# **1. Introduction**

Secure and transferable land rights have long been considered a precondition for economic development: They incentivize land-related investment; facilitate operation of land rental and sales markets so that land can be used most effectively to support structural transformation; and allow land to be used as collateral for credit, deepening financial markets: secure and registered property rights that stimulate investment in urban density are essential to harness benefits from urban agglomeration and capture the associated increases in property values. Having property rights documented also makes it easier for vulnerable groups like women to enforce their rights against competing claims, amplifying their voice and risk-taking and reducing the need for wasteful spending on disputes.

Although land titling—or more specifically the subsidized systematic first registration of rights in land— has long been advocated to increase credit access by transforming dead assets into ‘live capital’ (de Soto 2000), evidence of such effects is still minimal. One reason, we explain, may be that for many countries property registries have been a low priority. To understand why, note that properly designed<sup>1</sup> titling programs will increase registry coverage only. Insofar as this clarifies assignment (e.g., by helping to resolve current disputes) and simplifies enforcement of rights (e.g., by providing owners with a written document that can be presented in court), titling is likely to increase tenure security and land-related investment. If done in a gender-sensitive way and under a legal framework of gender equality, it will also empower women socially.

Titling will, however, stimulate the operation of land markets and allow land to be used as collateral for credit only if a registry provides authoritative information on property rights freely and allows transfers or encumbrances of rights to be registered or pledged land to be foreclosed in case of default without incurring prohibitive transaction costs. In situations where unaffordable registration caused limited coverage with registered rights (and thus demand for titling) in the first place, land titling will be sustainable or improve land and credit market operations only if preceded or accompanied by legal, regulatory, and institutional reforms (‘policy’ reforms) to reduce such costs. The volume of registered land transactions can indicate whether such reforms are effective and whether titling programs achieved their social and economic objectives sustainably.

To illustrate how these principles can inform empirical analysis, we use the Lesotho Land Administration Reform Project (LARP) in Maseru in 2010–13, supported by the Millennium Challenge Corporation. The goal of LARP was to improve registry operation through policy reforms and increase coverage of registered land rights through systematic first registration of land rights. We use registry data from 1981–2019,

> 1 _Proper design_ means that accepted rules on how to prioritize between competing claims are in place, and that potential claimants are sufficiently aware that they can protect themselves from abuse by powerful or well-connected individuals.

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