The Welfare Impacts of Land Titling in Laos

To what extent does gaining access to secure land titles improve the chances of participating in economic growth? What are the intra-household impacts of land titling when women are purposely targeted as beneficiaries? These are some of the questions underlying a collaborative research project being undertaken by academics at the University of Sydney, University of Wisconsin-Madison and the National University of Laos.

Background and rationale

Large areas of untitled land have been fenced off for plantation development in southern Laos

The creation of land markets, of which land titling is a crucial step, holds the promise of expanding the choices of the beneficiaries: titled land can be used as collateral, allowing its owner to overcome exclusions from credit markets. This may be especially valuable for the poor, as they are the most commonly credit-constrained.

Not much is known about whether such expectations become reality and, if they do, whether they succeed in the same way and through the same channels to everyone. Can secure property rights lead to higher investment on parcels? Who is in better position to take advantage of access to credit in new (and, presumably, better) conditions once collateral is created? Do programs with these characteristics build markets (by encouraging the deepening of financial markets) or need to be augmented by previous efforts to create those markets? Is increasing landlessness, if it exists, a bad thing – or simply reflects people moving out of agriculture into different activities?

Answering these questions matters for policy, in terms of designing the correct mix of policies that complement changes in land status and of targeting priority regions for such programs. It matters for politics also, as these answers can significantly improve the public debate about how to change the policy environment, especially during processes of transition towards a heavier reliance on decentralised mechanisms of economic governance.

Land titling in Laos

Boundary post marking titled land plot

Lao PDR is still a very poor country that is simultaneously growing at a fast rate and in transition towards the institutional framework of a market economy. Up to 2005, the Land Titling program led to the registration of more than 400,000 land parcels, belonging to more than 300,000 households and, just between 2003 and 2005, almost 10% of the titles were sold or mortgaged. This dynamism makes it an ideal case-study to understand how secure access to land may create conditions for households to participate in the opportunities created by wider economic transformations.

Finally, the program, with the collaboration of the Lao Women’s Union, specifically targeted women as recipients of information regarding their rights to land and, currently, 28% of all land parcels are titled to women only (against 20% in the name of a man only, 40% in the name of the couple and the remainder to the state). This raises the possibility of identifying the intra-household effects of changes in the legal status of land.

Research activity

Mapping exercise with villagers during the qualitative survey

The main objective of this project is to evaluate the welfare impacts that can be linked to the implementation of a land titling program. The Lao Land Titling program is an ideal setting to evaluate this type of intervention.

The research is in two parts. The first part, which was substantially completed during 2008-2009, is a qualitative survey identifying key issues in land titling in different parts of the country. This part examines land titling in the wider context of land tenure and village livelihood arrangements.

The second part is a broad-scale quantitative survey that compares 30 villages with land titling and 30 villages without. The two-phase survey examines changes in welfare in villages with and without titling to measure welfare impacts that can be attributed to the program.

Researchers

Dr Paulo Santos, Agricultural and Resource Economics, University of Sydney
Professor Philip Hirsch, Australian Mekong Resource Centre, University of Sydney
Professor Michael Carter, Agriculture and Applied Economics, University of Wisconsin-Madison
Assoc. Prof. Silinthone Sacklokham, Rural Economics and Agribusiness, National University of Laos

Funding body

AusAID (Australian Development Research Awards)

Project duration

February 2008 – October 2011