In areas with relatively strong perceptions of tenure, systematic land registration may not improve tenure perceptions and investment; land investment can in fact strengthen and secure tenure claims. The Land Administration Reform Activity (LARP) evaluation found that although the national level legal and institutional reforms resulted in land transactions, mortgages and investments, the additional support to systematic regularization in the informal settlements around Maseru did not lead to increased investment. In fact, even though LARP succeeded in meeting targets for leases, investment was around 20 percentage points lower in LARP land regularization areas as the comparison area. Similarly, although there were increases in women’s ownership of land and female-headed households along with decreased in female-headed households concern over being involved in a land related conflict, women had no significant changes in investment.
There were a few factors that potentially contributed to this inverse investment effect. First, only 5% of comparison households were concerned with land-based conflict at baseline so there were already relatively high perceptions of tenure. Second, the comparison area was far from the city and rapidly urbanizing compared to the more developed treatment areas. Third, government criteria for leases during systematic regularization included construction or presence of building materials, which could have led to investment in treatment areas ahead of the baseline. Finally, the comparison areas were able to sporadically register, and these rates of registration improved under LARP’s successful policy and institutional reforms. However, there was still more titling occurring in treatment areas and people were investing in comparison areas without leases.
Looking at the household survey data for explanation, respondents prior to LARP leasing did not believe tenure insecurity was a cause of lack of investment, but rather 95-99% noted lack of investment was due to either no need to invest or not being able to afford it. Following the provision of leases, control area households noted investment was made to secure ownership rights (around 20%) rather than due to having a secure tenure document (under 5%) where in areas that received LARP leases, the driving factors of investment were more mixed. The land literature has similarly shown mixed evidence linking land tenure documentation, perception of tenure and investment.
During the design phase, MCC should consider drivers of tenure and investment for each beneficiary of interest in the specific context. Although tenure and investment may be correlated at times, in the absence of documentation and a rapidly changing environment like urbanization, investment may be a means to secure tenure rather than secure tenure leading to investment.