State capacity to provide property titles is limited in developing countries. Evidence from Tanzania suggests that community information on the willingness-to-pay for titles can help low-capacity governments determine fees and improve property titling in cities.
Africa is urbanising rapidly, putting pressure on governments to provide urban services that will help manage this growth (Henderson and Turner 2020). One of the fundamental services that a strong state provides is the protection of property; however, in lower-income countries, the state’s ability to deliver public services, including the provision of formalised land with statutory property titles, is limited by its relatively weak fiscal capacity (Besley and Persson 2009). Hence, raising the state’s fiscal capacity can help it achieve its objectives.
One way to raise state capacity is by leveraging complementarities with local institutional capacity (Henn 2023). A centralised government body often has less information about a community than do its members, limiting the effectiveness of the state. Governments can increase their capacity by working cooperatively with communities. For instance, research on the Democratic Republic of the Congo has found that property tax collection can be improved by delegating to local community leaders rather than government officers (Balan et al. 2022). Additionally, evidence from Indonesia suggests that community members and local elites can target subsidies to poor community members almost as well as a proxy means test (Alatas et al. 2012).
How can local community knowledge be used to improve the delivery of property titles?
Many landholders in cities in developing countries choose not to acquire title deeds even when they are eligible, possibly hindered by the fees set by the government. When fiscal capacity is weak, fees are essential to financing public projects. In the absence of additional financing, states cannot simply set low fees to increase uptake.
Community information, however, can be used to determine more appropriate fees to finance public projects. With a fixed budget, governments can increase uptake to the extent that they are able to price discriminate, that is, by targeting fees to willingness-to-pay. However, as willingness-to-pay is not well observed by the state, the local community may be better at estimating it.
In a recent paper (Manara and Regan 2025), we explore the extent to which title deed fees are a constraint to title acquisition, and whether governments can improve uptake by using local community information to more effectively determine fees. We study this using two field experiments in a suburban community of Dar es Salaam, Tanzania.
What is the demand for title deeds in urban Tanzania?
Our study was conducted in the Kimara ward of Dar es Salaam, where only 13% of properties acquired titles after three years, and the median fee was USD$230 (almost three times the median monthly salary). To determine the extent to which these fees constrained uptake, we elicited the demand for land titles from a sample of landholders using the Becker-DeGroot-Marschak method (Becker et al. 1964). This method asks respondents for their willingness-to-pay and then draws a random price; if the price is below the bid, they purchase at that price, otherwise they continue to face the full price. This provides an incentive to reveal the truth, as respondents incur the possibility of paying more if they bid too high, while bidding too low risks not being able to acquire the title deed.
Using this method, we elicit individual willingness-to-pay and plot the aggregate demand curve for our sample in Figure 1. Although the full sample of plot owners were not willing to purchase a title deed at their invoiced price, there is still significant demand. Over 40% of plot owners were willing to pay $85, roughly equivalent to the median monthly household income; however, this is still well below the invoice fees that are currently being charged. Even if all plots were charged the minimum invoice value observed in our sample, approximately 50% of plot owners would still not acquire a title deed.
Figure 1: Elicited demand for title deeds
Elicited demand for title deeds
Elicited demand for title deeds
Can local leaders predict the demand for title deeds ex-ante?
While the Becker-DeGroot-Marschak method allowed us to elicit demand, it cannot be used as a policy tool as it is expensive to implement at scale. Local leaders, however, may have information about willingness-to-pay that they are willing to share.
To test this, we asked local leaders to predict what each property owner would pay for their title deed, after randomly assigning them to three different treatment groups:
Control: Leaders were assured that their responses were for research purposes only and had no effect on the discounts property owners could face.
Stakes: Leaders were told that if they state a low willingness-to-pay for an individual, they will be more likely to receive a discount.
Incentives: Leaders are told the same as above, and that they also have the chance to win a prize if they are better able to predict than other leaders.
In the control group, local leaders are remarkably good at predicting the distribution of willingness-to-pay (Figure 2) and can also distinguish variation across individual landholders. Leaders share less accurate data when their responses may affect the likelihood of a landholder receiving a discount (stakes treatment), but small cash rewards for accuracy can mitigate this (incentives treatment).
Figure 2: Elicited demand for title deeds and leader predictions (control group)
Elicited demand for title deeds and leader predictions (control group)
Elicited demand for title deeds and leader predictions (control group)
Can leader information be leveraged to improve the uptake of title deeds?
Currently, title deed fees are determined using a formula based on the size of the plot. We show that, using only the size of the plot, the state can re-calibrate parameters using leaders’ information to improve their formula. In one exercise, we show that the leader-based formula can increase the uptake of title deeds from 13% to 70%, while raising the same amount of revenue in fees.
Overall, there are significant benefits to increasing the rate of titling. We find that mistargeted fees are a major contributor to the low uptake of title deeds. We also explore two further potential contributing factors. First, 18 months after our study, around half of the land titles that had been paid for were still not officially allocated. These delays were due to mistakes in the land registration process that needed to be rectified. Landholders were aware of such delays, likely dampening their willingness-to-pay.
Second, in a companion paper (Manara and Regan 2024), we interviewed a sub-sample of landholders about the dimensions of property rights they valued most. We found that landholders valued plot demarcation to protect their boundaries; however, this is implemented before the title deed stage and does not affect their demand for title deeds. They also perceive significant benefits from titles, particularly in strengthening inheritance and compensation rights, but prefer to wait to pay for it until the need arises. A mismatch between the large upfront costs and delayed benefits of land titles contribute to low demand. Future research on the other dimensions of property rights will be important to understanding the tenure transition in rapidly growing cities of developing countries.
References
Alatas, V, A Banerjee, R Hanna, B A Olken, and J Tobias (2012), “Targeting the poor: Evidence from a field experiment in Indonesia,” American Economic Review, 102(4): 1206–1240.
Balan, P, A Bergeron, G Tourek, and J Weigel (2022), “Local elites as state capacity: How city chiefs use local information to increase tax compliance in the D.R. Congo,” American Economic Review, 112(3): 762–797.
Becker, G M, M H DeGroot, and J Marschak (1964), “Measuring utility by a single‐response sequential method,” Behavioral Science, 9(3): 226–232.
Besley, T, and T Persson (2009), “The origins of state capacity: Property rights, taxation, and politics,” American Economic Review, 99(4): 1218–1244.
Henderson, J V, and M A Turner (2020), “Urbanization in the developing world: Too early or too slow?” Journal of Economic Perspectives, 34(3): 150–173.
Henn, S (2023), “Complements or substitutes? How institutional arrangements bind chiefs and the state in Africa,” American Political Science Review, 117(3): 871–890.
Manara, M, and T Regan (2024), “Unbundling tenure security and demand for property rights: Evidence from urban Tanzania,” Urban Studies, 61(11): 2080–2098.
Manara, M, and T Regan (2025), “Ask a local: Improving the public pricing of land titles in urban Tanzania,” Review of Economics and Statistics, 107(1): 188–203.