Inderscience Publishers

Urban myth vs. economic explanation: an empirical analysis of land purchasing decisions in Accra

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This paper reports the results of an analysis of market participants engaged in informal urban land transactions in Accra, Ghana. It has been occasioned by the dearth of empirical studies that shed light on commonly held beliefs that informal land transactions in sub-Saharan African cities account for many observed problems in their neighbourhoods. Employing regression and discriminant analyses, the paper finds as follows: informal transactions work remarkably well and obey the fundamental economic laws of demand and supply; claims that such transactions lead to high and escalating land prices are unfounded; claims concerning the charging of arbitrary prices by land suppliers are unfounded; government intervention through compulsory purchase leads to perverse outcomes. Unresolved title disputes, lack of registered title documents and the absence of reliable databases of ownership plague this particular market. The findings reveal that the argument that bureaucratic intervention offers a way out is misconceived. Market-led regulation emerges as the needed focus of future land policy and land management strategy.

Keywords: urban property, informal land transactions, Ghana, planning policy, urban land purchasing, sub-Saharan Africa, land policy, land management strategy, market-led regulation

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