Edinburgh Napier University

  The existing body of knowledge attributes to informal land transactions in sub-Saharan African cities observed problems in city neighbourhoods. However, the dearth of empirically insightful studies of how this eventuates continues to leave a vacuum in terms of practical solutions. But it is commonly held that bureaucratic intervention offers a way out. Substantial resources, often backed by donor agencies, are therefore being spent in revamping bureaux and governmental bodies in a bid to solving the problems. This thesis sets as its central aim to identify and establish the costs to agents of the real causes of the problems. It also aims to assess the economic impact of formal policy measures on agents and recommends feasible approaches to market regulations. To address the objectives insights from property rights, transactions costs and public choice economics are brought to bear. Based on a survey of market participants of sampled informal neighbourhoods in Accra, the capital city of Ghana, it employs regression and discriminant analyses to analyse the data generated. In the process helpful insights are gained. It has been possible to put some figures to the extent of costs that lead agents to operate in ways that eventually translate into the problems commonly witnessed. The study finds that actual costs to market participants of government activities are too high to be of any benefit. These costs mainly derive from rent-seeking behaviour which extensive bureaucratic intervention of transactions in urban residential lands bring about. On the basis of the results of the regression analysis, arguments implying inefficiency of informal land markets, specifically relating to the arbitrary nature of prices, are refuted. The futility of the use of compulsory purchase powers to create residential neighbourhoods also emerges from the results of the discriminant analysis. Similarly, efficiency' enhancing bureaucratic interventions in the informal market lead to the diversion of real resources into wasteful rent-seeking expenditures. The sum of these wasteful diversions of resources explains a great deal of the haphazard developments that have come to characterise many neighbourhoods of cities in Sub-Saharan Africa.
Market led regulation emerges as the needed focus of future land policy and management strategy. But to work the study calls for the removal of unwarranted market interventions extant at the present moment and the reorganisation of bureaux to be responsible in ways that would induce them to operate efficiently.