Institutional design and performance of land-based financing instruments: Evidence from local authorities in Ghana

Abstract

Rapid urbanisation in Ghana has increased the demand for serviced land and infrastructure, yet Metropolitan, Municipal, and District Assemblies (MMDAs) struggle to generate sufficient revenue. Land-based financing (LBF) instruments, such as property rates, developer obligations, and betterment charges, offer essential opportunities but are still underused. The study examined how institutional design and partisan politics influence the performance of LBF instruments in Ghana. Using 32 semi-structured interviews and policy document analysis across four MMDAs, the findings show that although the legal framework is promising in theory, actual implementation is hindered by election-year rate freezes, elite capture, outdated valuation rolls, and limited technical and enforcement capacity. While digitalisation and community participation offer opportunities for reform, their effects are uneven. The study contributes to existing knowledge by demonstrating how institutional design, when influenced by partisan politics, can transform potentially effective revenue tools into fragile practices, thereby enriching debates on fiscal federalism and the political economy of decentralisation.