the cost of land registration in Africa are higher than in any other region.<sup>3</sup> Many countries’ systems seem stuck in a vicious cycle where outdated procedures -often dating back to colonial times- and limited use of information technology (IT) increase costs of service delivery to a point where many potential beneficiaries can no longer afford getting their rights -or changes in their rights- registered. Limited interoperability then often further reduces titles’ value and banks’ ability to use them as trustworthy evidence of actual rights that can be accepted as collateral.<sup>4</sup> Breaking this cycle and improving land market functioning will require regulatory and institutional reforms to make registration more affordable. This would eliminate barriers to formalizing transfers (or mortgages) for parcels that had already been registered while also encouraging owners to register parcels via existing channels, a process often referred to as sporadic registration. While the importance of regulatory reforms is widely acknowledged and has led to inclusion of policy reform components in most titling programs, the lack of rigorous assessment of either outcomes or impact of such reform is an important knowledge gap; in fact, we know of no quantitative analysis assessing the impacts of regulatory reforms or its interaction with systematic title issuance.

# **2.2 Program description and evaluation strategy**

To help close this gap, we use the US$ 20.5 million Land Administration Reform Project (LARP) that was part of the Millennium Challenge Corporation’s (MCC) 2008 to 2013 Lesotho Compact. Project activities focused on first time systematic land registration to create a basis for land markets and legal, regulatory and institutional reform to improve the functioning of urban land and financial markets.<sup>5</sup> The systematic land registration/titling component -which accounted for most of LARP spending- aimed to issue 90-year leases essentially free of charge to some 55,000 land plots from informal settlements in urban and peri-urban areas of Maseru, a city of some 300,000 inhabitants. The remainder of program resources was devoted to a subcomponent supporting legal and institutional reforms to enhance effectiveness and efficiency of land service delivery to reduce the cost of registering land transfers and mortgages and to improve women’s access to land rights through passage of a new Land Act and associated regulations as well as establishment of a new Land Administration Authority (LAA) in 2010.

> 3 Data from the registering property section of the World Bank’s ‘Doing Business’ indicators shows that registering a land transfer in Africa (a lower bound for first time registration) still costs close to 8% of land value, a figure that changed somewhat since 2005 (Deininger _et al._ 2020a). 4 Applicant characteristics such as having a stable income as well as the benefit stream from the proposed use of borrowed funds will be the main factors affecting whether or not they will receive a loan. However, if there is a non-zero risk of default, a lender’s willingness to lend funds to applications will be affected by _pV_ - _f_ where _V_ is the value of land owned, _f_ a fixed foreclosure cost _f_ , and _p_ the likelihood of finding a buyer. 5 To avoid confusion between first and second registration, we refer to first registration (either sporadic or systematic) as ‘titling’ or ‘issuance of a title/lease’. The subject(s) of this transaction are referred to as ‘owners’ although technically they are leaseholder(s).

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