Cadasters, Asset Tangibility, and Growth

Cadasters—records of land and property ownership—constitute an important pillar of a country’s institutional landscape by enabling the assignment of property rights. This paper examines the impact of cadasters on long-term economic growth by identifying a specific channel in this link: asset tangibility. It hypothesizes that the more a firm’s assets are tangible, the more relevant cadasters become. The analysis uses a cross-country dataset on cadasters together with granular data from industry panels over the last six decades. The results show that the development of cadasters fosters long-term growth, particularly in industries with high asset tangibility. Higher investment in those industries, resulting from stronger cadasters, contributes to this pattern. The growth impact of cadasters is more pronounced in (i) countries that lack strong cadasters, such as in Sub-Saharan Africa; and (ii) countries with typically more investment-conducive legal systems. The findings suggest that cadastral reforms can help stimulate investment and sustain long-term growth in many developing economies.