In certain contexts, legal and institutional reforms improving land governance and administration may be sufficient to catalyze demand for formal land rights without the necessity of investments supporting systematic land titling. In Mongolia, demand for land registration was catalyzed by a combination of legal and institutional reforms. In fact, most people in the program area who had not yet registered when the Property Rights Project (PRP) was being designed, self-registered prior to PRP titling efforts. This was due to a combination of factors, including the complimentary RSPS activity strengthening the Property Registry and related public outreach on the importance of titling, the government’s passing of a mortgage subsidy program, and the legislation allowing for a free privatized land parcel per individual (instead of per household). The legal reform entitling each individual, rather than household, to a plot of land also encouraged land registration among females. This left unmet targets for PRP land registration, but it left Mongolia better off in terms of a sustainable working land administration system and related market demand for formal land services. Mongolia is one of the few MCC countries in which, post-compact, most land transfers have taken place through the formal instead of informal land system.
MCC has pursued legal and institutional reforms in other countries without the same effect. For example, in Burkina Faso, the Rural Land Governance Project established commune level land offices and trained land officers, but the demand and related processing of land records was not as successful as Mongolia. This could be partially due to the cost of registration and lack of titles in Burkina prior to the compact. The rural areas where Burkina established offices also did not have the higher land values seen in a dynamic urban land environment, whereas Mongolia’s opening of offices was in the dense capital area where there was an existing large demand for formal land privatization and registration services coupled with high land values. In Benin, some people pursued land certificates following the compact’s provision of PFRs (village land use plans) while others did not. In Mozambique, widespread provision of DUATs (land use certificates) helped catalyze interest in DUATs, especially by the government who is now rolling out provision of DUATs widely. Although legal and institutional reforms in Mongolia may have been sufficient to catalyze land registration, it is unclear whether reforms alone would be enough to deliver similar results in other countries. The ability for Mongolia to drive registration via reforms was at a time of rapid growth and urbanization, and most people had a privatization certificate. MCC’s compact with Cabo Verde had a similar environment where many land parcels were privatized but not registered. However, even with the Cabo Verdean government’s new legislation that registration was required, there was no influx in sporadic registration. Rather, the land project systematically registered land parcels including those which already were privatized. MCC should continue to assess in the due diligence phase when it makes sense to invest solely in legal and institutional reforms to remove constraints to and incentivize registration versus when pilot or large-scale titling initiatives might also be needed to catalyze formal land markets. For each country, the constraints and environment are key to deciding which investment is best and there is not a one size fits all approach.