Home Articles Cadastre: A catalyst for economic growth

Cadastre: A catalyst for economic growth

Bryn A Fosburgh
Vice President, Trimble

Secure rights to own and use real property are a cornerstone of wealth in developed nations. Research has shown that developing nations can obtain positive results by implementing land information and titling systems

Around the world, billions of people reside on land they do not own or have legal rights to occupy. In some cases, they may have permission of the state or landowner to use the land, but do not have a long-term guarantee of the right to use the property. As a result, these residents have little incentive to invest in property improvements. In rural areas, a farmer who has no tenure or assurance of access to land is unlikely to install irrigation or other systems. In urban areas of developing countries, the absence of defined property rights is a common factor in slums and barrios, where residents invest little or nothing in land improvements.

In many of these situations, it is nearly impossible to gain secure title to land or real property. The reason for this lies in the lack of mechanisms that can reliably describe land and its ownership. For example, the boundary of a parcel may be poorly defined (if it is defined at all) and known only by general reference to natural features. Within families or clans, ownership of the land may be assigned and transferred with little documentation and is often subject to dispute. In some areas, people may have so-called usufructuary rights to occupy real property owned by others. But frequently, these rights carry no secure or transferable financial benefits and the rights often disappear once the grantee dies or moves away.

Clearly, if the risk of being pushed off the land is high, then there is no incentive to invest or improve.

In the 2000 book “The Mystery of Capital,” Hernando de Soto presented the theory that a unified legal system of property rights is the catalyst that releases the capital value of land. By comparing the experience of western nations with that of developing countries in South America, de Soto demonstrates that secure title and valuation of land and property are fundamental drivers to economic stability and growth. The success of the west comes in part from centuries-old systems for gathering, managing and sharing information about real property.

There is strong empirical support for de Soto’s theory. In its International Property Rights Index 2009 Report, the Property Rights Alliance provides an analysis based on the quality of a country’s land definition and ownership systems together with the system of legal protection that reinforces the ownership. The report’s lead author, Anne Chandima Dedigama, illustrates the positive relationship between land titling and a country’s economic strength or gross domestic production (GDP). The report reveals that even small countries that have strong land titling and information systems tend to have greater wealth than larger countries where these systems are lacking.

In a separate study, Sebastian Galiani and Ernesto Shargrodsky researched the effect of property titling and ownership within the San Francisco Solano barrio near Buenos Aires, Argentina. Their data showed how poor households with full property rights differ from nearby homes that have only usufructuary land rights. The study found that full property rights resulted in substantially increased investment and improved living conditions. It also found that families with property rights were smaller and relied less on the presence of extended family members. Education for the children in these families tended to be higher. The study concluded, “In sum, entitling the poor increases their investment, both in the house and in the human capital of their children, which will contribute to reduce poverty of the next generation.”

Dedigama agrees: “When a property has value, it affords the owner an opportunity to participate in the economic process through successful entrepreneurial and/or agricultural activities. Property changes into an incentive for the owner to engage in work which enhances and contributes to the economy. With the recognition of property rights and due process which affords it marketability, an individual will become a participant in the production cycle that creates profit and/or loss, which in return contributes to the economic growth and raises the standard of living. This kind of economic empowerment spreads beyond a nation to link countries at a common ground, i.e. the international market.”

Releasing the value of property provides benefits to more than just the individual property owners. In sub- Saharan Africa, municipal and metropolitan authorities face debilitating challenges, often due to lack of money. The lax, or even nonexistent tax base can be attributed to the lack of functional cadastres. When the land is described and titled, its value is not just released to the owner. The land can also be assessed and taxed to provide funds for local growth and investment. Thus, the fundamental role of the cadastre in economic development is clear: The cadastre gathers, manages and shares info that defines and reinforces property rights. In turn, the property rights translate into economic development, social stability and physical well-being.

A large percentage of land information is based on spatial data, with maps and diagrams playing the key role. Although some form of cadastre exists in many developing regions, the information has evolved and coalesced from multiple, often haphazard systems. Paper records, often incomplete and poorly organised, make up a large percentage of the cadastral database in many regions. Information cannot be verified, shared or compared against other systems and thus does not satisfy requirements of financial institutions to release the capital value of the land. Cadastres may be fragmented as well, with bits of related information held by different agencies in different locations. This introduces cost and complexity in gaining rights to property, which hits hardest on the poor. De Soto describes how it required 728 steps for a poor person to obtain a title for property near Lima, Peru. In contrast, a wealthy person has the means to navigate the regulatory maze, bypass delays and avoid high fees.

Modern cadastral systems can replace the old methods in a sustainable, cost-effective manner, and digital information is quickly replacing paper maps and records. In digital format, records are more easily protected against fire or destruction and can be indexed for access by search engines and land information databases. This can help to detect ownership conflicts and track usage agreements attached to parcels. A central or regional database based on a geographic information system (GIS) is a common, highly effective platform for managing cadastral information. Within a GIS, a series of layers can be customised to handle cadastral information. These layers provide accurate, secure records of the description, ownership and usage rights for parcels. A parcel’s chain of title can be traced and managed, which eliminates a source of risk for financial investors and makes it easier to release the property’s capital value. The land information system can link cadastral data to other attributes as well. For example, spatial and numerical information on topography, environmental conditions, land use and natural resources can be linked to the graphical depictions of real property.

In many countries, land rights were tied to informal, paralegal processes that evolved over time and did not provide secure ownership. Cadastral information must be accurate and based on local conditions. Consider the lessons learned from the 1962 Ghana Land Registry Act. In a paper at the XXIII FIG Congress in 2006, Rebecca Sittie said that many challenges in Ghana’s deed registration system arose from weaknesses in land descriptions. “Most plans attached to the deeds were more descriptive in nature because lands were not properly surveyed and demarcated. These inaccurate plans or maps often created conflicts among landowners. Because registration was based on the deed and not on the land it led to multiple registrations for the same piece of land. There was no system to detect multiple registrations.”

The accurate spatial information needed for a successful cadastre comes mainly from field data. In order for property descriptions to be consistent, the information gathered by surveyors and mappers needs to have a common geographic reference frame to prevent gaps and overlaps between parcels. A typical mature cadastre includes defined practices for relating parcels to the reference frame. Common approaches include standardised wording and description of cadastral points and lines, relationships to adjoining parcels and accuracy and precision of positions. In developed countries, the reference frame is provided by a system of defined geodetic coordinates as manifested by physical monuments.

The requirements for physical positioning in a cadastre create unique opportunities in developing countries. In many regions, existing systems of geodetic control are incomplete or outdated. The effort to update or re-establish the framework introduces costs, delays and inaccuracy into efforts to create a modern cadastre. To solve this, a country or region can establish a geographic reference framework by installing a number of Global Navigation Satellite System (GNSS) receivers to serve as geodetic reference stations. The location of each continuously operating reference station (CORS) can be precisely determined and the resulting network provides a single, consistent basis for positioning across the country.

Because of the speed, accuracy and cost effectiveness of GNSS reference stations, they have emerged as the enabling technology for new or greatly improved cadastral information systems. Surveyors and mappers can use the information from the GNSS stations to capture positions on cadastral markers, natural features, local monuments and other objects that define property boundaries. This approach works well across an array of property types. Work in urban or other high-value regions may call for position precision of a few centimetres. In agricultural or rural areas, precision at the decimetre level may be sufficient. And for environmental and natural resource studies, metre-level positioning is common. Because all the positions are tied to the GNSS reference stations, independent field observations can be traced and verified.

India has a legacy of well-organised land records and administration that originated during British rule. This foundation has put the country ahead of other developing regions with little or no cadastral background and there is little resistance to the concept of a cadastre in India. But after India gained independence from Great Britain in 1947, responsibility for land administration transferred from the national level to the state governments.

In a 2001 report, McKinsey & Company stated that most land parcels in India are subject to some degree of dispute. Uncertain ownership creates difficulties to purchase and transfer land. The problems also create ambiguous and inefficient tax bases. Because municipalities have no clear idea of the ownership and value of real property, they lack the ability to finance new infrastructure and to recover the costs of existing facilities. According to McKinsey, cadastral inefficiency restricts growth of the country’s GDP by an estimated 1.3 percent each year.

The problem is not lost on financial and political leaders. In a 2007 review of India’s land policies, the World Bank reported: “As land administration – through the revenue department – was the core of the colonial structures and continues to be a key pillar of local government today, issues relating to land have long been the subject of an animated policy debate. There is consensus among policy makers that land administration – which fell into neglect as officers had to attend to other duties – is in urgent need of improvement to effectively fulfil its functions in the 21st century.” The World Bank identified the need for across-the-board improvements and called for replacement of paper records with computerised systems as well as improved methods for the spatial components.

India is responding. In 2008, the Union Cabinet decided to implement a system for land registration and titling. It gave instructions to the Department of Land Resources to define the model for a titling law that could be applied throughout the country. Modernising the cadastral system for a country of more than one billion is not easy. Although the resistance may be low, difficulty lies in overcoming the inertia of the old system and securing the financial resources needed to modernise the cadastre. Fortunately, existing geospatial technology is well suited to the task.

In a paper at the 2007 International Federation of Surveyors (FIG) Working Week, Nirmalendu Kumar cited the poor quality of India’s existing maps as a key contributor to the current inefficiencies. Kumar proposed creating updated orthophotos and maps using aerial and satellite imaging supplemented by ground surveys. These documents, in digital form, would become the background for a GIS at state or national levels. Land records can then be digitised into the GIS. This work relies on accurate spatial references tied to a geodetic coordinate system.

Some of the control work is already underway. The Survey of India has taken steps to update the country’s geodetic reference frame, moving from the historic Everest Ellipsoid to a system based on the WGS84 datum. This includes defining the parameters for the transformation and development of a new physical reference framework of ground control points. The work is a significant step towards improving the accuracy of the positional and topological components of the Indian cadastre.

At the local level, the state of Gujarat has conducted detailed cost analyses that has shown the economic benefits of using modern geospatial technologies including GNSS, total stations and satellite imagery. Gujarat has developed specifications and requirements for cadastral updates to achieve three objectives: Creating updated cadastral databases via re-surveys and title verification; creating integrated textual and graphical land records; and replacing manual records with digital records. This approach is serving as a model for the cadastral update efforts in other states.

Maharashtra is also undertaking efforts to update its cadastre. The Land Records Department is using total stations and electronic data collectors to conduct field surveys. The electronic survey data is the basis for digital mapping and computerised land records. Punjab and Himachal Pradesh are among other states that are implementing geospatial tools. But the task is enormous; even the well-organised national and local efforts may not be enough. To meet the goals of the 2008 decision, the public agencies can work with private sector organisations to develop the needed resources and skills.

Because of India’s large size and strong geodetic foundation, the country is in a good position to utilise GNSS. Important gains can be made with the implementation of CORS and real-time GNSS networks to provide fast registration of boundary marks. GNSS networks also provide the basis for aerial and land-based photography and LiDAR. In addition to these, GNSS networks will provide long-term benefits in private, commercial and infrastructure development in India.

Because of the importance of land and tenure security in reducing poverty and creating sustainable livelihoods, land tenure issues remain firmly on the development agenda of most African countries. While a number of African countries have embarked on land reform projects to enhance security of tenure, many are hampered by the lack of a functional cadastral system. To ensure the success of these efforts, countries need to create modern cadastres that are supported by nationwide reference systems for positioning. Among the countries pursuing land reforms, four have begun implementation of national reference systems using GNSS.

In Ghana, the Land Administration Project Phase 1 modernised the geodetic reference system by installing five CORS stations and additional densification of the network is planned to make positioning accessible. In Nigeria, the late President, His Excellency Umaru Yaradua launched a five-point agenda that included land reform to facilitate productive use of land for economic development. As part of the efforts, the Office of the Surveyor General of the Federation installed seven CORS stations to modernise the geodetic infrastructure. Burkina Faso is also currently pursuing modernisation of its geodetic infrastructure to support a rural land governance project to provide titles for lands owned by the rural poor. Using funding from the Millennium Challenge Corporation (MCC), the country is installing nine CORS stations.

In Benin, MCC set aside USD 307 million in 2007 to facilitate economic growth, including the creation of formally documented land titles in the country’s urban and rural areas. The MCC funding also supported improvements in land registration and documentation systems. When the MCC work is complete, roughly 30,000 urban occupancy permits will convert to titled land and more than 80 thousand rural households will receive titles.

The GNSS infrastructure in Benin has enabled the country to skip over earlier positioning technologies based on conventional markers and techniques. A GISbased land information system can make a similar jump. For example, developed countries such as Germany went through several generations of record-keeping technologies including paper, microfilm, CAD and GIS before arriving at dedicated systems such as the ALKIS. Developing countries can create new records directly in the GISbased cadastres and bypass the intermediate steps.

Beyond the cadastral uses, the Benin GNSS network will provide benefits over long term with uses in agriculture, construction and resource management. GNSS reference stations can play a broader role across sub-Saharan Africa, with more countries implementing positioning frameworks tied to the African Geodetic Reference Frame. Information combining ground data with remote sensing can be used in resource management.

People within the positioning and land information disciplines understand the value of GNSS as a basis for cadastral development. Broader communities are understanding its importance as the enabler for property rights. In 2010, Ghana Supreme Court Justice S. Gbadegbe described the need for modern positioning systems in developing nations: “The preparation of maps of cities and towns is a necessary requirement and a catalyst to decision making and it is obvious that the potential of GNSS can be exploited for national development and poverty alleviation, especially with the improved services of GPS.”

The results of research and cadastral work in Africa, Asia and South America are encouraging. Developing nations can bypass the years of paper-based documentation and move directly to modern, low-cost cadastral systems, underpinned by modern spatial reference systems provided by GNSS and CORS. The return on the investment will be rapid and will carry large, long-lasting social and economic benefits.