic Land Law, 2015. 2.3 Sequencing of Reforms Most of the African countries had a dual land tenure system. Customary law governed nearly all of the rural land; formal written law governed urban land, primarily to protect and promote investment coming from outside. Rwanda was not an exception. The first paragraph of the National Land Policy, 2004 (NLP) summarizes the then prevailing situation (emphasis mine):

“Apart from a few scattered land regulations, most of which date back to the colonial period, Rwanda has never had a proper land policy nor has it ever had a land law , a situation that enhances the existing duality between the very restrictive written law and the widely practised customary law, giving rise to insecurity, instability and precariousness of land tenure.”

The NLP categorises the history of land tenure systems in three periods: 12

1. Precolonial land tenure system: People had collective ownership of land with a complimentary between Agriculture and Livestock, i.e. they could move from one activity to another by surrendering the land back to the community. Families formed Lineages. A Chief headed clans formed of many lineages. Rights of clan vests in the Chief (Ubukonde). However, the Chief would settle families on his land (Abagererwa). Land rights were generally respected and flowed from generation to generation. Also, people enjoyed the land rights under the Supreme Protection of the King.

12 Until stated otherwise, the National Land Policy, 2004, Rwanda is the source of the content of this subsection.

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2. Colonial Era land tenure system:

German colonisation (1884 to 1916) recognised King’s authority over the land. However, the 1885 decree, established two doctrines that introduced duality in the land tenure system.

Any land transaction between an outsider an indigenous Rwandan needs the approval of a colonial official to be valid.

Settlers and foreigners need a title deed to use the land. Belgian colonisation introduced written law “codes and laws of Rwanda” for the benefits of settlers and other foreigners. New regulations guaranteed land tenure security to the settlers and other foreigners who intended to invest in land. Written law also applied to Missionowned land, urban districts, and business centres. It promoted the cultivation of cash crops such as cotton or coffee. The emphasis on agriculture forced many cattle breeders to migrate to Uganda, Congo. Between 1952 to 1954, King Mutara III abolished land ownership of chiefs (Ubukonde) and asked them to share their properties with their tenants. From 1959 onwards, the land became a source of real conflict that caused the first exodus.

3. Postindependent land tenure system: Even after independence, 90% of the land was still governed by customary laws. Written law applied to a small number of people. In 1963, the government gave the right to enforce the land right to “commune.” In 1976, the government allowed the 13

purchase or sale of customary rights in land, or the right to use soil. The 90s started witnessing landrelated conflict. The population pressure added to the problem.

4. Current Reforms (Augustinus et al., 2010: 4467) After the 1994 genocide, Rwanda faced multiple claims over land and had to settle most of the displaced people. A brief timeline of the reforms is as follows:

2003: The Constitution The new constitution recognised every person’s right to own private

property (Article 29). Also, the private property became inviolable. 2004: National Land Policy (NLP)

The National Land Policy set 11 General Guiding Principles such as recognising the land as a common heritage; a right to all Rwandans to enjoy the same access to land; and, land administration should guarantee land tenure security.

2005: Organic Land Law (OLL) Organic Land Law facilitated the implementation of the NLP of 2004

and recognised all past customary rights or ownership. However, all future property transfers must comply with the written law with no recognition of the customary rights. Registration of all transactions became compulsory (Article 30) and the first time land registries extended to the rural areas. All family members including females will get equal coownership in the property title.

2006: Field Consultation Before fieldwork, Rwanda conducted very extensive consultations.

Over 2,500 people consulted in urban as well as rural areas through 229

13 Before 2002, Rwanda was divided in 154 communes.

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focus group discussions. The majority saw statutory law over custom as 'the best guarantor of tenure security.' The awareness about the new law was low. Nevertheless, people increasingly relied on written proof of land ownership even if it was informal.

200708: Field Trials and Evaluation

Field trials started in four districts (out of total 30 in Rwanda) from Mar 2007 to Dec 2007. The process involved recognising and securing existing rights in or over land. The field trials emphasised the need for new institutions and skilled workforce. The government also prepared a strategic road map that outlined a timeline and list of resources needed to register all land in Rwanda. During the field consultations, landholders preferred to continue using natural boundaries as demarcated by fences, walls, vegetations or any other marking known to them. Thus, the government adopted a lowtech method of General Boundaries Principled (GBP) over a costly method of fixed boundary that needed demarcation with advanced survey instruments.

20092012: Rollout of Systematic Land Registration (SLR)

Figure 2 shows the process followed during SLR. Landowners walked through their boundaries in the presence of their neighbours. Then, a parasurveyor would mark the boundaries on printed aerial photography/satellite imagery of the area. Then followed, georeferencing of the marked demarcation to create a Unique Property Identity (UPI) for over 11 million parcels. LAIS (Land Administration and Information System) national spatial database encapsulated all the data and processes. The SLR ended in June 2012.

Figure 2: Main components of Systematic Land Registration (SLR) (Ngoga, 2018) 14

14 Ngoga (2018) reproduced the infographic from official publicity material.

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Chapter 3

Land Governance 3.1 Land Administration The first of the UN’s Sustainable Development Goals (SDG) for the 2030s to end poverty in all its forms professes the right and access of everyone to own and control over land. The 15

goal is measured in terms of the proportion of the adult population with secure land rights with legally recognised documentation. In any country, it is the land administration that recognises, creates, and maintains the legal documents that hold information about “ who holds which rights on what property” (Arruñada, 2018). Good land governance and its operational component i.e. land administration are essential to achieving the SDG (Enermark et al., 2016). However, since the general public deals with the land administration usually only when they transact a property, only a few outsiders understand its functioning well enough. Thus, a few concepts surrounding land governance or administration need more clarity to be clearly understood. Land governance is “the rules, processes and structures through which decisions are made regarding access to, and the use [and transfer] of land, the manner in which those decisions are implemented and the way that conflicting interests in land are managed” (FAO, 2002). Land administration, as defined by the UNECE, is the “process of determining, recording and disseminating information about the tenure, value and use of land when implementing land management policies” (UNECE, 1996). The European definition may not be widely applicable to developing countries. FAO’s definition of land administration is more comprehensive (FAO, 2002) that explains:

“land administration is the way in which the rules of land tenure are applied and made operational. Land administration, whether formal or informal, comprises an extensive range of systems and processes to administer:

Land rights: the allocation of rights in land; the delimitation of boundaries of parcels for which the rights are allocated; the transfer from one party to another through sale, lease, loan, gift or inheritance; and the adjudication of doubts and disputes regarding rights and parcel boundaries.

Landuse regulation: landuse planning and enforcement and the adjudication of land use conflicts.

Land valuation and taxation: the gathering of revenues through forms of land valuation and taxation, and the adjudication of land valuation and taxation disputes.”

15Goal 1: UN Sustainable Development Knowledge Platform, https://sustainabledevelopment.un.org/sdg1, accessed Dec 04, 2018. 1.4.2; Proportion of total adult population with secure tenure rights to land, with legally recognized documentation and who perceive their rights to land as secure, by sex and by type of tenure

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3.2 Land Registries For a long time, people exchanged goods and services a system called bartering. In the case of movable properties, the physical possession of goods is considered sufficient proof of ownership. The act of physically handing over of the good completes the transaction. Therefore, one can barter even with a stranger in an impersonal exchange of goods. However, in the case of immovable or real property such as land, it is difficult to be sure of the real owner until one personally knows the owner and the history of the land. To ensure against any fraud, historically, transactions in the land had two essential features (Larsson, 2000: 19):

Publicity of the transaction; and, Presence of Witness

Such requirements are necessary, even in current times, to enforce the property rights in rem (against everyone else) as opposed to in personam (against a person). Land registries fill this gap and facilitate an impersonal exchange of property, enabling a transaction between strangers. Land/Property transactions in different countries follow variants of either Deed Registration system or Title Registration system. Although, the world bank and many other international agencies recommend title registration over to deed registration. Let us discuss them in a little more detail: Deed Registration System: It registers a transaction as written down on a deed. A buyer (s) and a seller(s) come together and finalise their deal. Then, the deal is written down in the form of a deed, most likely or usually on stamp paper. Then, the contracting parties present the deed to a Registrar (or Notaries, as known in many countries) who is generally a public official. Registrar confirms if the people have executed the deed and pastes a copy of the deed on the registers kept for the purpose. Hence, the process is known as registration. The registrar is not supposed to verify the eligibility of the persons who are executing the deeds as the system registers only a ‘deed’ (a proof of transaction), and not ‘title’ (proof of ownership). Thus, he need not verify if the seller is the actual owner of the land/property. Consequently, the chances of frauds are high. However, this method has a cost advantage. The deed registration system does not require any cadastre. Thus, a country does not need to invest in surveying, and in establishing and maintaining boundary marks. The UK and many other the common law countries followed this system. Title Registration System: As the name suggests, rather than a transaction, the title itself is registered. In this system, the Registrar (or Notaries, as known in many countries) has to first ascertain if the seller is eligible to transfer the title. Before allowing the transfer, he, usually or as a common practice also checks if the land is free from encumbrances or dues. The system is considered much superior to the deed registration system. However, it presupposes the existence of an accurate and updated land cadastre with the details of each property and its owner.

19



Cadastre is an official record holding information about a piece of land. Initially, cadastre records are acquired from the first registration and field survey that fixes the boundary of each parcel of land with the help of survey instruments (e.g. Theodolite or Total Station Machine). The field survey physically measures each corner of a plot to fix the boundaries of a land parcel. Such boundaries are called fixed boundaries. The accuracy of the boundary depends on the level of technology deployed and availability of geographically referenced boundary pillars and marks. For the deed registration system, only a general reference of the boundaries is sufficient. The contracting party attach a sketch map of the area with the deed (also known as siteplan) that depicts the location of the plot and its approximate boundaries (Appendix A) . The boundaries can be estimated by some visible markings such as a fence, hedge, road, boundary wall or relative to adjacent plots. This concept is known as general boundary principle. Table 1: Illustration of Fixed and General Boundaries

Fixed Boundary 16 General boundary 17

16 Boundary Surveys. (n.d.). Retrieved from http://jfasurveyors.com.au/Boundary_Surveys/boundary_surveys.html 17 A Sample Title Plan, UK (extract from Appendix A)

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Chapter 4

General Boundary Principle 4.1. General Boundary Principle Establishing boundaries by surveying each land parcel is considered a default requirement for any good titling project (Kaufmann & Steudler, 1998). Therefore, investment in demarcating parcel boundaries is considered a fixed cost (Arruñada, 2017). By various estimates, the cost of such surveying and demarcation alone is over 50 % of such land titling projects (Byamugisha, 2013: 121; Arruñada, 2018). A joint report of the UNHabitat, along with Global Land Tool Network (GLTN) and Kadaster 18

(Netherlands) summarises Rwandan reforms as follows (emphasis added):

“In Rwanda, nationwide systematic land registration started after piloting in 2009 and was completed in only four years . Boundaries of spatial units (plots of land) were identified on prints of orthophotos in a highly participatory approach using locally trained land officers acting as trusted intermediaries. This reduced the need for conventional surveying techniques to a minimum. The highly efficient approach resulted in 10.4 million parcels being registered and 8.8 million land lease certificates being issued. The average unit cost was around USD 7 per spatial unit. This radical approach required a considerable political commitment to achieve in the timeframe.” (Enemark et al., 2016: 3)

In the form of GBP, Rwanda adopted a ‘highly efficient approach’ that reduced the cost and time required for surveying individual boundaries. The 'radical approach' the adoption of general boundary principle and use of printouts of aerial photography/satellite imagery over advanced surveying instruments proved to be the most critical factor in the overall success of land reforms in Rwanda. The general boundary means a ‘visible boundary’ as opposed to the ‘fixed boundary’ such as a fence, wall, natural barrier like a river, canal, boundary marks, hedges or any mutually accepted line (visible or imaginary) by the property owners. In Rwanda, the disputed boundaries were recorded separately for adjudication of claims. The determination of a ‘fixed boundary’ needs advanced survey instruments and is more accurate but the method is very costly and timeconsuming. Ironically, determination of fixed boundaries can create disputes amongst the neighbours who were, until then, well settled within their perceived boundaries. For example, in Australia, whose Torrens system is considered the gold standard for titling projects, even after surveying boundaries for more 19

18 According to its website, the “ Global Land Tool Network (GLTN) is dynamic and multisectoral alliance of international partners committed to increasing access to land and tenure security for all, with a particular focus on the poor, women and youth. The Network’s partners include international rural and urban civil society organizations, research and training institutions, bilateral and multilateral organizations, and international professional bodies.” https://gltn.net/aboutgltn/ 19 Torrens system has established three principles of land titling Mirror Principle (situation on the ground and records should be the same), Curtain Principle (no dispute before the grant of title would affect the title holder), and Indemnity Principle (the government will compensate if someone suffers because of any error or dispute about a recorded title) (Ruoff, 1957) .

21

https://gltn.net/about-gltn/



than a century, boundary discrepancies and disputes are still very common (O’Connor, 2016:354). In Australia and New Zealand, parcel definition “excited rather than resolved disputes” (Simpson 1978: 139). The concept that a less accurate method (“General Boundary Principle”) can be better than a more accurate method (“Fixed Boundary”) may initially sound counterintuitive. In the following sections, I will elaborate why the General Body Principle is indeed more efficient, sustainable and viable option. 4.2 Significance of GBP General Boundary Principle (GBP) is the crucial factor in the success of Rwanda’s land reforms. The concept of FitforPurpose Land Administration, now recommended by international agencies, is merely an adoption (and expansion) of GBP (as practised in Rwanda from 2009 to 2012). A joint publication of FIG (Federation of International Surveyor) and WB, in 2014 applied the concept of FitforPurpose (FFP) in land administration for the first time (FIG and WB, 2014). Henceforth, this publication titled “FitforPurpose Land Administration” will be referred to as “the 2014 report” in short. In 2016, UNHabitat along with Global Land Tool Network (GLTN) and Kadaster (Netherlands) issued another publication “FitforPurpose Land Administration Guiding Principles for Country Implementation”. Henceforth, it will be referred to as “the 2016 guide” in short. The 2016 guide academically beefed up the FFP concept that was initially introduced in the 2014 report. It also acknowledged that Rwanda’s “approach is now labelled as FitForPurpose (FFP)”. To clarify GBP and the evolution of FFP, I will discuss the following four assumptions that I have made:

1. The concept of FFP, in land administration, has emerged only after Rwanda’s reforms.

2. The FFP concept is nothing but academically padding up of GBP. 3. Surveying of boundaries is the most critical challenge that most titling projects face. 4. The FFP approach is proposed as a solution fit only for developing countries.

4.2.1 Assumption 1: The concept of FFP, in land administration, has emerged only after Rwanda’s reforms In its 2014 report, the World Bank and FIG (Federation of International Surveyor) did not cite Rwanda as a motivation behind the bringing the idea of FFP in land administration. The report mentioned Rwanda only in a passing reference along with other countries. 20

However, the 2016 guide expectedly acknowledges Rwanda as the source of the FFP concept, interestingly by citing the 2014 report, in the following words.

20 The 2014 report discussed many cases: 1.Land Tenure Regularisation in Rwanda 2. Communal Land Registration in Namibia 3. Adaptation of the STDM in Eastern Caribbean 4.Land Registration and Cadastral Mapping in Ethiopia 5. The Quest for Land Titling in Indonesia

22



“[Rwanda's] approach is now labelled as FitForPurpose by FIG and the World Bank in their joint publication of 2014 (FIG and WB, 2014) .”

FFP in land administration is the new solution as the 2014 report highlights in the following para:

“The term “fitforpurpose” is not new at all, but what is new is relating this term to building sustainable land administration systems.” (page 6)

Moreover, the 2014 report also terms FFP as an innovative approach,

“The publication presents an innovative, flexible approach that is jointly endorsed by the World Bank and the International Federation of Surveyors.” (page 5)

The 2016 guide also emphasises on the newness and innovativeness of the solution:

“The FFP approach provides a new, innovative and pragmatic solution to land administration focused on developing countries, where current land administration solutions are not delivering. (page VII)

In 2012, an international collaboration created the Land Administration Domain Model an ISO standard after much consultation. However, the LADM did not mention the existence of the FFP approach. Therefore, the concept of FFP adopted in the field of land administration only after completion of Rwanda’s reforms in 2012. 4.2.2 Assumption 2: The FFP concept is nothing but academically padding up of GBP The 2014 report defined FFP within a spatial framework. The 2014 report states that

“Fitforpurpose means that the land administration systems – and especially the underlying spatial framework of large scale mapping – should be designed for the purpose of managing current land issues within a specific country or region – rather than simply following more advanced technical standards”.

The 2014 report also lists the four key principles of FFP (produced verbatim):

– General boundaries rather than fixed boundaries – Aerial imageries rather than field surveys – Accuracy relates to the purpose [of carrying out a land survey ] rather than 21

technical standards – Opportunities for updating, upgrading and improvement

However, the 2016 guide expanded these four principles into 12 guiding principles in three distinct categories Spatial, Legal and Institutional.

21 A high cost commercial land may need a higher standard of accuracy as compared to lowcost vast agriculture fields.

23



Figure 3: Key Principles of FitforPurpose Land Administration (Enemark et al, 2016) This expansion is unnecessary and confusing without adding much practical benefit. For example, the last point given under the Legal Framework says: “Ensuring gender equity for land and property rights” How is gender equity a FitforPurpose guideline? Gender equality is a generic principle that one should always follow not only when it 'fits' the purpose. Let’s consider the first point of the Institutional Framework “Good land governance rather than bureaucratic barriers.” Should one aspire to have good governance only when it 'fits' the purpose? Bureaucratic barriers are rarely 'fit' for any circumstances. This principle makes no sense as FitforPurpose guideline. These 12 principles have 38 actions points. Most of them do not make much sense either. The criticism does not diminish the usefulness of the proposed model or denigrate its creators. It only emphasises the value of GBP as the core of the FFP concept, as other principles are just an afterthought. 4.2.3. Assumption 3: Surveying of boundaries is the most critical challenge that most titling projects face Surveying and finalising the boundaries is a big challenge that most of the titling projects face. At the 2010 annual World Bank Conference on Land and Poverty many stakeholders had raised the following concerns(FIG and WB, 2014):

“current procedures and requirements for mapping and boundary delineation were often too cumbersome and expensive.” (page 5)

And the 2014 report also states that the

“key bottleneck in land administration services is the use of traditional, high accuracy, expensive land surveying techniques to record land rights.” (page 7)

Also, using

“such advanced technical standards of adjudication, boundary marking and field surveys are far too costly, too timeconsuming and capacity demanding...” (page 19)

The 2016 guide also states that,

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“ [a] ttempts have been made for many decades to establish land administration systems in developing countries without much success...the implementation of traditional, Westernstyle land administration systems is simply too costly, timeconsuming and capacity demanding. It is estimated that with current rates and methods it will take many decades, probably centuries, to achieve global coverage.” (page VI)

The EU financed titling project in Greece made minimal progress even after two decades of its implementation. In 2014, European Land Registries Association (Tzinieri, 2014) expressed that almost,

“20 years after the introduction of the first cadastral law, only 6,1% of the country’s surface is covered by the Cadastre and the progress remains extremely slow and problematic.”

I will discuss this issue in more detail in the next chapter. At this stage, it is sufficient to state that GBP facilitates determination and finalisation of boundaries. 4.2.4 Assumption 4: The FFP approach is proposed as a solution fit only for developing countries Surprisingly, UNHabitat, World Bank, FIG (International Federation of Surveyors), Kedestare (Netherlands) and others unanimously consider the FFP as a solution fit for developing countries only because developing countries can not afford the ‘Western standards’. Even while recommending to other countries, international agencies consider the FFP approach as a subpar solution that is fit only for lessdeveloped countries. According to the 2014 report, FFP is designed to meet the countryspecific problem:

“Fitforpurpose means that the land administration systems – and especially the underlying spatial framework of large scale mapping – should be designed for the purpose of managing current land issues within a specific country or region – rather than simply following more advanced technical standards” (the 2014 report, page 6)

The intent is more clearly stated in the next para:

“the approach used for building land administration systems in less developed countries should be flexible and focused on citizens’ needs, such as providing security of tenure and control of land use, rather than focusing on topend technical solutions and high accuracy surveys .” (the 2014 report, page 6)

Does this mean that developed nations do not need any flexibility, and only they can absorb topend technology? Moreover, there exists an 'ultimate solution' outside FFP:

“Using a fitforpurpose approach does not limit ambitions for an ultimate solution , e.g. solutions in line with some advanced systems used predominantly in developed countries .” (the 2014 report, page 10)

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The international agencies used a doubtful reasoning to justify a subpar solution (in their 22

opinion):

“ In many developed regions of the world, this countrywide spatial framework has been developed over about two centuries as large scale cadastral mapping and maintained through property boundary surveys conducted to a high accuracy according to long standing regulations and procedures.” (the 2014 report, page 19)

Also, the developing countries should not, at all, aspire the Western standards in the beginning:

“When considering the resources and capacities required for building spatial

frameworks in less developed countries , the concepts predominantly used in developed countries may well be seen as the end target, but not as the point of entry. Using such advanced technical standards of adjudication, boundary marking and field surveys are far too costly, too time consuming and capacity demanding, and in most cases simply not relevant, for providing an initial suitable spatial framework.” (the 2014 report, page 8)

Moreover, developing countries should wait to meet the high standards of the West as

“in most developed countries [cadastre] is developed over a period of about

two centuries and in response to societal, institutional and technological developments. Less developed regions of course can t wait for that .” (the 2014 report, page 24)

In their joint declaration, FIG and World Bank emphasised the same theme.

“When considering the resources and capacities required for building such systems in less developed countries, the concepts of mature, sophisticated systems as predominantly used in developed countries may well be seen as the end target, but not as the point of entry.” (the 2014 report, page 8)

The 2016 guide once did propose to extend the solution to some developed countries “that do not have complete land registration/cadastral coverage or where the maintenance of land information has failed.” However, the intent remained pretty much the same as the 2016 guide further reiterates:

“ Westernstyle land administration systems is simply too costly , time consuming and capacity demanding. It is estimated that with current rates and methods it will take many decades, probably centuries , to achieve global coverage.” ( the 2016 guide, page VI)

The FFP approach is a game changing solution, but only for developing countries,

“The FFP approach to land administration has emerged as a game changer

for developing countries and offers a viable, practical solution to provide security of tenure for all, quickly and affordably, and to enable control of the use of all land.” ( the 2016 guide, page VII)

22 The modern land surveying started 1804 in France. However, most of the English colonies, completed land survey during the second half of 19th century. Much before the US and the UK.

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The 2016 guide considers Western standards far from the reach of developing countries.

“Attempts to introduce conventional (Western style) land administration solutions to close the security of tenure gap have not been successful due to weak institutions, inappropriate laws and regulations , high costs, complexity, lack of capacity, inadequate maintenance, long implementation time frames and to a great extent inappropriate for the local context and conditions.” (page 2)

4.3 Evolution of GBP GBP is an old concept. However, the 2014 report or the 2016 guide did not discuss the evolution of GBP. The Bible describes a land transaction involving the Prophet Jeremiah in the following words:

“I bought the field from my cousin Hanamel of Anathoth and paid him the price: seventeen silver shekels. I drew up the deed and sealed it, called in witnesses and weighted out the money on the scales. I then took both the sealed deed of purchase and its open copy in accordance with the requirements of the law and handed over the deed of purchase to Baruch.” (Jer. 32:9)

As evident in the above quote, historically, transactions in the land had two essential features (Larsson, 2000: 19)

Publicity: Transaction should be announced in public or deep deposited in the court. Witness: Some witnesses should attest the execution of the transaction.

However, the deed was the only source of the description of the land. Even ancient societies felt the need for some common standard to describe a piece of land. 23

In 1086 AD, England had completed the first widespread land survey in the form of Domesday Book, on the orders of William the Conqueror. However, no map existed to support the details. The main breakthrough happened in 1807 when Napoleon I instituted French cadastre that had the following features (Larsson, 2000: 1925) :

Unique identification of all lands in the country Parcel numbers (scale of 1:2500 or 1:1250) Area (without any demarcation of the boundaries) Land use and land values for each owner

However, the cadastre was not updated and soon lost its value. The Land Transfer Act 1875 of England may be the first statute to recognise general boundaries (Simpson, 1976: 135139). The Act links the location of a parcel of land to “clearly visible physical features”. As per the rule, the visible features were a wall, fence, hedge, ditch, stream, and road. All except the last, “serve the practical function of keeping

23 In ancient Egypt (around 3000 BC), evidence shows the existence of land documentation for taxations purpose kept in the royal registry. Even during the Roman Empire, in the third century AD, Emperor Diocletian ordered extensive land surveys for taxation purpose. Around 700 AD, China had a taxation system based upon crop yield supported by land survey records.

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intruders out and stock in” and these visible markers were the “boundaries in law as well as in fact” (Simpson, 1976: 135139). Determination of the precise measurement was not required. The land registries described land by a topographical map that depicts “physical features as they appear on the ground” or by verbal description filed with the deed. In England, GBP had many benefits. Even a layman could identify the location of a plot with the help of physical features. GBP allowed HM Land Registry to dispense with any need to have any comprehensive land survey. Despite the evident success of GBP in England, many experts called general boundaries as “a euphemism for uncertain boundaries”; for others, GBP is not an innovation but a “sensible reintroduction of a rule of law which had governed conveyancing in England for centuries” (Simpson, 1976: 135139). Later, in 1885, Ontario (Canada) introduced general boundaries and Ireland in 1891. Sudan Land Settlement and Registration Ordinance, 1925 adopted the provision of ‘general boundaries’. Nigeria introduced GBP in 1935. The Registered Land Act of 1963 of Kenya had the features of GBP (Simpson, 1976: 135139). 4.4 Current Status of GBP In the past, the GBP served England well. Even in the current legislation, the concept has full legal value. The Land Registration Act, 2002 recognises and defines boundaries as follows (emphasis added): 24

“60. Boundaries

(1) The boundaries of the registered estate as shown for the purpose of the register is a general boundary , unless shown as determined under this section.

(2) A general boundary does not determine the exact line of the boundary.” In England and Wales, there is usually no record of exact boundaries of properties (GDM, 2015). Even the maps issued currently do not carry any measures, and comes with the following disclaimer,

“HM Land Registry endeavours to maintain high quality and scale accuracy of title plan images. The quality and accuracy of any print will depend on your printer, your computer or its print settings.This title plan shows the general position, not the exact line, of the boundaries. It may be subject to distortions in scale. Measurements scaled from this plan may not match measurements between the same points on the ground.” (“Find a property”, n.d.)

The US has never undertaken any comprehensive land survey. In the United States ( Deininger & Feder, 2009) , a system of “title insurance” evolved. Rather than the state, private companies, over a long period, developed comprehensive land records. The title insurance is an additional cost contracting parties bear in the US.

24 Land Registration Act 2002. (2002, March 07). Retrieved from https://www.legislation.gov.uk/ukpga/2002/9/contents

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In 1979, Scotland implemented land titling regime by replacing old (c. 1617) deed registration system by mandating physical demarcation of each parcel of land. More than 30 years later, only 19 percent of landmass and 55 percent of its titles shifted to a new regime and this demarcation requirement before registration “caused frequent refusals and delays in registration” ( Arruñada, 2017). In 2010, Scotland Law Commission advised the government to make the use of such mapping clause optional to expedite registration and clear the accumulation of a “considerable backlog” ( Arruñada, 2017) . In 2015, World Bank published (Hilhorst & Meunier, 2015) ‘How Innovations in Land Administration Reform Improve on Doing Business: cases from Lithuania, the Republic of Korea, Rwanda and the United Kingdom’ a compilation of case studies of countries that have amongst the best land administration. The individual case studies were written by country experts many of whom were involved in the implementation of the reforms. Except for Rwanda, other countries accepted the adoption of GBP in a very muted and apologetic tone. Lithuania adopted GBP to expedite the restitution of land after the demise of USSR.

“Surveys were imprecise, however. To speed up the survey process, the government decided that nongeodetic measurement would be sufficient for restitution, with geodetic measurement required for further land transactions, such that improving survey quality was a gradual process.” (Hilhorst & Meunier, 2015: 21)

Here, ‘nongeodetic measurement’ means GBP. GBP served Lithuania well. However, in recent years, the country decided to move towards ‘fixed boundaries’. Slowly but gradually. Interestingly, even with general boundaries, Lithuania was the second best in ERP at that time (2016) and still stands at the 1st in the quality of land administration in 2019. 25

Nevertheless, the country discarded GBP as a lowquality solution. The decision forced Lithuania to invest in a more accurate survey and imposed a higher transaction cost on people who need to get land surveyed before property registration. Unlike Lithuania, South Korea had land records before modernisation that involves shifting of 35 million land parcels from the previous analogue survey to new digital mapping. One of the biggest obstacles was that,

“the quality of the paper cadastral maps, which dated back to the 1910s...

This proved to be challenging as the measurement skills and tools used to produce these maps in the early 1990s produced serious distortion…. Creating significant errors….leading to inaccuracies….causing discrepancies” (Hilhorst & Meunier, 2015: 40)

To overcome the challenge, South Korea made the following legal adjustment:

“It was concluded that adjustments had to be made on the seamless cadastral maps. It was agreed that just for administrative purposes and not for land transactions, seamless cadastral maps would be produced using the cadaster of each individual parcel without the obligation to guarantee accuracy but only to serve as district level cadastral maps. Moreover, it was agreed that seamless cadastral maps would not have the legal authority to be used in land transactions. The

25 This is derived from the World Bank reports and data on Ease of Doing Business as publically available.

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government is currently carrying out a nationwide cadaster reinvestigation project that will eventually correct this situation.” (Hilhorst & Meunier, 2015: 41)

South Korea adopted the GBP (only for administrative purposes) in the hope of its eventual correction. Even with GBP, the quality of South Korea’s land administration is the ninth best in 2019. Still, South Korea plans to carry out "a nationwide cadaster reinvestigation project” to improve the lower quality GBP. In 2019, the quality of land administration of Lithuania, Rwanda and South Korea stands at 1st, 3rd, and ninth rank. Still, they are apologetic about the quality of their land survey. Moreover, all three, including Rwanda, have decided to abandon GBP and move to the fixed boundary system. Why? During my field visit to Rwanda, officials admitted such tendency emanates from the perception that GBP is a subpar solution. Fixed boundary principle is a very highcost solution. Many perceive it superior to GBP even when many advanced countries follow GBP. The FFP guidelines, as issued by the international agencies, may further strengthen this subpar perception. 4.5 Did Rwanda adopt GBP? Table 1 provides a visual idea of the general boundary and fixed boundary. In theory, Rwanda adopted general boundaries, but in practice, it is actually a fixed boundary. In Table 2, the leftside image shows georeferenced and digitised general boundaries that were earlier marked by people on a satelliteimagery of the area. The rightside image shows that the deed plan has full details and measurements of boundaries of a land parcel. In the past, the general boundary would roughly describe a boundary with the help of some natural or humanmade visible features. The deed would have a rough sketch that describes the relative position of a parcel vis a vis other visible marks. There was no way to use this map to establish the exact boundary. In Rwanda, parasurveyor marked the general boundary on an aerial/satellite imagery. The marked imagery went to the centralised processing zone. After scanning, the boundaries were georeferenced with the help of a software. After georeferencing, the boundaries got the exact geocoordinates (latitude and longitude). Consequently, any surveyor can identify the exact boundary on the ground with the help of survey instruments. As explained above, Rwanda attained Fixed Boundary after georeferencing of the marked general boundaries. Also in other countries, in recent times, georeferenced general boundaries are, in reality, fixed boundaries. A comparison of Table 1 and Table 2 shows that Rwanda is transitioning from a fixed boundary (derived from general boundaries) system to another fixed boundary (demarcated by surveyors in agreements with all adjacent landowners) system. This also highlights the incorrect usage of the term ‘general boundary’ with respect to Rwanda in most of the publications. Table 2: Digitised Parcels and a sample Title Deed Plan, Rwanda

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Digitised Parcels 26 Title Deed Plan 27

4.6 Why is GBP considered a subpar solution? In 2014, the international agencies went gungho about GBP and since then have been publicising and recommending it in the form of FFP. In the previous three decades, the international efforts to improve the land administration were grounded more on finding the right geospatial technology. This explains why GBP was never considered a viable option. A UN expert committee on land administration has documented a list of (Table 3) significant international efforts to improve the land administration (UNGGIM, 2015): Table 3: International Efforts to Improve Land Administration 28

Year Event/Organisations Action/Decision

1977*

8th Regional Cartographic Conference for AsiaPacific

Creation of an advisory panel on cadastral surveying and mapping

26 The image is a digitised version of general boundaries as published by Ngoga ( 2018: 70) 27 Business Procedures Rwanda. (n.d.). Disclaimer. Retrieved from https://businessprocedures.rdb.rw/procedure/43/15/step/66?l=en 28 This list is prepared by UN Committee of Experts on Global Geospatial Information Management, in its report The Application of Geospatial Information Land Administration and Management (UNGGIM Version 3.1, 13 July 2015. I added the 2016 guide to the list. The committee also wrote: “The United Nations Statistics Division, through its Regional Cartographic Conferences for AsiaPacific and for the Americas, in collaboration with international bodies such as the International Federation of Surveyors (FIG) and other United Nations bodies have been addressing cadastral, land information and land tenure issues for over thirty five years.”

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1980

9th Regional Cartographic Conference for AsiaPacific

Resolutions on capacity development for cadastral mapping, cadastral survey systems and national LIS

Oct 1999

Bathurst Workshop on Land Tenure and Cadastral Infrastructures for Sustainable Development

The Bathurst Declaration called for a commitment to provide effective legal security of tenure and access to the property for all.

April 2011

Governing Council of the United Nations Human Settlement Program

Resolution on “Sustainable urbanization through equitable access to land, housing, basic services and infrastructure”

Feb 2012

Permanent Committee on GIS Infrastructure for Asia and the Pacific, GSDI6 & FIG

The Kuala Lumpur Declaration on Spatially Enabled Government and Society

May 2012

United Nations Committee on World Food Security

The Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests

Dec 2012

International Organization for Standardization

The Land Administration Domain Model (LADM) as a standard was published (ISO 19152:2012)

Mar 2014 International Federation of Surveyors and World Bank

FitForPurpose Land Administration

Oct 2014 Third HighLevel Forum on United Nations Global Geospatial Information Management

The Beijing Declaration on Sustainable Development with Geospatial Information

2016

UNHabitat, Global Land Tool Network (GLTN) and Kadaster (Netherlands)

FitforPurpose Land Administration Guiding Principles for Country Implementation

*UN Expert committee in its report incorrectly mentions the year 1997 Currently, the UN has an expert group UN Expert Group of Land Administration and Management that has the following two objectives (quoted verbatim) : 29

Play a leading role at the policy level by raising political awareness and highlighting the importance to decisionmakers of the need for timely and fit for purpose land administration and management and;

Encourage the use of geospatial information tools and systems to improve the legal certainty of all citizens in the world with respect to the registration of the relation between people and land.

This group reports to UNGGIM (UN Committee of Experts on Global Geospatial Information Management) that was set up by Economic and Social Council, in 2016.

29 UNSD UNGGIM. (n.d.). Retrieved from http://ggim.un.org/UNEGLAM/

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UN Expert Group of Land Administration and Management has two cochairs and both are Geospatial experts:

1. Mr Kees de Zeeuw, Kadaster International, Netherlands, and 2. Mr Silvano TjongAhin, Management Institute for Land registration and Information

System, Suriname. Now, let us discuss the details of the agencies and experts involved in writing the 2014 report and the 2016 guide.

The 2014 report: This is FIG publication No. 60. World Bank jointly participated. The 2016 guide: A UNHabitat publication. UNHabitat, Kadastre (Netherlands),

GLTN coauthored it with the sponsorship of the Norwegian Government and Swedish International Development Cooperation Agency (Sida).

All authors are common for both reports except Keith Clifford Bell who coauthored only the 30

2014 report. No economist or social scientist from the World Bank or UNHabitat was involved. Table 4: Authors of FitforPurpose Reports (Enemark et al., 2016) (FAO & WB, 2014)

Authors Authors Background 31

Stig Enemark

Stig Enemark is Honorary President of the International Federation of Surveyors, FIG (President 2007–2010). He is Professor of Land Management at Department of Development and Planning, Aalborg University, Denmark.

Keith Clifford Bell

Keith Clifford Bell joined the World Bank in 2003 where he has responsibility for leading the World Bank’s land administration and management program throughout the East Asia Region. Previously he was the Surveyor General of Victoria, Australia.

Christiaan Lemmen

Christiaan Lemmen is an international consultant at Kadaster International, The Netherlands. He is a guest researcher at Twente University (Faculty ITC), The Netherlands, and the chair of the Working Group 7.1 ”ProPoor Land Tools” of FIG Commission 7.

Robin McLaren

Robin McLaren is a director of the independent consulting company Know Edge Ltd, UK. He has supported many national governments in formulating land reform programmes and National Spatial Data Infrastructure (NSDI) strategies.

30Even though the authors of both documents were same, Rwanda was not given credit in the first version. In a 2014 report, authors based the motivation in 2010 World Bank Conference on Land and Poverty, citing the problems faced in conducting advance surveys by many. Ironically, in the 2016 guide, they pointed out that Rwanda’s approach has been named FFP. A pleasant, but a complete reversal. 31 As extracted from the 2014 report.

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All the four authors are geospatial experts (Table 4). Evidently, geospatial experts are the most prominent drivers of the policy of international agencies on land administration, land governance and land tenure and they would expectedly find GBP to be a subpar solution. Interestingly, the economic costbenefit analysis that is common in the infrastructure projects is missing in most of the titling projects. This explains why comprehensive titling projects also face criticism from the right too, as Arruñada wrote while quoting others (Arruñada, 2018)

“the reason why these centralized and expertled efforts tend to fail massively is because they still fail to adapt to local circumstances (Easterly, 2014). They therefore disregard the value of “knowledge of the particular circumstances of time and place” underscored by Hayek (1982: 521) which, even after the fall of Socialist economies, has widely been ignored in development.”

Therefore, the international agencies, led by experts, holds GBP a subpar solution despite its effectiveness and cost efficiency. These geospatial experts worked like the ‘policy entrepreneurs’ that Kingdon (1995) discussed in his seminal work “Agendas, Alternatives, and Public Policy”. As, most of these titling projects, in spite of their rhetoric of empoweringthepoor, in fact, serve the interest of the suppliers of titling and complementary services (Arruñada, 2017). Still, why do countries follow a highcost method (fixed boundaries) over more efficient (general boundary principle)?

“The conventions of nationstates are socially generated , much like the conventions of families, social movements, or religions. Although policy makers see themselves as trying to divine best practices and although they work under teleological assumptions about the trajectory of policy, they are seldom able to judge whether an innovation improves upon the status quo. Policy choices are based on fads, revered exemplars , or abstract theories, rather than solid evidence.” (Dobbin, Simmons, Gerrett, 2007) (emphasis mine)

As per the Constructivism theory of diffusion, most of these countries are a willing follower once the international agencies promote a standard (Dobbin, Simmons, Gerrett, 2007). The countries find it socially acceptable to follow a policy of a perceived leader. The Netherlands (as per some officials) is the perceived leader as Rwanda sent its officials to the University of Twente, the Netherlands for training in land administration. The Netherlands with many universities on geospatial surveying has welldeveloped connections in the policy world nodes and exercise, mostly through Kadastre (Netherlands) a land registry and mapping agency, an influential role as predicted by a theory advanced by Hira (1999). This idea explains why Kadastre (Netherlands) was involved in authoring the 2016 guide even when the guide prescribes general boundary principle as opposed to a geospatial survey. The above discussion may also explain why Rwanda initially followed general boundaries. The initial funding came from DFID (British Department of International Development). Possibly, the initially perceived leader was England that follows general boundaries.

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Chapter 5

Benefits of Having No Existing Records In the previous chapter, we discussed the difficulties countries face in undertaking a new land survey. In Rwanda, the adoption of the General Boundary Principle helped in expediting the pace of the land survey. However, other countries face an additional challenge of reconciling new measurements with the existing records. South Korea faced severe difficulties in matching present measurements with old records as:

“One of the biggest obstacles in the establishment of the KLIS database was

the quality of the paper cadastral maps, which dated back to the 1910s and had to be digitalized and transformed first into digital cadastral maps and then to seamless cadastral maps. This proved to be challenging as the measurement skills and tools used to produce these maps in the early 1990s produced serious distortion. Moreover, many of the more than 100yearold maps had been damaged over time, creating significant errors. Mismatches existed between past and present cadastral control points, leading to inaccuracies, while the loss of cadastral control points caused cadastral discrepancies.” (Hilhorst & Meunier, 2015: 40)

To overcome the challenge, South Korea decided not to give legal status to the new records/measurements. Unfortunately, this problem is not unique to South Korea; rather it is very common. Greece had faced the same challenge as that of South Korea while doing the new land surveys. Greece has been struggling to resolve this issue for more than 20 years. As per a report in the New York Times, in 2013:

“Greece’s land transaction records are still handwritten in ledgers, logged in by last names. No lot numbers. No clarity on boundaries or zoning. No obvious way to tell whether two people, or 10, have registered ownership of the same property…. This state of affairs is particularly galling because Greece has thrown hundreds of millions of dollars at the problem over the past two decades, but has little to show for it. At one point, in the early 1990s, Greece took more than $100 million from the European Union to build a registry. But after seeing what was accomplished, the European Union demanded its money back….Since then, Greece has tried, and tried again. But still, less than 7 percent of the country has been properly mapped, officials say.” (Daley, 2018)

In 2014, an official statement (Tzinieri, 2014), from the European Land Registries Association, highlighted the situation in Greece more clearly,

“Almost 20 years after the introduction of the first cadastral law, only 6,1% of the country’s surface is covered by the Cadastre and the progress remains extremely slow and problematic mainly due to inherent factors of the project.”

India faces problems quite similar to those of Greece. In India, the current cadastre is more than 100 years old and was prepared by plane table survey and chain survey methods (Rao

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et al., 2014). This makes the existing cadastre inefficient and outdated due to continuous land fragmentations (Srinivasa Rao et al., 2003). Rwanda did not face this challenge of reconciling as it did not have any existing records. To buttress this argument, let’s consider another country Lithuania whose success is as striking as of Rwanda. In 2019, Lithuania's land administration is considered as the best in the world. Like 32

Rwanda, Lithuania too prepared the records from scratch after gaining its independence in 1990. During the Soviet regime, the system of private property in land did not exist. Notably, in 2018, Rwanda replaced Lithuania to occupy the second place in ERP rankings where Lithuania stood in 2016 and 2017. Moreover, like Rwanda, Lithuania did not take a long time to finish the surveying of land. As discussed in the previous chapter, the surveying of boundaries is a critical challenge that countries face while implementing land tenure reforms. The land records should describe “ who holds which rights on what property” ( Arruñada, 2018). ‘Who’ and ‘which’ form textual data. They are easy to computerise by simple data entry. However, ‘what’ is a spatial component that needs a reference system to uniquely identify any property. South Korea digitised the textual data from the existing records while the spatial measurements differed from the existing records. South Korea decided that

“adjustments had to be made on the seamless cadastral maps. It was agreed that just for administrative purposes and not for land transactions, seamless cadastral maps would be produced using the cadaster of each individual parcel without the obligation to guarantee accuracy but only to serve as districtlevel cadastral maps. Moreover, it was agreed that seamless cadastral maps would not have the legal authority to be used in land transactions. The government is currently carrying out a nationwide cadaster reinvestigation project that will eventually correct this situation.” (Hilhorst & Meunier, 2015: 41)

In simple language, South Korea adopted GBP ‘without the obligation to guarantee accuracy’ but only to serve as districtlevel administrative maps without any legal authority. Old records would continue to hold legal validity. In my opinion, South Korea provides a simple and viable solution for other countries to follow in similar circumstances. However, South Korea seems apologetic about this solution even when the quality of South Korea’s land administration stands at 9th rank in the world. 33

In India, only the state of Gujarat has been somewhat successful in completing a fresh survey. To solve the problem of mismatch, as discussed above, the government empowered field functionary to ignore up to 5 per cent deviation (error or difference between two measurements) without any legal proceeding. This approach is another way to reconcile new measurements with existing records. Existing records have legal sanctity. After a fresh survey, landowners may not accept any reduction in their landholding. The mismatch of measurements causes operational logjam

32 Based on the data used in, Doing business 2019: Training for reform: Comparing business regulation for domestic firms in 190 economies . (2019). World Bank. 33 Based on the data used in, Doing business 2019: Training for reform: Comparing business regulation for domestic firms in 190 economies . (2019). World Bank.

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and litigations. Without sorting the problem of mismatch, conducting a fresh survey “will take many decades, probably centuries, to achieve global coverage” (Enemark et al., 2016). Currently, FFP guidelines do not provide a way out of this problem. The guidelines do not even discuss this challenge since Rwanda did not face it. I hope, the next edition of FFP guidelines will consider this problem.

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Chapter 6

Sustainability 6.1. Importance of Sustainability Having no prior records may be an advantage but having no prior practice of property registration is a big challenge. “Surveying in developing countries is also often abruptly interrupted and the initial efforts are shown to be meaningless when subsequent transactions remain unregistered ( Arruñada, 2018) .” Sustainability of titling projects depends on the registration of subsequent transactions. Even during the implementation phase, a number of properties may exchange hands. Notably, “no project in the developing world has been able to implement and sustain highaccuracy surveys over extensive areas of their jurisdiction” (Burns, 2007:96). Soon after the completion of the reforms, Rwanda faced the problem of nonreporting of property transactions. I learnt from my experience as a land administrator that a parcel once transacted informally is likely remain out of the formal system. Consequently, informality would gradually increase. In 2012, Rwanda completed the field work by uniquely identifying close to 11 million land parcels. Surprisingly, after completion of the project, only around 10 percent of people 34

came forward to collect their land title document. Initially, people had to pay a fee of RwF 1,000 (US$1.20) to collect their title document. After 2013, this fee was abolished to enhance people’s participation. The pace increased afterwards. By mid2017, 7.16 million (65 %) landowners had collected their title documents (Ngoga, 2018). The problem of informal property transactions emerged immediately after the implementation phase. During the 201314 financial year (July, 1 to June, 30), only 10,535 official transactions were registered, i.e. merely 0.13% of the total private holdings of around 8 million. In 201516, this number increased to 148,069 or close to 1.8 % of the total land 35

parcels. In 201415, the share of residential and agricultural land registered in Kigali was 36

5.6 % and 1.54 %, while in rural areas the percentage was 0.27% and 0.07% (Ali et al., 2017). This rate was less than what the project proponents had expected. In 2015, a world bank study tried to analyse the depth of informality through a threestage survey of around 3,600 households spread across the country. The study found the following main reasons behind the low percentage of formal transactions, especially in rural areas (Ali et al., 2017):

1. High Transaction fee: Many times, people transfer property informally due to the high transaction cost relative to its market value. The study found that the transaction cost to register a property transaction was around 22.6 % of the monetary value of the rural land as compared to 0.64 % in Kigali the capital city. The researchers

34 The details have been discussed in Chapter 2 35 DFID. DFID Rwanda Logframe, Support for Land Tenure Regularisation, August 2016 as reported by Ngoga (2018). 36 DFID Rwanda Logframe, Support for Land Tenure Regularisation, August 2016 as reported by Ngoga (2018).

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recommended reduction or removal of the official transaction fee of RwF 30,000 37

(around $33). 2. Legal barriers: in Rwanda, one cannot register any subdivision of agriculture land

that is below one hectare. The study recommended the removal of the restriction. 3. Distance from the land registry office: The study found that people are less likely to

register a transaction if the office of the land registrar is far. Consequently, the study recommended the opening of more field offices.

The researchers’ recommendations are in line of what the Commission on Legal Empowerment of the Poor recommended that “new and small landowners [should be] exempted from registration fees and taxes.” Surprisingly, “no proper consideration is given to whether the need for subsidies is signalling a lack of demand for titling” (Arruñada, 2017). Also, the lack of interest on the part of landowners to report subsequent transactions may by because she underestimates the value of titles or may be the title suppliers overestimated it (Arruñada, 2017). 5.2 High Transaction Fee In 2019, Rwanda's property transaction cost is 6th lowest in the world amongst 186 38 39

countries (World Bank, 2019b). Rwanda charges a flat fee of RwF 30,000 (close to $33) for any land transaction. Almost all studies found this fixed fee high and regressive, especially for rural areas. Consequently, the much lower number of reporting of land transactions in rural areas. The field officials confirmed that the department is considering the reduction or maybe the removal of this fee. Is it a high fee? Will reduction or removal of this fee help? On the one hand, the WB study asks Rwanda to forgo even the minimum fee, and on another, it asks Rwanda to open even more field offices. Is this approach financially sustainable? Establishing land registries involves a fixed investment. Sustaining them needs continuous funding. In addition to office and other overheads, the salary of staff is also a substantial expenditure. In an ideal condition, land registries should, at least, sustain themselves through user fees. Reduction of the transaction fee will further jeopardize the financial viability of land registries. On 28 Feb 2019, in a press statement, the government admitted that the “current institutional and financial structure of RLMUA is not sustainable and so a new approach is urgently needed.” 40

Many countries, especially common law countries, use stamp duty and land transfer fees as a taxation tool. In 2017, the UK generated close to 8 billion pounds a year from stamp duty (Scanlon et al., 2017) with an upward trajectory over the years. In India, stamp duty is either

37 Transfer of Rights on a Parcel by Voluntary Sale. (n.d.). Retrieved from https://irembo.gov.rw/rolportal/en/web/rnra/landtitletransfer?menuhighlight=CAT#LTS 38 This is in term of percentage of the cost of property value that is assumed to be 50 times the per capita income. 39 Rwanda jointly stands at the 6th position along with many countries with transaction cost of 0.1 % of the property value. The five countries (Slovak Republic, Belarus, Georgia, Saudi Arabia, Kiribati) ahead of Rwanda do not charge any fee. 40 REPUBLIC OF RWANDA. RWANDA LAND MANAGEMENT AND USE AUTHORITY. (n.d.). Retrieved from https://rlma.rw/index.php?id=282

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second or third most significant sources of revenue for the provincial governments. 41

Germany and France stands at 127th and 142th rank respectively in the increasing order of official transaction fee in the list of 186 countries ((World Bank, 2019b). Rwanda is a capitalscarce country with limited government revenue. Are the positive externalities of strong property titling sufficient enough to subsidies land registries? Alternatively, such subsidy can fund alternative social programs such as health and education. Moreover, how much more should be invested in one of the world’s best system that could not ensure complete formalisation yet? Ironically, contrary to the goal of reducing transaction cost, Rwanda increased the cost of property registration for the public. Rwanda decided to abandon the GBP and impose fixed boundary principle. Now, before a property transaction, a licensed surveyor needs to 42

survey a land parcel, especially if it involves any subdivision. The surveyor precisely demarcates the boundaries with advanced survey instruments. Adjacent landowners also need to consent to the new measurement. The fresh readings are entered into official records. Then only, the process of property transfer, especially of subdivided property, starts. Probably, matching western standards is the justification for the introduction of the fixed boundary system. Surprisingly, Rwanda is already way ahead of most of the western countries. International agencies aiding into the GBP as a subpar solution further fuels such policies. Benito, a land economist, describes what drives such bad policies (Arruñada, 2018):

“A possible answer is that their consequences are misunderstood by donors….Alternatively, these policies may provide an opportunity to extend the monopoly position of land registries...to other providers, be they private, such as conveyancing lawyers and notaries, or, as in the case at hand, a mix of private (surveyors) and public (tax cadastre) agents. In support of this conjecture, it is worth noting that all policies may well share similar consequences: increasing the demand of surveyors and cadastres (mandatory demarcation).”

Chapter 8 will discuss how the transaction cost can be used as a policy tool to meet socially optimum goals. 6.3 Legal Barriers In Rwanda, another prominent reason for nonregistration of many property transactions is the restriction on the sale of agricultural land if the remaining area falls below 1 hectare. According to one official, Rwanda is planning to have a master plan for each district and this restriction may not apply if the subdivision complies with the master plan. Many countries have such restrictions, supposedly, to prevent fragmentation of agriculture land below an economic holding. However, such restrictions are generally ingeniously bypassed. I noticed through my own experience as a registrar that either people jointly buy a

41The VAT (Value Added Tax), a form of sales tax, is the largest source of provincial revenues. The second spot is either occupied by stamp duties or excise tax on alcohol. 42 My interview with property agents revealed that for every transaction they have to now hire a technician who surveys their property and gives reading to be used for submitting the transaction to the land registry department. However, the department officials said that not all transactions need the help of a surveyor. However, in case of selling part of land, one has to generate an additional UPI (Unique property Identification) number. The fee is around RwF 60,000 in urban areas and 30,000 RwF in rural areas.

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big plot or transfer their undivided share in the property to bypass such restrictions. Also, such illegal subdivision of agriculture land and unapproved construction over it give rise to informal settlements on the city’s periphery (Larson, 2002). Therefore, I was curious to know why Rwanda introduced this outdated clause in its modern law. Rwanda first introduced this clause in the 2005 Organic Land Law in Article 20 that states:

“In the context of the public interest and to ensure economically profitable exploitation of rural lands, the Minister in charge of agriculture in collaboration with the authorities and the population concerned may order l and consolidation operations for their exploitation….

Without prejudice to the provisions of the first paragraph of this article, it is

forbidden to divide the lands intended for the agriculture and the breeding of an area less than or equal to one hectare . Similarly, land of less than or equal to five hectares can be broken up by the landowner only with the authorization of the local Land Commission.”

This clause was replaced by even more restricted Article 30 of the 2013 Land Law that states:

“It is prohibited to subdivide plots of land reserved for agriculture and animal resources if the result of such subdivision leads to parcels of land of less than a hectare in size for each of them. Owners of lands prohibited to be subdivided shall coown and use the land in accordance with the laws.”

A USAID study (Hughes et al., 2016) critically examined the introduction of this clause. This official records base this clause on an unidentified FAO assessment that defines an economic holding to be 0.75 hectares. However, according to the USAID study, FAO defines 0.9 hectares as the minimum economic holding rather than 0.75 hectares. The study also found, through extensive interviews, that many people are ignorant of the clause and even otherwise, in total disdain of the clause, transfer land informally. The relationship between smaller land holding and farm productivity is also not as clear as it appears to be. Many studies have shown smaller parcels to be more productive than a larger one (Demetriou, 2014). Even in Rwanda, a 2009 study found an inverse relationship between size and productivity (Ansoms et al., 2009). In 2014, another study by the World Bank found that yields are higher on smaller farms in Rwanda (Ali & Deininger, 2014). According to this study, labour market imperfections (not enough offfarm employment and low wages) help smaller farms to absorb the excess labour in a more gainful way. Table 5: Average land holdings in Rwanda (NISR, 2018b)

Population (2012)

Area* (in hects)

Average Area per person (in hect.)

No. of parcels (2015)

Average Parcel size in 2015 (in hect.)

No. of Parcels per person

Rwanda 10,515,973 2,069,548 0.20 11,420,044 0.181 1.09

Kigali City 1,132,686 69,761 0.06 390,368 0.179 0.35

South 2,589,975 536,556 0.21 3,217,749 0.167 1.24

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West 2,471,239 403493 0.16 3,157,138 0.127 1.28

North 1,726,370 302,369 0.18 2,668,170 0.113 1.55

East 2,595,703 757,369 0.29 1,986,619 0.381 0.78

*This area does not include water bodies, national parks, and roads. (LAIS, 2014) Table 5 shows that average land availability per person is much lower than one hectare. The onehectare limit still looks harsh even if we consider the land availability per family or household. A substantial number of people would still be falling below this limit. Figure 4: Size wise distribution of parcels classified as agriculture land (in hec.) (NISR, 2018b)

Figure 4 shows the distribution of the size of parcels that are classified as agriculture land. This distribution pattern highlights the absurdness of the onehectare limit. A family may have more than one noncontiguous parcels. However, such holdings would hardly benefit from the economies of scale. I do not think this onehectare limit has anything to do with economic holdings (as is the official explanation). It originates somewhere else. Consider Article 91 of 1999 Succession law of Rwanda:

“A property which does not exceed an area of one hectare and any other undivided thing cannot be partitioned. The owners have rather to agree on the modalities of their sale or exploitation and share the fruits there from.”

Thus, the limit of one hectare existed even before the 2005 Organic Land Law. It also possibly explains the reason why Rwanda adopted one hectare limit over the FAO’s 0.75 hectares (according to Rwandan officials) limit. This onehectare limit is also part of Article 99 of the Governing Matrimonial Regimes, Donations and Succession Act of 2016 that states:

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“it is prohibited to subdivide plots of land reserved for agriculture and livestock if the result of such subdivision leads to parcels of land of less than one (1) hectare in size for each of them”

Several studies have recommended the removal of this clause to reduce the rate of informal transactions. What if people still decide to transact informally? Is it ever possible to have all property transactions recorded or registered? Rather than complete, an optimum level of formality should be targeted as a public policy goal. This will be discussed in detail in Chapter 8.

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Chapter 7

Impact of Reforms Most of the recent studies on Rwanda’s land reforms lauded the efforts but recommended that rise of informality can be curbed by subsidising the running of land registry and abandoning other public policy goals (such as keeping farm holding economical) to sustain the reforms. This chapter examines the impact of land titling on entrepreneurship and formalisation of establishments to ascertain if the tradeoff is worth it. 7.1 Entrepreneurship Comprehensive land titling is supposed to usher Rwanda into an entrepreneurial era with a rise in the number of establishments with access to mortgages based capital. Despite my efforts, I did not get detailed data on the mortgage even though that can be easily accessed through LAIS. Nearly all other studies on the subject relied on interviews rather than official mortgage data. I will not cite them as their results are contradictory and confusing. For this study, I sourced the data from many statistical reports and official government websites. By the end of 2015, financial institutions had cumulatively extended a total of USD 2.6 billion mortgage lendings in 49,694 loans while 2/3rd of it is in Kigali alone (Ali et al, 2017). Surprisingly, the study, like few others, lauded the ‘considerable activity in the mortgage market’ based on the data of one specific day, and without any comparison. However, Figure 5 shows the cumulative number of mortgages (as entered in LAIS on 31st Dec of the relevant year (Ngoga, 2018). In the absence of an empirical study and pre2012 data, it is 43

difficult to attribute the growth in the number of mortgage to any specific factor. 44

Figure 5: No. of Total Outstanding Mortgages, Rwanda (Ngoga, 2018) 45

43 The 2018 data, I personally sourced from the officials. 44 This number is of outstanding cumulative mortgages. Also, most of the mortgages, especially housing finance, would reflect in the data for a long time. 45 The 2018 data, I personally sourced from the officials.

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The mortgage is supposed to fuel entrepreneurship (Soto, 2000), and that should reflect in the rise of the number of establishments. Therefore, in the absence of any data on the mortgage, I relied on the data of the number of establishments to gauge the impact of land tenure reforms on entrepreneurship. Table 6: No. of Establishments in Rwanda (GoR, 2018)(GoR, 2015)

No. of Establishments

2011 Census

2014 Census

2017 Census

Growth 201114

Growth 201417

Total 123526 154236 190288 24.86 23.37

Private and Business Oriented (% of total)

119270

(96.55)

148376

(96.20)

183867

(96.63)

24.40

23.92

Table 6 presents the data on the total number of establishments as reported in the respective Establishment Census. The number of establishments grew 24.86 per cent from 2011 to 46

2014, and 23.37 per cent from 2014 to 2017. Thus, the growth in the number of establishments in the intercensus period does not show any distinct pattern before and after land tenure reforms. Thus, the current data does not explicitly support or substantiate any theory, as of De Soto (Soto, 2000), that predicts an the rise of a class of entrepreneurs on the introduction of clear property rights alone. Or, this is still too early to get any clear to judge the impact of clear property rights. 7.2 Formalisation of Establishments The Establishment Census includes formal as well as informal establishments. Possibly, formalisation of property rights may have influenced the formalisation of establishments even if not their growth. To understand this relationship better, one must understand the definition of formal and informal establishments in Table 7. 47

Table 7: Definition of Formal and Informal Sector (GoR, 2015).

Criterion Formal Sector Informal Sector

Regular Operational Accounts Yes No

Registration with Rwanda Revenue Authority Yes No

Production of goods/services for sale or barter in nonagricultural activities

Yes Yes

Notably, the main differences between formal and informal establishments are of maintenance of account and registration with the Rwanda Revenue Authority. With land titles, proprietors should find it easy to get themselves registered. Also, the establishments

46 Most of the establishments are Private and Business Oriented establishment. Thus, the total number of establishments can be used to study the impact on private establishments. Other establishments are cooperative, public sector, public private partnerships, and NGOs. 47 Rwanda relaxed the the ILO’s definition by removing the additional norm of number of employees (ILO’s definition classifies establishment with less than five employees as informal).

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should maintain regular accounts if they need formal credit in future. Also, after the land tenure reforms, the formalisation of existing establishment is easier as compared to starting a new establishment. Thus, the share of formal establishments should rise more in comparison to the rise in the number of new establishments. In the year 2011, the ratio of formal to informal establishments was 0.0488, 0.0728 in the year 2014, and 0.0811 in the year 2017. As we can see from table 8, the ratio increased at a slower pace. The ratio of formal and informal establishment increased from 2014 to 2017, however at a slower pace than from 2011 to 2014 (Table 8). Also, the share of the formal establishment 48

is shrinking over the years (Table 9). Seemingly, the land tenure reforms did not impact the growth in the number of establishments or their formalisation. Table 8: No of Formal and Informal Establishments (GoR, 2018)(GoR, 2015)

Establishments Census 2011 2014 2017

Formal 5420 10018 13566

Informal 110995 137699 167180

Ratio of Formal to Informal 0.0488 0.0728 0.0811

Table 9: Share of Formal and Informal Establishment (GoR, 2018)(GoR, 2015)

Year of starting

operation

Formal Informal Ratio

2014 Census

2017 Census

2014 Census

2017 Census

2014 Census

2017 Census

Before 1970 350 68 79 65 4.43 1.05

19701999 1030 543 3217 2037 0.32 0.27

2000 2011 4300 3364 35883 17080 0.12 0.20

2012 2014 4312 3218 98447 27557 0.04 0.12

2015 2017 6122 120428 0.05

With informal status, the establishments are far less likely to receive institutional credit. Therefore, the justification for the unwillingness of the proprietors to join formalisation is not clear. Possibly, they are too small and do not see any advantage of formalisation due to limited growth prospects.

48 One can also argue that most of the formalisation happened from 2012 to 2014, i.e. immediately after the reforms. However, people did not immediately adopt the formal property rights as only a tiny percentage of people collected their title documents until 2014, and only a few reported the sale property transactions officially.

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However, Table 10 shows that the rate of formalisation is different in Kigali and other rural districts. In comparison to a 32 percent rise in the number of formal establishments in three districts of Kigali from 2011 to 2017, the growth has been higher at 50 percent in the remaining 27 districts. This difference in the growth shows that formalisation increased at a higher pace in the rural areas as compared to the capital area, but this may be due to the base effect. Table 10: Number and growth of Formal and Informal Establishment Per person

Average 2011

Average 2014

Average 2017

Growth From 201117

Growth From 201114

Growth From 201417

Kigali 0.0302 0.0297 0.0399 0.32 0.02 0.34

Eastern 0.0086 0.0122 0.0151 0.76 0.43 0.24

Northern 0.0120 0.0131 0.0163 0.36 0.09 0.25

Southern 0.0107 0.0119 0.0139 0.30 0.12 0.17

Western 0.0098 0.0127 0.0153 0.56 0.30 0.20

All Rural 0.0103 0.0125 0.0151 0.50 0.23 0.21

Figure 6: No. of Reported Property Transactions per person for 30 districts, Rwanda

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I tested if higher growth of formalisation of property rights (as represented by growth in the number of reported transactions) influenced the formalisation of establishments. However, I did not find any relationship whatsoever. It may still be too early to find such causation. However, data shows that districts with higher share (not growth) of urbanisation and of formal establishments picked up formal property rights first. The trend of officially reported property transactions per person for each of the 30 districts (Figure 6)(detailed data at Appendix B ) shows stupendous growth in 2018 that indicates 49

the rapid acceptance of formal property rights. The normalised data of the number of formal establishments (detailed data at Appendix C ) and reported property transactions showed some linearity with varying significance over the years. In 2014, this relationship is statistically significant; however, this significance reduced somewhat in 2017 and goes away completely in 2018 (Table 11). In other words, initially (2014), the districts with a higher share of formal establishments adopted formal property transactions too, but later, especially in 2018, this trend broke down.

Figure 7: Relationship between Property Transactions and Formal Establishments 50

49 REPUBLIC OF RWANDA, RWANDA LAND MANAGEMENT AND USE AUTHORITY. (n.d.). Retrieved from https://rlma.rw/index.php?id=265. 50 The bunching towards lower values is due to outlier effect of three districts of Kigali. The bunching improves once the outliers are removed.

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Table 11: Correlation between Property Transactions and Formal Establishments

7.3 Link with Urbanisation In 2018, the reported property transactions are widely distributed across Rwanda (Figure 8). A comparison between Table 12 and Figure 9 shows that, initially, the reported property transactions concentrated around major urban areas (capital region), but within a few years, 51

they spread all across Rwanda (detailed data at Appendix C ). The recent higher growth in 52

the number of property transactions in rural areas (Figure 10) may also mean urban savings or surplus capital being invested in rural areas for speculative purposes. 53

51The findings are similar to the results of other studies (Ali et. al, 2017) that showed a higher share of informal transactions (based on the interviews done in 2015 and 2016) in rural areas. 52 In GIS rendering, the distribution classes for each year is based on the standard deviation of relevant year data. Thus, the pattern should be viewed as relative rather than absolute comparison. 53 In 2018, Nyaruguru, Ruhango and Rulindo even after being rural districts, had relatively higher property transactions per person, the distinction that was earlier held by Kicukiro and Gasabo (urban districts) (Figure 13).

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Figure 8: Distribution of No. of Property Transactions per person, Rwanda

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Table 12: Geographical Spread of Official Reported Property Transactions per person from 2014 to 2017 GIS Maps (Classes based on Standard Deviation)

2014 2015

2016 2017

51



Figure 9: Share of Urban Population, Rwanda (Census, 2012) Nyaruguru (Figure 10) shows an unusually high share of property transactions even when its urban population (2 percent) is amongst the lowest. Nyaruguru capital Kibeho is a prominent tourist attraction being a pilgrimage site of Catholic Christians. Also, people may be investing in land for speculative purpose as a new major road to the district is under construction (Nkurunziza, 2019). In the year 2014 and 2015, a linear and statistically significant relationship existed between the level of urbanisation and the number of property transactions (per person). However, in the later years, this relation gradually lost linearity and significance especially in 2018 as rural areas increasingly adopted formal property transactions (Table 13).

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Figure 10: Share of Urban Population and Property Transactions per Person, Rwanda 54

Therefore, the data on formal establishment and urbanisation explains the initial acceptability of the formal property transactions. In 2018, the relationship did not last as people picked up formal property rights even in areas that have less formal establishments and urbanisation. However, the relationship may again establish itself in a longer time frame as growth in the number of property transactions stabilizes.

54 The size of bar is relative to absolute number of that year. The axis marks are changing across the years to accommodate overall higher number of growth in transactions.

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Figure 11: Relationship between Property Transactions and level of Urbanisation 55

Table 13: Correlation between Property Transactions and Urbanisation

55 Three districts of Kigali city are outliers. The bunching at lower values scatters after removing the three districts.

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Chapter 8

Takeaways 8.1 Inevitability of Informality When I say informality is inevitable, I mean informality of land tenure as opposed to the informality of builtspace or business establishments, even though a similar argument can be made for them as well. Most of the existing literature project the impression that informality has risen rapidly as an aftereffect of industrialisation and urbanisation. However, this argument has a flip side. This argument gives a false impression of the existence of historical reality, in time and space, when informality began amidst existing formality. On the contrary, formality began from absolute zero amidst pervading informality. More correctly, the introduction of formality leads to the classification of prevalent reality into the binary of formal and informal. Ironically, it is the informality that is seen as a kind of abnormality. In my opinion, it is the formality that is rising and spreading and not the other way around. Formal property rights is a modern practice. Earlier, the extent of formality signified only the extent and depth of the state’s capacity. In the past, countries prepared cadastre purely for the taxation purpose and not to facilitate conveyancing in property transactions. Human relationships with land or property are so diverse and immutable to myriad forms that it is impossible for any formal system to capture them all. Even with the best of the systems and strategies, in Rwanda, all studies recognised the existence of a significant number of informal property transactions. Our perception of informality in land tenure is closely related to the concept of disorderliness in the built environment that became more visible in cities after rapid industrialisation and urbanisation. In the eyes of a planner, a haphazard slum, even after grant of formalised titles, may not have more legitimacy as compared to a posh housing society that is privately planned in violation of zoning and building laws. Similarly, one does not see historical monuments, heritage buildings or archaeological sites as informal or illegal structures even if they might be standing in violation of the zoning regulations or some construction codes. Understandably, most of the regulatory regimes have prospective effect. Informality is just another classification as formality is. Informality is a socially optimum solution retained by those who can not afford imposed formality. Most of the residents of informal settlement might have never been part of formal property transactions. Thus, on migration to a city, such residents may likely retain practices known to them. However, those who govern, impose or study formality see these newcomers to be spreading informality. However, Ananya Roy sees their existence as a product of the state’s exceptionalism (Roy, 2005). According to her, the continued existence of informal settlements depends on a conscious decision of planning apparatus of the state not to act a form of the indulgence. The absence of regulatory enforcement is seen as the grant of remission. In my opinion, the

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lack of enforcement is a political choice (of the political establishment and not of planning apparatus) that is selectively and strategically made to ensure the least threat to the survival of the state; and not a concession. In general, the state too feels threatened all the time and thus carries a constant vigil against ‘enemies of the state’. I, charged with regulatory zeal, ordered and carried out many demolitions. The reason as to why the planning apparatus does not operate or does not enforce regulations lies in the legitimacy of informality in the eyes of inhabitants. Legitimacy grows over time. Also, the inhabitants of these informal settlements consider most of the informal transactions legitimate and similar to a formal transaction such as contracting parties, a consideration, and the presence of witnesses, and some form of documentation. The regulatory system always calculates the threats of a possible backlash while erasing such informal settlements. Therefore, informality is inevitable, and it will exist, not as a concession by the state, but despite that. Also, informality is the expression of people's disdain towards the regulatory framework that is unilaterally created by the planning executives as executive decrees rather than legislative statutes. The acceptance of the concept of inevitability of informality provides many advantages:

1. It allows policymakers to stop pursuing the absurd and impossible goal of ensuring formalisation of all transactions in land and other aspects of land tenure;

2. It may prevent the imposition of a regime of legal apartheid on informal settlements especially when it comes to access to public service;

3. It brings focus on regulating the spread of formality and not of containing or preventing informality that, in any case, exists outside the system;

4. It increases the acceptability of the proposed solution voluntary titling by preventing it from being classified as a subpar solution.

Honestly, I do not intend to say that informality is good or people want informality. The idea discussed above only helps in destigmatisation of informality in land tenure. This allows the policy makers to accept a solution that integrates informality without abandoning the goal of formalisation. 8.2 Critical Evaluation of Comprehensive Titling The concept of inevitability of informality is well accepted in taxation or business regulations. Such regulations exempt many businesses or individuals earning below a certain income level. However, when it comes to land titling, the project proponents push for comprehensive coverage by promising a lot but ignoring the lack of any hard evidence in favour of comprehensive titling projects. Even international agencies prefer universal coverage over any other possible solution (Arruñada, 2018). Comprehensive titling projects suffer from the problem of sustainability due to the lack of registration of subsequent transactions. The proponent of any comprehensive titling projects presumes the existence of official capacity to record, monitor and update all relations between land and men, all the times. During my research on Rwanda, I realised that this presumption is a complete farce. Rwanda, one of the most significant reformer, could not prevent informal transactions. The formalisation of all property transactions may not even be needed.

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Contrary to the expectations, the US has never undertaken any comprehensive land survey. In the US (Deininger, 2009), a system of “title insurance” evolved. Rather than the state, private companies, over a long period of time, developed comprehensive land records. With the help of the records of all land transactions, they can examine the legal validity of transactions to detect any defects. In the case of UK, Max Weber (Heller, 1998) pointed out, long ago, that industrial development happened in England first, even when it had the “most confusing and least formal system of property law and judicial procedure”. Conversely (Scott, 2000: 98), cadastral mapping was more successful in the countries that had a weak civil society as the powerful central state could impose itself, e.g. Napoleon could map France much earlier than England where legal professionals tried to stifle the creation of any cadastre to prevent redundancy of their profession. Even Spain could map colonies in Latin America before it mapped itself. In 1679, England did the same thing, completely mapped Ireland's land, buildings, people and cattle, to facilitate “the rape of that nation” before it mapped itself. Even the US introduced relatively modern land registration in its colony Philippines while keeping the traditional system for itself (Iyer & Maurer, 2009). 8.3 Optimal Titling If informality is inevitable, which titling regime can best accommodate this reality? The discussion on titling happens in binary. One camp tags the whole concept of clear property rights as a neoliberal agenda, and other pushes for its comprehensive and compulsory coverage. Unfortunately, the middle ground is absent. The experts who advocate the imposition of comprehensive titling with some mitigation policy (that prevents gentrification and displacement) do not represent the middle ground. People prefer recognition of their interest in the land, in the form of title or otherwise. Whether they need it or not, and whether it is beneficial for them or not, is a matter of debate. In this debate, the arguments have been turned either in favour of or against the property rights or land titling. The middle ground is neither explored nor argued by both sides. I introduced the term ‘Optimal Titling’ as the framing of choices matters (Tversky & Kahneman, 1981). In my opinion, the term ‘voluntary titling’ makes policymakers or general listener less receptive to the proposed solution. 8.3.1 Introduction of Voluntary Titling The middle ground Figure 12 depicts the benefits of introducing a public registry versus absence of it i.e. privacy regime. ( Arruñada, 2005) ( Arruñada, 2017).

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Figure 12: Choosing Between Private or Public Titling to maximise the social value of land ( Arruñada, 2017) The figure represents how the social value of land (vertical axis) is a function of the theoretical value of land without the title conflict (horizontal axis). Social choice of titling will be driven by costs and statistical distribution of the value of land parcels in the economy along the horizontal axis. Area G represents the potential gain from titling highvalue land and area L, the potential loss from overtitling lowvalue land. (This is a modified form of the model originally detailed in Arruñada and Garoupa (2005).

In Figure 12, if t he indifference point shifts to left, social gains from public titling (Area G) will increase. If the indifference point shifts to right, society lose because of overtitling of lowvalue land. As the value of a potential investment in land increases, the indifference point shifts to left. and society gain. If there is the less likelihood of conflicts related to land, the indifference point shifts to right and society would lose by introducing public titling as there is no need to do so. Initially, the term voluntary titling may seem like a compromise to the policymakers, however, “universal titling is only universal for the initial first titling effort, and all titling systems are de facto selective and voluntary” as subsequent transactions are reported only when landowner

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feels the need to do so (Arruñada, 2017). Therefore, implementation of voluntary titling does not require a change of prevailing laws that mandates compulsory registration of property transactions. Voluntary titling can also be understood merely as an intent to avoid overzealous imposition and enforcement of legal apartheid on the inhabitants of informal settlements in the delivery of public services. Voluntary titling regime facilitates titling instead of imposing it as done under a comprehensive titling regime. The comprehensive titling is practised due to wrong diagnosis of the cause of poverty, as Arruñada (Arruñada, 2012: 2) explained (emphasis added):

“The error comes from mixing up cause and consequence when assuming that informality is causing poverty instead of the other way around. This has led, for instance, to the building of universal land titling system that spend huge amounts to little effect….. .informality may be appropriate for low value assets.”

England first introduced compulsory registration in 1897. However, initially, land registry officers were opened only in big cities or urban areas, and compulsory registration was implemented only in central London (Sparkes, 2003: 13). Only by 1990, the system of compulsory land registries was applied to all counties in England and Wales by selectively and gradually extending the supply of titling services (Arruñada, 2017). Still, like GBP, the international agencies discard and dismiss the voluntary titling as “sporadic” while optimistically refer policy of universal coverage as “systematic” (Arruñada, 2018). 8.3.2 Using Transaction Cost to Move the point of indifference In Figure 12, the author assumes optimal taxation. To him, the point of indifference 56

internalises all the costs and externalities, and the model is static. However, I differ with his assumption of the existence of optimal taxation. I believe that most of the countries transition from one tax rates to other. Also, the externalities and other social costs of transacting a property may change over time. I believe the optimal titling is a preferred level of titling unique to each country. So, the transaction cost can be used to move the point of indifference (Figure 12) to regulate the 57

extent of titling as may be desired by the concerned country. Increasing the transaction cost will shift the indifference point to the right, and push many people to shift to informal transactions. While, lowering the cost would shift the indifference point to the right, and motivate more people to report property transactions. If a hypothetical country aims to achieve complete formality, policymakers may have to bring transaction cost below zero, i.e. pay monetary reward (instead of charging a fee) to the people for reporting property transactions. Also, in Figure 12, the social gain (G) and social loss (L) would depend upon the complex tradeoffs between revenue gain/loss and consequent externalities to the society.

56 This is based on several emails, I exchanged with Benito Arruñada, the economist and main proponent of the model. 57 Here, transaction cost includes official fees and other charges a person bears while formally transferring a property.

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However, the concept of optimal titling has many advantages over comprehensive titling:

1. Attitudinal change: The concept completely change the focus away from ‘containing’ or ‘preventing’ informality to setting a desired and sustainable level of formality. Any titling project would be judged on the basis of value it generates rather than chasing an absurd goal of complete formality.

2. Low cost In comprehensive titling projects, onetime investment is made in carrying out an extensive survey. This requires a large investment in infrastructure to achieve the scale that becomes redundant after the project is over. In optimal titling, “selective demand and selective supply of titling services may reduce fixed costs” and without any overstretching of resources.

3. Financially Sustainable In a comprehensive titling regime, transaction fees should be minimal to ensure registration of subsequent transactions. In optimal titling approach, a country can regulate the pricing of services provided by its land registries to target a level of formality suitable to it.

4. Flexibility unlike a goal of complete formality under comprehensive titling projects, in optimal titling regime, a country can regulate what rights, at what stage, at what cost, and by what process should be recorded.

5. Feasibility The policymakers generally prefer to be in command on the processes and projects. In comprehensive titling, everyone, including international donors, involved would generally feel in control and filled with missionary zeal. The optimal titling provides the freedom to drive the change that voluntary titling does not. Therefore, policymakers or decisionmakers are more likely to adopt this as a solution.

8.3.3 Creating a database for unique Identity of each property While quoting the foundation article by Ronald Coase (Coase, 1960:19), Benito wrote that “welldefined” property rights should specify at least who holds which rights on what property (Arruñada, 2018). When it comes to “ who holds which rights”, an individual himself decides to apply to the land registry to record his claimed rights, formal or informal. Irrespective of the nature of the right, through an established procedure, the land registry would accept or reject the claimed rights and record the same, with or without field verification. Hence, there is no need to carry out any sweeping onetime land survey to ascertain who lives where instead a continuous mechanism should exist to records the existing property rights. On the question of “ what property”, I have a different take and I propose a slight change in Arruñada’s approach of voluntary titling. His proposed model of voluntary titling does not clarify what happens if someone voluntarily prefers titling of even lowcost land in a country that does not have a cadastre such as in “recordation titling regime” (Arruñada, 2005). In an ideal situation, a land registry should be ready to register any piece of land. To do that, the government should have a comprehensive cadastre that uniquely identifies each property (Figure 13).

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Rwanda created such a database by georeferencing marked general boundaries on satellite imagery. In the absence of any records, Rwanda had to undertake a comprehensive field survey to create initial records, but the countries with existing land records can finish such exercise with GBP and orthophotos of satellite imageries, on a tabletop at a minuscule cost. Thus, the countries should create such a database of properties but without undertaking costly physical field surveys.

Figure 13: A Modified Version of Voluntary Titling 58

8.3.4 Integration of Existing Settlements A country can adopt its existing land ownership records after creating a unique property database. This linked database would be vital for the creation of clear property records. In the proposed model, inhabitants of the informal settlements would also be free to apply for recognition of their rights in land. The government would be free to recognise their rights as suitable for the country. The government should consider that land titles are required to promote trade in the land; however, tenure security is sufficient to promote investment in land (or housing) ((Arruñada, 2017) The above discussion is concerned only with the issue of land tenure. Like other land titling projects, and related studies, I am avoiding any discussion on formalisation or regularisation of the built environment. In 2019, even Rwanda stands at 106th rank in ease of dealing in building construction permits while having the 3rd best land administration in the world (World Bank, 2019b). The regularisation of informality in the built environment is the elephant in the room that no one wants to address.

58 Representative Images of ‘what property’ and ‘which rights’ sourced from Vector Stock (vectorstock.com)

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Chapter 9

Conclusion Rwanda is unarguably a role model (or even the best example) on how to implement a comprehensive land titling project. The reforms were highly inclusive especially from the perspective of gender justice. In July 2017, women exclusively owned 19% of the total parcels, while men owned 11 %; and men and women jointly owned 50 % of the total parcels (Ngoga, 2018). Even, the cost of the project ($6 per title) is amongst the lowest in the 59

world. Rwanda’s success mainly depends on the adoption of the general boundary principle (GBP). However, Rwanda also benefited from not having any existing records. Other countries may need to take some additional steps besides adopting general boundaries as they have to reconcile the new measurements with the existing records. International agencies also need to shed the mistaken impression that GBP is a subpar solution rather than getting influenced by ‘policy entrepreneurs’ (Kingdon, 1995). This subpar perception is forcing the developing countries to invest in costly and hightech solutions. Even Lithuania and Rwanda, with first and third best land administration, have abandoned GBP and slowly transitioning to the fixed boundary system. In my view, Rwanda should abandon this policy of transitioning to ‘fixed boundary’ system as many other countries, such as the UK, have top quality land administration without such a highcost solution. Rwanda is the second best in the ease of registering property and has the 6th lowest transaction fee; nevertheless, experiences a substantial number of informal property transactions. Still, many studies found even this transaction fee to be high and recommended its reduction or removal. The emergence of informality in Rwanda creates doubt over the sustainability of comprehensive titling. In principle, the land registry should be at least selfsustaining if not a source of revenue. However, Rwanda needs to open more land registries as the distance from the land registry also significantly influences a decision to report a property transaction. Rwanda already admitted financial unsustainability of its land registry. Opening of even more field offices of land registry will put additional strain. In my opinion, Rwanda should increase the transaction fee instead of reducing it, as recommended by many studies (Ali et al., 2017). The increased revenue would make the land registries more sustainable. Even with flawless project execution, until now, the impacts of Rwanda’s land tenure reforms are insignificant instead of transformational, as was expected. The data did not show any distinct rise in the number of business establishments or their formalisation. Maybe the project is still in its ‘development stage’. The extremely high growth in the reported property 60

transaction in 2018 supports this assumption.

59Nkurunziza, E, Implementing and sustaining land tenure regularization in Rwanda in (Hilhorst & Meunier, 2015) 60 In a press release in Feb 2019, Rwandan government accepted the project financially unsustainable but in development stage.

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In no way, Rwanda would have been better off without the land tenure reforms. The clear property records would undoubtedly support the cause of good governance as evident from ‘the biggest reformer’ tag and its overall high ranking in the EDB Index. However, the clear property rights may be a necessary condition but not a sufficient one to achieve high economic development stage. Also, the goal of complete formalisation of all property transactions does not seem financially sustainable or a right public policy. Therefore, a system that continuously recognises and reconciles the informality would be better over infrequent comprehensive titling projects. A country should target a financially sustainable level of formality in property transactions. The breadth and depth of the published work on such a mundane topic land administration surprised me besides enlightening. I still favour land titling, but now I do not see Informality as an abnormality that needs a cure. Policymakers should ‘facilitate’ formality rather than ‘preventing’ or ‘containing’ informality. In India, land registries are one of the most corrupt and hassling public offices. As a remedy, India should generate unique identity for every parcel of land, through a lowcost method of general boundary principle, without undertaking a grand survey; and allow everyone to report their claimed property rights voluntarily. In short, the land administration in India should aim to

identify every piece of land but not its ownership.

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http://ggim.un.org/meetings/GGIMcommittee/documents/GGIM5/land%20admin%20

and%20mngnt%20background%20paper%203.2%20final.pdf sourced on 5 April

2019.

UNSD UNGGIM. (n.d.). Retrieved from http://ggim.un.org/UNEGLAM/

UNHabitat/GLTN. (2009). Secure Land Rights for All. Nairobi.

Available at: http://mirror.unhabitat.org/pmss/listItemDetails.aspx?publicationID=2488

https://unhabitat.org/books/securelandrightsforall/

World Bank. (2007). Doing business 2008 . (2007). World Bank.

World Bank. (2019a). Doing Business 2019: A Year of Record Reforms, Rising Influence.

(n.d.). Retrieved from

https://www.worldbank.org/en/news/immersivestory/2018/10/31/doingbusiness2019

ayearofrecordreformsrisinginfluence

World Bank. (2019b). Doing business 2019: Training for reform: Comparing business

regulation for domestic firms in 190 economies . (2019). World Bank.

69

http://ggim.un.org/meetings/GGIM-committee/documents/GGIM5/land%20admin%20and%20mngnt%20background%20paper%203.2%20final.pdf

http://ggim.un.org/meetings/GGIM-committee/documents/GGIM5/land%20admin%20and%20mngnt%20background%20paper%203.2%20final.pdf

http://ggim.un.org/UN-EG-LAM/

http://mirror.unhabitat.org/pmss/listItemDetails.aspx?publicationID=2488

https://unhabitat.org/books/secure-land-rights-for-all/



Appendix A

A Sample Title Plan, England 61

61 Retrieved From the official website of HM Land Registry on 2nd May 2019. Find a property. (n.d.). Retrieved from https://eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do

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Appendix B

Data on Number of Reported Property Transactions*

District Transaction 2018

Transaction 2017

Transaction 2016

Transaction 2015

Transaction 2014

Bugesera 20016 8077 3046 1809 840

Burera 8482 2579 1300 369 284

Gakenke 20425 1185 745 381 48

Gasabo 23004 10459 4525 6590 2887

Gatsibo 10852 1586 1057 433 108

Gicumbi 25128 1381 801 548 197

Gisagara 1391 705 199 189 64

Huye 5015 1931 1110 1162 281

Kamonyi 9870 4084 1666 1896 683

Karongi 12145 1921 500 332 108

Kayonza 7286 1993 1431 1116 352

Kicukiro 18587 6949 3387 6397 3146

Kirehe 5573 1797 630 366 119

Muhanga 17389 2098 954 571 268

Musanze 18260 4542 2893 2338 1203

Ngoma 3461 1763 661 418 144

Ngororero 7748 1399 768 314 60

Nyabihu 7717 3051 1441 469 181

Nyagatare 9064 2914 1217 894 432

Nyamagabe 18937 1543 600 418 396

Nyamasheke 9092 2332 1025 380 128

Nyanza 2916 936 925 554 180

Nyarugenge 6260 2956 1315 1927 806

Nyaruguru 34839 934 3321 322 91

Rubavu 8788 4867 1574 1718 642

Ruhango 31648 1465 1045 201 194

Rulindo 24008 1437 876 571 113

Rusizi 5139 2119 970 805 250

Rutsiro 3467 1728 1254 1025 136

Rwamagana 20747 5699 2901 2205 843 *Data compiled from the different statistical reports of Rwanda land management and land use authority as available on their website https://rlma.rw/index.php?id=265 . I processed the 2016 data as annual as it is wrongly titled as quarterly.

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https://rlma.rw/index.php?id=265



Appendix C Data on Urbanisation and Formalisation

District Population * Urban * Rural * Urban% Formal 2011 **

Formal 2014 **

Formal 2017 **

Bugesera 361914 28786 333128 8.0 3172 5,154 6,416

Burera 336582 6205 330377 1.8 3540 3,756 4,512

Gakenke 338234 9347 328887 2.8 3310 3,881 4,377

Gasabo 529561 365371 164190 69.0 9520 11,966 15,793

Gatsibo 433020 23914 409106 5.5 1842 4,283 4,686

Gicumbi 395606 34544 361062 8.7 5154 4,995 6,250

Gisagara 322506 5011 317495 1.6 1801 2,453 2,515

Huye 328398 52768 275630 16.1 2977 4,357 4,463

Kamonyi 340501 39035 301466 11.5 3273 4,473 5,893

Karongi 331808 22756 309052 6.9 3400 4,308 4,664

Kayonza 344157 34008 310149 9.9 2611 3,735 5,082

Kicukiro 318564 279941 38623 87.9 9520 7,831 11,103

Kirehe 340368 10083 330285 3.0 3206 3,940 5,634

Muhanga 319141 50608 268533 15.9 4534 5,789 7,267

Musanze 368267 102082 266185 27.7 6367 6,447 8,775

Ngoma 336928 15236 321692 4.5 3518 3,858 4,503

Ngororero 333713 12245 321468 3.7 3134 4,018 4,820

Nyabihu 294740 40673 254067 13.8 2416 3,493 3,920

Nyagatare 465855 47480 418375 10.2 4151 5,855 6,404

Nyamagabe 341491 24946 316545 7.3 2892 4,103 4,683

Nyamasheke 381804 6137 375667 1.6 2557 4,178 4,774

Nyanza 323719 25417 298302 7.9 6978 3,197 3,833

Nyarugenge 284561 214020 70541 75.2 12191 11,971 15,665

Nyaruguru 294334 5922 288412 2.0 2260 3,132 3,470

Rubavu 403662 149209 254453 37.0 5319 6,426 8,744

Ruhango 319885 26059 293826 8.1 2899 3,355 3,968

Rulindo 287681 8630 279051 3.0 2676 3,593 4,424

Rusizi 400858 63258 337600 15.8 4781 5,090 6,534

Rutsiro 324654 7034 317620 2.2 2898 4,037 4,803

Rwamagana 313461 26959 286502 8.6 3327 4,702 5,892 * National Institute of Statistics of Rwanda (NISR). Ministry of Finance and Economic Planning (MINECOFIN) [Rwanda], 2012 . Rwanda Fourth Population and Housing Census. ** National Institute of Statistics of Rwanda (NISR), The Establishment Census, 2011, 2014, and 2017

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Documents

Measurement Strategy for Successful Land Reforms in Rwanda