# **2. Background and program characteristics**

A growing body of literature argues that the extent to which Africa’s urbanization will contribute to growth of productivity and welfare will depend on the functioning of urban land markets. While efforts to improve their functioning often focused on systematic titling, this is a necessary but not sufficient condition. Without policy reform titling may not be sustained whereas in a more conducive policy environment, people will acquire title by themselves. Failure to address regulatory and institutional factors underpinning high barriers to land registration could thus potentially lock cities in a vicious cycle of urban informality. As it combined legal and institutional reforms -including major advances on women’s rights- the program to be analyzed here allows us to separately analyze the impact of these components.

# **2.1 Conceptual issues and link to the literature**

Having long lagged other regions in terms of urbanization, Sub-Saharan Africa is now undergoing a process of rapid urbanization (Henderson and Turner 2020) that is predicted to more than triple its urban population by 2050 (Collier 2017). The pace and nature of this process together with much lower levels of per capita income than in other regions at similar levels of urbanization (Henderson and Kriticos 2018) imply that Africa’s urbanization poses enormous challenges. In light of the durable nature of any investments, the way in which cities are built will determine the potential and nature of economic growth in Africa for decades. Successful urbanization would allow penetration of global markets (Venables 2017) to create productive jobs (Chauvin _et al._ 2017). Failure, on the other hand could create unproductive and non-competitive cities where large parts of the population are stuck with low-quality buildings and poor service provision (Bird _et al._ 2017) together with attempts at private provision of key public goods by the affluent leading to residential segregation and social polarization.

Impersonal land markets and the institutional infrastructure to support them (Arrunada 2012) are critical to building vibrant and productive cities in several respects (Lall 2017). First, they are needed to bring land to its best use rather than having it locked up in slums or uses that, while consistent with political objectives, may have hugely negative welfare impacts.<sup>1</sup> Second, by facilitating use of land as collateral (Besley and Ghatak 2010), land markets can facilitate credit access to build durable housing stock that can support dense settlement to lower the cost of service delivery (including for transport) and cities’ carbon footprint. Third, property registries and cadasters provide the data needed for property taxation to encourage efficient land use and generate local revenue, thereby encouraging a virtuous cycle where tax collection, service provision, and higher property values reinforce each other and in doing so have the potential to strengthen

> 1 For example, in Nairobi, overcoming frictions to land reallocation would yield gains amounting to about thirty times annual rental payments per slumdweller even after all relevant parties have been compensated (Henderson _et al._ 2020).

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