Global property rights and land use efficiency

With accelerating global urbanization, land faces mounting pressures from competition over scarce resources, urban expansion, and industrialization, which in turn affect ecosystems, food systems, and natural resources. The United Nations SDG 11.3.1 monitors land use efficiency (LUE) through the ratio of the land consumption rate (LCR) to the population growth rate (PGR), where a higher LCRPGR indicates lower efficiency. This indicator encompasses both urban growth and rural construction land expansion. The study posits that secure and well-established land property rights (LPRs) enhance LUE by promoting investment, reducing risks of expropriation, and enabling efficient transactions. Addressing a gap in cross-national analyses, the paper examines country-level LCRPGR from 1990–2020 using GHSL spatial data and World Bank population data to assess how the security of property rights influences LUE across countries, aiming to inform sustainable land development and policy.

Prior research links land use change and LUE to urbanization, industrialization, globalization (labor mobility and FDI), transportation, and natural resource endowments. Examples include agricultural-to-urban conversion in Ethiopia, urban shrinkage in parts of Europe, agglomeration-related LUE improvements in Western Europe, fragmented industrial land patterns in China, suburbanization in high-income countries, and FDI-driven urban growth in developing regions. Transport investments (e.g., Seoul, Madrid, Chinese megacities) reduce commute times and support denser, mixed-use development, while land endowments (e.g., Australia vs. Japan) shape land use strategies. Institutional research highlights that clear property rights reduce transaction costs and improve land management; weak leasing policies can leave urban land vacant or underutilized. However, the role of land property rights (LPRs) in shaping LUE has been underexplored, with limited work tying deeper legal origins to mechanisms influencing LUE. This study addresses that gap by examining how property rights security, influenced by legal origin, affects LUE globally.

Design: The study uses a fixed-effects (FE) panel regression as the baseline to estimate the effect of the security of land property rights (SLPR) on land use efficiency (LUE), measured by LCRPGR, across 1990–2020. To address endogeneity, it applies a two-stage least squares instrumental variables (2SLS-IV) FE model using legal origin of neighboring countries as the instrument. Robustness checks replace the key explanatory variable and the dependent variable specification. Data and variables: The dependent variable LCRPGR (SDG 11.3.1 indicator) is computed from built-up area and population changes using GHSL built-up data (1 km resolution; 1990–2020, interpolated at 5-year epochs) and World Bank population data. Built-up areas are aggregated by country boundaries (Natural Earth). LCR is ln(Urb_{t+n}/Urb_t); PGR is ln(Pop_{t+n}/Pop_t); LCRPGR=LCR/PGR. The key explanatory variable SLPR is from the Fraser Institute’s property rights/security index (log-transformed). Controls (all in logs) include: available land per capita (ALPC), GDP per capita, industry value added share (IVA), urbanization rate (UR), quality of overall infrastructure (QOI), regulatory quality estimate (RQE), FDI rate (FDIRATE), and net migration rate (NMIRATE). Baseline FE model: LCRPGR_it = β0 + β1 ln(SLPR_it) + βm Controls_it + year dummies + country fixed effects + ε_it. IV strategy: Legal origin (common law vs civil law) is used as an instrument via the proportion of neighboring countries that are common law (Common_mean), interacted with time to capture dynamics. First stage regresses ln(SLPR)*time on Common_mean and controls with FE and year dummies; second stage regresses LCRPGR on the fitted ln(SLPR)*time and controls with FE and year dummies. Weak/over-identification tests (e.g., Hansen J) assess instrument validity. Robustness: (1) Replace ln(SLPR) with property rights protection (PRP) index as x to test consistency. (2) Replace y by a binary efficiency outcome using a Probit model: 1 if 0 < LCRPGR ≤ 1 (high efficiency), 0 otherwise (LCRPGR < 0 or > 1).

Global LUE trends: From 1990–2020, average LCR (0.622) exceeded PGR (0.391), yielding mean LCRPGR of 1.591, indicating a global decline in LUE. Continental patterns diverged: Africa, Asia, and Oceania showed upward LCRPGR trends (declining LUE); North and South America showed downward trends (improving LUE, stronger in North America); Europe remained relatively stable but with volatility driven by population changes. High-LUE countries were concentrated in Africa in 1990 but became geographically diverse by 2019. Growth interval shifts: Europe moved from many countries in high-growth (LCRPGR>2) in 1990 to predominantly low-decrease (LCRPGR<-1) by 2019 due to population declines. North America shifted from low-growth (efficient) toward higher growth (lower efficiency) by 2019 in several places. Asia, Africa, South America, and Oceania maintained the highest shares in low-growth (0<LCRPGR≤1) across both years. Income gradients: Low and lower-middle-income countries (e.g., Yemen, Comoros, Bolivia, India) clustered in low-to-middle growth (relatively higher LUE), whereas upper-middle and high-income countries (e.g., Brazil, USA, Canada, China) concentrated in middle-to-high growth intervals (lower LUE). Legal origin differences: Civil law countries generally exhibited lower LUE (higher LCRPGR) than common law countries; common law countries had smaller shares in the high-growth interval. Demographic headwinds in some civil law countries (aging, low fertility) may further affect LUE. Causal estimates: Baseline FE (LCRPGR>0 sample) shows ln(SLPR) coefficient −5.554 (95% CI: −11.523, 0.416; p≈0.068), implying a 10% increase in ln(SLPR) reduces LCRPGR by ~0.555, improving LUE. For LCRPGR<0, coefficients were not statistically significant, suggesting SLPR did not enhance LUE where populations declined without commensurate built-up area reductions. IV-FE (2SLS) results: First stage shows Common_mean positively predicts SLPR (coef 0.180; p=0.006). Second stage yields ln(SLPR) coefficient −0.211 (p=0.013), confirming that higher SLPR causally improves LUE; Hansen J p=0.0659 (instrument deemed exogenous at 10%). IV magnitudes are smaller (more conservative) than baseline FE. Robustness: Replacing SLPR with PRP yields ln(PRP) coefficient −48.459 (p≈0.072), implying a 10% increase in ln(PRP) reduces LCRPGR by ~4.846, consistent with LUE improvements. Using a binary efficiency outcome in a Probit model shows ln(SLPR) coefficient 8.294 (p<0.001), indicating higher SLPR increases the probability of being in the efficient range (0<LCRPGR≤1).

Findings support that secure land property rights (SLPR) enhance land use efficiency worldwide. Mechanistically, secure rights incentivize long-term investments by developers and individuals, foster active and efficient land transfers, and improve land productivity while curbing urban sprawl. They also constrain government overreach, encourage transparent markets, and reduce corruption and transaction costs, aligning with higher LUE. Legal origin shapes SLPR: common law systems generally afford stronger property rights, better investor protection and contract enforcement, lower registration costs, and greater political/civil liberties, which are conducive to efficient land use. Civil law countries more often face ambiguous or weakly enforced property rights, contributing to conflicts, underutilization, and lower LUE, as illustrated by cases in China, Russia, and Brazil. Policy implications include establishing and safeguarding clear, secure, and equitable property rights; strengthening institutional capacity for registration and enforcement; and using fiscal instruments (e.g., taxation of vacant land) to discourage inefficient land holding. The results provide empirical, cross-national support for institutional reforms aimed at improving LUE and achieving SDG 11.3.1.

This study demonstrates, using global panel data and FE plus IV methods, that stronger security of land property rights causally improves land use efficiency as measured by SDG 11.3.1 (LCRPGR). It documents systematic cross-country patterns by income group and legal origin, with common law countries generally achieving higher LUE than civil law countries. The work contributes an interdisciplinary, cross-national perspective linking institutional property rights regimes to land efficiency outcomes and offers policy-relevant insights for sustainable land management and urban planning. Future research should: (1) integrate broader social and political dimensions, including indigenous and collective land stewardship perspectives; (2) expand case studies to underrepresented civil law high-income countries (e.g., France) to test external validity; (3) analyze countries with substantial population decline to understand LUE dynamics under shrinking demographics; and (4) refine measurement by exploring alternative or improved indices of SLPR beyond the Fraser index.

The analysis does not fully capture social and political dimensions (e.g., cultural norms, indigenous land stewardship) that may shape land use. Case studies may not represent all legal types, particularly some high-income civil law countries. Due to data limitations, the study does not deeply examine property rights’ roles in countries with strong population decline. The SLPR proxy (Fraser index) has limitations; results could benefit from alternative indices. Additionally, discrepancies between built-up area and population dynamics can yield extreme LCRPGR values, complicating interpretation in certain contexts.