Other means of promoting financial intermediation (such as non-pricing factors including encouragement of bank branches, advertising, banking literacy campaigns and development of supporting infrastructure for financial development) notwithstanding, land registration and collateral play an important role in supporting financial intermediation.

# **(iii) Land Liquidity, Deposit Mobilization and Investment Linkage**

Land registration supports financial development through yet another linkage: transformation of land into a liquid asset thereby unlocking the resources embedded in it for use directly in investment or indirectly through financial intermediaries. Land registration enhances liquidation of land by making it securely and efficiently transferable through the land market. To unlock the resources in land, the landowner can do so either by selling, leasing, exchanging (battering), pledging or mortgaging land. As all these transactions involve asymmetries in information between contracting parties, the information supplied by the land registration system enables both parties of the contract to have the same information about the land, easily obtained in one place in the land registry. In addition, ownership information is guaranteed by the state.

As a result of land becoming securely and efficiently transferable, land transactions take place at low cost, quickly and securely. Consequently, the resources embedded in land flow fairly freely away and back into land. Moreover, these unlocked resources become more divisible. With the free flow of land resources and in highly divisible units, the landowner is availed a wide spectrum of investment choices including direct investment and purchase of investment instruments such as those offered by credit, stock and insurance markets.

The resources locked up in land are huge. According to the World Bank (1989), "in most countries, real estate [including land] accounts for between half and three-quarters of national wealth" (p.87). For example, in UK, land and buildings were estimated to comprise a total of 57% of the national wealth in 1997 (Callander and Key, 1997) while in the United States, real estate (including land) was estimated to represent almost 70% of all tangible capital in 1993 (Jaffee and Renaud, 1996, op. cit.), and the taxable value of real property in the USA were estimated at nearly US$6 trillion in 1991 (Jeffress, 1996). In Bangkok alone, the capital city of Thailand, a conservative estimate put the value of real estate at 45% of the country's GDP in 1997 (Renaud et al., 1998). Liquidation and mobilization of the wealth embedded in land and real estate can considerably boost financial development, aggregate investment and economic growth. To mobilize the locked-up resources in land, land registration is necessary to underpin the transactions.

# **(iv) The Land Markets, Transactions and Investment Efficiency Linkage**

Many investments in the economy involve land. Real estate involves land directly while other investments that take place on the surface or below the surface, be it in agriculture, forestry, fishing, industry, mining, construction or services use land either directly or indirectly. Hence, the cost, speed and convenience with which land is acquired contribute to the level of efficiency of the investment in question. We have already noted above that land registration provides the necessary information to overcome the asymmetries in information available between two contracting parties 10