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The efficiency of land-use in a developing city: traditional vs modern tenure systems in Kampala, Uganda

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  • Venables, Anthony
  • Bird, Julia

Abstract

Land rights and tenure systems are an important factor behind poor housing and inefficient land-use in developing country cities. In Kampala, Uganda, four systems of land tenure coexist, allowing a detailed study of the effects of these on household and firm location decisions. Spatially disaggregated data across the city suggest that the presence of a traditional land tenure system (called mailo) skews land-use towards informal housing and away from productive activities. Using a structural model of the city we show that this due to mailo having a positive value for occupants of informal housing, attributable to mailo-specific amenity benefits and/ or rent caps. We use the model to investigate the effect of converting all mailo land in the city to leasehold. Despite direct loss of amenity experienced by mailo residents, aggregate city income may rise substantially because of more efficient land-use. Manufacturing firms move into formerly mailo areas and form new clusters of activity. This increases urban wages, particularly among the low skilled, and raises aggregate urban real incomes by 2% in the absence of localisation economies and as much as 6.7% in the presence of such economies of scale.

Suggested Citation

  • Venables, Anthony & Bird, Julia, 2019. "The efficiency of land-use in a developing city: traditional vs modern tenure systems in Kampala, Uganda," CEPR Discussion Papers 13563, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13563
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    References listed on IDEAS

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    Cited by:

    1. Henderson, J. Vernon & Liu, Vivian, 2023. "Urban land markets and city development: Sub-Saharan Africa," LSE Research Online Documents on Economics 119388, London School of Economics and Political Science, LSE Library.
    2. Gharad Bryan & Edward Glaeser & Nick Tsivanidis, 2019. "Cities in the Developing World," NBER Working Papers 26390, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Urban; Land-tenure; Land-use; Customary; Uganda;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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