Two strategies and one path towards land titling

The empirical evidence on the effectiveness of projects seeking to improve land tenure has shown that titling has positive effects on income generation (average increases of 15%); increasing agricultural productivity by 40%; and promoting empowerment of women in economic decision-making (up to 17%). These improvements in income, productivity and women’s empowerment are also associated with improvements in food security, although the effects on this last variable have been less studied.

The literature also shows that these projects increase the perception of land tenure security and in fact, reduces conflicts, increasing agricultural investment in soil conservation, agroforestry and the use of inputs. Although the argument to invest in titling and cadaster is clear, there is no consensus on what the best mechanism is to carry out the implementation of this type of projects, which are quite complex.

For example, during the design of the land titling project in Peru, a crucial decision had to be made: continue with the direct execution strategy implemented through Regional Governments (GORE) or contract specialized companies for outsourcing. In this case, the decision was framed in the regulation, which indicates that competence to carry out the titling process belongs to the GORE, which is the national strategy since 2008. However, during project design, it was decided to outsource this activity to the private sector. But why was this decision made? First, we must mention that direct execution by the State have many benefits, as has been demonstrated in the case like Bolivia:

• There is an empowerment of national and local authorities;
• There is greater flexibility to make changes in the planning and adapt it to the in-field realities;
• Works can start immediately as the funds are available;
• Activities can start independently from availability of external financing resources.

It could be argued that the benefits of direct execution are at the same time the weaknesses of outsourced execution, and the disadvantages of direct execution can be considered the benefits of outsourcing

• Greater control of technical quality project-wide;
• Independent quality control;
• Contracts with clear goals in defined times, with simplicity and administrative transparency.

These benefits were the ones that convinced the Government of Ecuador to use outsourcing in its SIGTIERRAS program, and the Government of Guatemala for the titling of rural lands and protected areas. However, the most decisive factor in decision-making for any government should be the unit cost, either by title or by area. This is the great dilemma because in the case of direct execution, annual and fixed budgets of the GORE, show that direct execution can take a long time (per unit) and there is no possibility to optimize targets different to those initially set if there is no planned ex ante budget. On the other hand, the administrative costs and fixed costs of specialized private companies raise the unit price, so its benefits are more evident when there is a significant number of titles.

When comparing these two strategies, considering only the unit cost is not enough, we should also consider the time required for cadaster and registration. This can help governments choosing the most efficient strategy. Finally, it is fundamental to perform an analysis to find what are the differences between the two options, and if it is minimal (or statistically not significant), then the goal set can be achieved regardless of the method.

The IDB has developed land titling projects in many countries in the region, including Ecuador, Haiti, Peru, Paraguay, Belize and Bolivia. The processes of implementation and evaluation of these projects suggest that each context is different and, therefore, there is no single solution. Each case must be analyzed independently considering the institutional strength, accounting for costs and benefits, analyzing supply and demand of land titling services, evaluating the available information systems, etc. Only in this way can we design and implement projects that are appropriate to each specific situation and that generate greater impacts.