Digitize land records - Unlock economic opportunities

by Bjorn Lomborg

Land records in Bangladesh are a bit of a mess—according to the records there is more land owned than actual land exists.  The land administration process still follows the antiquated system that British Colonial rulers instituted, from surveys all the way to collection of property taxes. Three different ministries oversee the records system, working independently and with little coordination.

If you need to access your own land record, or transfer property after a sale or an inheritance, you will have to visit multiple government agencies over the course of at least a month—and you should also be ready to pay, possibly under the table.

Records are still kept on paper documents, and in addition to being recorded in painstakingly detailed handwritten transactions, they also use archaic language that everyday citizens cannot comprehend. Surveys are supposed to be done every five years, but most are extremely out-of-date, so even if you find your record, the survey map may not reflect the reality on the ground. And in coming years, land administration is likely to get even more complicated given that Bangladesh is already one of the most densely populated countries in the world.

How can Bangladesh best address the problems that stem from its outdated land records system? The Bangladesh Priorities project works with dozens of teams of local and international economists to find the best solutions for issues that range from land administration to child health to poverty. Each team studies the costs and benefits of solutions to these issues. In a partnership with Copenhagen Consensus and BRAC, we aim to help Bangladesh discover where we can do the most good for every taka spent toward solving the country’s most pressing problems.

New research by Sultan Hafeez Rahman, executive director of the BRAC Institute of Governance and Development (BIGD), and research assistant Sumaiya Kabir Talukder finds that digitizing the land records system would provide an incredible 619 takas of benefits per taka spent.

The laborious and time-intensive records system creates room for errors due to honest mistakes—or the potential for outright corruption. If you need to transfer title of a parcel or address any other land-related issue, officials might demand compensation before they move the process along. One study found that land administration accounts for nearly 40 percent of all bribes paid at the local level in Bangladesh. 

The complexity of the system and tendency for officials to delay or block the process encourages people to rely on informal title arrangements. But this informality weakens the security of property rights and undermines economic activity.

The analysis proposes digitizing land records and simplifying the application process, a strategy the national government began to explore in 2010. Savar Upazilla has piloted a program to digitize its land office, and the transition from a paper- to software-based system has already cut costs and made land services much simpler for citizens to use.

Electronic land records nationwide would make information easy to acquire through a publicly accessible system, and the time, monetary, and other transactions costs required to access records or transfer parcels would fall tremendously. Digitization would also make it impossible for anyone to physically manipulate records, decreasing opportunities for officials to extract bribes and leading to fewer land disputes and court cases.

Digitization costs across Bangladesh’s 483 remaining Upazilas would include Tk 77.28 million (Tk 7.7 crore) to purchase computers and software and Tk 650 million (Tk 65 crore) to scan the 50 million existing land records. It would also cost Tk 90.42 million (Tk 9.0 crore) to staff the offices each year. In total, this implies a cost of Tk 2.8 billion (Tk 276.2 crore). 

The benefits would accrue due to more speedy expedition. Today, a typical transaction involving land records costs Tk 1,045, takes 30-45 days, and requires five different trips to government offices. With digitization of the system, however, the cost would fall to just Tk 80, and it would take only 15 days and two visits.  Including benefits of fewer legal transactions and fewer bribes, the total direct benefits reach Tk 481.8 million (Tk 48.2 crore) annually. So just counting the direct benefits, each taka spent to digitize the land records system would do more than 3 takas of good.

However, the largest benefit from digitization will come from increasing the security of property rights across the country. It is well-known in economics that there is a link between more secure property rights and higher economic growth. Assuming that land digitization will move Bangladesh a small way towards a society with more secure property rights, and based on large-scale estimates of property right impacts on GDP growth across a wide range of nations, the experts predict that land digitization would bring benefits of more than Tk 160 billion (Tk 16,000 crore) over the next 15 years and possibly more than Tk 1.3 trillion (Tk 130,000 crore) by 2070. This indicates indirect benefits of 616 takas for every taka spent. 

So in total, 619 takas in direct and indirect benefits result from each taka spent to digitize land records. 

Of course, the 619 taka are crucially dependent on the estimated growth increase. Yet, even with vastly different estimates, the benefits of land digitization are phenomenally higher than the costs. If you were in charge, would this be one of the solutions you think should be at the top of Bangladesh’ list of priorities? Let us hear from you at copenhagen.fbapp.io/landadminpriorities. We want to continue the conversation about how to do the most good for every taka spent.

Dr. Bjorn Lomborg is president of the Copenhagen Consensus Center, ranking the smartest solutions to the world’s biggest problems by cost-benefit. He was ranked one of the world’s 100 most influential people by Time Magazine.

This article was originally posted in The Daily Star.