Institutional transition: Social cohesion and demand for land titles in urban Tanzania

• Demand for Residential Licence is higher in homogenous neighbourhoods with higher shares of older, male and cooperative landholders. • This statutory property right is of higher priority to marginalised individuals, such as newcomers, women, and uncooperative landholders. • Landholders expect substantial returns from land titles, including gains of tenure security and public goods provision via state mechanisms. • Expectations of social sanctions for formalisation are low and neighbours do not provide significant (dis)incentives to land titling choices. • Land titling is seen primarily as an act of state contribution and a private decision: local leaders and households are more relevant networks. In much of urban Africa, demand for statutory property rights remains low even when governments coordinate land titling programmes and reduce the costs of registration. This paper studies the Residential Licence programme of Dar es Salaam (Tanzania), which has had moderate and decreasing uptake since the early 2000 s. It tests hypotheses that social cohesion – measured via neighbourhood homogeneity and individual connectedness (or marginalisation) – affects choices of formalisation and explores two potential channels through social cohesion producing returns from informal systems and social sanctions for exit. Statistical analysis of city-wide administrative data shows that more homogenous neighbourhoods with higher shares of older, male and cooperative landholders have lower individual titling, and marginalised individuals, such as newcomers, female and uncooperative landholders, make more recourse to statutory property rights. However, primary survey data and vignettes suggest that landholders expect substantial returns from formalisation, including gains of tenure security and public goods provision over and above the informal tenure system. Expectations of social sanctions by neighbours are negligeable overall, and neighbours do not provide significant disincentives (nor incentives) for land titling decisions in this context. By showing that dimensions of social cohesion make land title acquisition of higher priority for specific groups and individuals, these results add to a growing literature on the links between social cohesion, tenure security and land titling decisions. They underscore a need for further research on how informal tenure systems produce and distribute public goods (including tenure security) generating heterogenous (dis)incentives for transitioning to alternative land institutions. This knowledge will provide better understandings of demand for land titles in rapidly urbanising developing cities and inform more effective land policies addressing specific shortcomings of informal tenure systems for diverse contexts, communities and individuals.