Rent-seeking Behaviour and its Economic Costs in Urban Land Transactions in Accra, Ghana

The existing body of knowledge attributes to informal land transactions in sub-Saharan African cities observed problems in city neighbourhoods. Substantial resources, often backed by donor agencies, are therefore being spent in revamping bureaux and governmental bodies in a bid to solve the problems. This paper examines the economic impacts of this aspect of market intervention. Employing insights from rent-seeking theory, it estimates costs brought to bear on agents by government agencies' involvement in the urban land market of Accra, Ghana. The sum of these wasteful diversions of resources is found to explain a great deal of the haphazard developments that have come to characterise many neighbourhoods in the city. Market-led regulation emerges as the needed focus of future land policy and management strategy. Towards this, the paper calls for the removal of existing unwarranted market interventions and the reorganisation of responsible bureaux in ways that would induce them to operate efficiently.