Habitat International 32 (2008) 121–135 A neo-institutional economic critique of the system for allocating urban land and development rights in Nigeria Anthony U. Egbu à , Paul Olomolaiye, Rod Gameson School of Engineering and the Built Environment (SEBE), University of Wolverhampton, Wulfruna Street, WV1 1SBWolverhampton, UK Abstract Governments in sub-Saharan Africa have relied on received colonial land use planning institutions to manage and control the form of their cities. The approach adopted has involved the nationalisation of land and development rights and extensive application of rigid bureaucratic approaches to the allocation of land and development rights. This paper applies principles of neo-institutional economics to critique current land use planning practice in sub-Saharan Africa. Results of an empirical study in Nigeria are used to demonstrate the failure of current land planning system while advocating for competition of institutions in the allocation of land and development rights in the cities of Africa south of the Sahara. r 2007 Elsevier Ltd. All rights reserved. Keywords: Market failure; Specialist interest groups; Public choice; Property rights Introduction Many cities in sub-Saharan Africa experience problems of ‘unauthorised’ or ‘illegal’ developments as well as environmental squalor. Larbi (1996) noted that in Accra, Ghana, 78% of stool and family land developments are illegal activities. Arimah and Adeagbo (2000) observed in one of the medium income neighbourhoods of Ibadan, Nigeria, that 83% of the homes infringed upon the zoning regulations in the city. It is also estimated that in Tanzania, 80% of the country’s urban population live in informal settlements (Kombe, 2005). Agbola and Jinadu (1997) and Njoh (1999) have both extensively examined the demolition of the dwellings of an estimated 300,000 people in Lagos, noting the influence of specialist interest groups. The World Bank (2004b) observed that it takes 21 procedures to register a commercial property in Abuja, Nigeria, but only three procedures in Helsinki, Finland. The logical questions then are why this situation in Africa and what way forward? This received system of urban planning in sub-Saharan Africa is based on the nationalisation by the state of land and development rights. The point at issue here are the legal rights to land and development. In addition to Nigeria, other countries in sub-Sahara African with similar systems of state nationalisation of land and development rights include, Cameroon (Njoh, 1999), Tanzania (Kombe, 2000) and Zambia (Mwimba, 2002). ARTICLE IN PRESS www.elsevier.com/locate/habitatint 0197-3975/$ - see front matter r 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.habitatint.2007.08.003 à Corresponding author. E-mail address: toniegbu@yahoo.com (A.U. Egbu).