THE VIENNA INITIATIVE IN PERSPECTIVE

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THE VIENNA INITIATIVE IN PERSPECTIVE

• Jaime Vazquez-Caro,
• The World Bank

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FOCUS ON SINGLE ASPECT OF LAND ADMINISTRATION

• Re-establishment of individual property rights

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DIFFICULT AND FRUSTRATING IN MANY COUNTRIES

• Hard to apply restitution laws in the face of
  reality of rights
• Cumbersome procedures
• Institutional conflict
• Inadequacy of funds
• Lack of human and technical resources

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PRESENTATION

• Key macro-economics
• Key problems
• Possible solutions

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MACRO-ECONOMIC IMPORTANCE

• Well-known, too obvious for everybody
• Owners do care about property and will to try to
  improve it. Property gains market value.
• Secured real property rights are one of the
  pillars of market development through mortgage
  based credit.

Key macroeconomics (1)
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MORTGAGE BASED CREDIT MOVES MOUNTAINS

• Develops housing
• Backs up business investments
• Secures working capital for business

Key macroeconomics (2)
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SECURED LENDING IS CHEAPER DUE TO INHERENT LOWER
RISKS

• Risk assessment by banks requires different
  reserves according to lending products
• Mortgage lending requires lower reserved than
  non-secured credits

Your work contributes to cheaper interest rates
for housing and investment
Key macroeconomics (3)
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THE IMPORTANCE OF MORTGAGE LENDING IN DEVELOPED
COUNTRIES
Key macroeconomics (4)
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THE COST OF MORTGAGE LENDING IN DEVELOPED
COUNTRIES
Key macroeconomics (5)
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RESTITUTION IS A UNIQUE CHALLENGE

• COMPLEXITY
• VOLUME

Substantive Law
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COMPLEXITY

• Restitution laws engendered, with
• different intensities, the problems to
• be discussed in this conference

• Unidentified owners
• Missing parcels
• Identified but missing owners

• Non-registered owners
• Multiple Claimants
• Different owners of land buildings

Substantive law (2)
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VOLUME IS A MAJOR PROBLEM

• In addition to its inherent complexity, one
  obvious additional feature of restitution is its
  requirement for mass-production of settled
  property rights.
• In one year, western countries deal with the flow
  of transferred transactions of real
  property.
• In transition economies, they have to
  theoretically absorb the whole stock of
  property at once.

Substantive law (2)
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FOR THE SAKE OF COMPARISON

• Market economy
• Normal steady state situation flow of normal
  transactions (3-5 of properties) cases of
  doubt/conflict (less than 2) (A)
• Migration from paper to magnetic media (A)
  capture of the universe of the last transaction
  entered in the registry (B)
• Socialist economy restitution
• Avalanche of requests for first registration
  with unclear property rights (B)

Substantive law (3)
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SOME DATA FROM POLAND
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PROCESS ISSUES

• waiting times for registry services
  registration, reports on requested ownership (due
  to procedural design)
• delayed procedures
• judicial resolution of conflicts
• non-judicial resolution of conflicts

Procedural Law
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ONE ORGANIZATION DEALING WITH DIFFERENT ASPECTS
OF PROPERTY RIGHTS

• lack of experience and institutional capacity in
  implementing new policies
• insufficiency of financial resources
• redundancy and duplication of functions and
  information management
• insufficiency of technical resources

Organization and Institutions (1)
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MANY ORGANIZATIONS DEALING WITH DIFFERENT ASPECTS
OF PROPERTY RIGHTS

• lack of coordination of the role of institutes
  supporting and administering real estate property
  rights
• conflicting and possibly redundant institutional
  arrangements
• conflicts of interest of budget responsibility
  between national and regional authorities
• lack of experience and institutional capacity in
  implementing new policies
• insufficiency of financial resources
• redundancy and duplication of functions and
  information management
• insufficiency of technical resources

Organization and Institutions (2)
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INSTITUTIONAL CONFLICT

• Duplication of information
• Unnecessary transaction costs, disregard of
  beneficiaries
• Lack of clarity of mandate

Organization and Institutions (3)
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LACK OF CLARITY OF MANDATE

• Who has shown the major
• concern for property rights?
• THE CADASTRE OFFICIALS?

Organization and Institutions (3)
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ALL SUBSTANTIVE PROBLEMS PROPOSED

• Unidentified owners
• Missing parcels
• Identified but missing owners

• Non-registered owners
• Multiple Claimants
• Different owners of land buildings

• ARE ACTUALLY PROBLEMS
• TO OPERATE A CADASTRE WITH PROPERTY RIGHTS DEFINED

Organization and Institutions (4)
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• SHOULD THE CADASTRE MAN
• BE SO WORRIED ABOUT WHO OWNS
• IF HE/SHE WHO OWNS DOES NOT
• REALLY CARE?

Lack of Clarity of Mandate (1)
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THE ISSUE OF MULTIPLE CADASTRE

• CADASTRE IS REQUIRED NOT ONLY TO IDENTIFY PLOTS
  OR UNITS OF PROPERTY.
• DEMANDS ON CADASTRE COME FROM LOCAL, REGIONAL,
  NATIONAL AND SUPRANATIONAL AUTHORITIES.

Lack of Clarity of Mandate (2)
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THE ISSUE OF PLOT SIZE AND CADASTRE

• MANY PLOTS ARE EXTREMELY
• SMALL AND THE COST OF
• SURVEYING IS ENORMOUS.
• SHOULD IT BE DONE ANYWAY?

Efficiency of Mandate
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TECHNOLOGY ISSUES

• redundancy and duplication of functions and
  information management
• insufficiency of technical resources
• migration from paper to magnetic media

Institutions (3)
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LAYERS OF A SYSTEM OF PROPERTY RIGHTS

• LEGAL FRAMEWORK
• INSTITUTIONAL SETTING
• OPERATIONS

A Systemic Approach (1)
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A SYSTEMIC APPROACH ALIGNMENT OF THE DIFFERENT
LAYERS OF DEFINITION OF REAL PROPERTY RIGHTS
A Systemic Approach (2)
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THE DIS-ALIGNMENT OF THE DIFFERENT LAYERS OF
DEFINITION OF REAL PROPERTY RIGHTS
TECHNOLOGY
SUBSTANCE
ORGANIZATION
PROCESS
A Systemic Approach (3)
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REAL PROPERTY RIGHTS DIMENSIONS AND COMPLEXITY
OF THE TASK

• Organizational design
• subsuming substance, processes, and
  institutions,capable for exchanging
  information
• Institutional Investment
• Delivery of individual property rights
• Actual Performance
• Risks inefficiency, corruption
• Performance measurement

A Systemic Approach (4)
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Possible SolutionsTHE VIENNA INITIATIVEDEVELO
PMENT AND MAINTENANCE OF PROPERTY RIGHTS

• A 3-YEAR STRATEGIC PLAN

Strategic Thinking (1)
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STRATEGIC PLAN

• Strategy 1 Understanding the Issues
• Strategy 2 Optimization of National Efforts
• Strategy 3 Optimization of International
  Experience
• Strategy 4 EU Accession as Catalyst

Strategic Thinking (2)
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STRATEGY 1 UNDERSTANDING THE ISSUES

• Resolution of property rights as a means to
  provide certainty (ownership, restitution,
  zoning, rental regimes)
• Implications of different policies
• Defining a workable delivery system
• Cross-country real estate property rights survey
• Long-term issues and first registration kit

Strategic Thinking (3)
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STRATEGY 2 OPTIMIZATION OF NATIONAL EFFORT

• Deep Country Diagnosis gap analysis, needs
  analysis
• - Substance Review of cadastre accuracy
  standards, suitability of current plot definition
  for market economy, meaning of property rights.
• - Process Review of procedures (completeness,
  built-in complexity and vulnerability)
• - Organization Institutional alignment,
  cooperation and modernization
• - Technology Information system management
• Establishing Priorities Legal framework and
  institutional operations for market economy
  identification of specific critical issues to
  define country vision and strategic plan

Strategic Thinking (4)
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STRATEGY 2 OPTIMIZATION OF NATIONAL EFFORT (2)

• Stakeholders participation and satisfaction
• - University role
• - Private sector role (think-tanks, professional
  associations)
• - Awareness campaign on importance of property
  rights issue
• Development of a service concept
• Change management
• Development of mortgage based markets

Strategic Thinking (5)
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STRATEGY 3 OPTIMIZATION OF INTERNATIONAL
EXPERIENCE

• Reduction of land surveying cost right
  technology-standards mix
• Identification of good practice and performance
  indicators of land administration systems
• Paper to magnetic media migration solutions
• Quality Assurance Making sure that current
  projects will deliver property rights component

Strategic Thinking (6)
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STRATEGY 4 EU ACCESSION AS CATALYST

• Defining guidelines and blueprints for acceding
  countries
• EU consistent legal framework
• Generic software application developments
  subsuming many countries specifications
• Optimization of current international efforts
• - Partnership and coordination
• - Common approach in the way to deal with PR
  issues

Strategic Thinking (7)
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CONCLUSIONS

• In spite of better understanding and
  institutional exchange of knowledge, to
  accelerate the establishment of property rights
  we need to
• Simplify the substantive requirements, in
  particular the cadastre identifications
• Simplify the procedures to complete the first
  registration
• improve the organizational design thinking more
  of the client and less of rival existing
  institutions

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CONCLUSIONS (2)

• International agencies and national donors should
  joint their efforts to reduce the costs of
  establishing property rights and increase the
  speed in the delivery of secured property rights.
• Once again, this is a necessary condition for the
  development of a market economy.