Corresponds to the proposed methodology of the tool and the experience of LAP in Latin America and particularly Central America.

Module 1: Proposed Methodology and Experience of LAPs in Latin America

Fiscal, Financial and Economic Analysis

Fiscal, Financial and Economic Analyses (FFEA) seek to determine, during ex-ante evaluations, which options will maximize the return on an investment which will be made in the various areas of intervention of LAPs.

Ex-post evaluations, however, seek to analyse whether initial expectations have been met and whether by achieving the objectives mentioned above better economic conditions have been created, whether the use of financial resources was effective and whether the achievements made are sustainable in the sense that they will persist over time.

When a Land Administration System (LAS) is effective there are three immediate outcomes in economic and financial terms:

  • Security and legal certainty of tenure
  • A reduction in the costs of property transactions, and
  • Better access to ownership information

These outcomes also give rise to new effects which expand on and strengthen the earlier ones, namely:

  • An increase in property value
  • Savings for clients of the system
  • Sustainable management of natural resources

Brief introduction to the FFEA

According to Burns1, the regularization and titling of tenure at household level is a major advantage, because it directly helps to increase property value and to encourage productive investments by households. The reference framework for carrying out Fiscal, Financial and Economic Analyses of LAPs (module 5) contains several diagrams that explain change theory in relation to this subject.

As can be seen in the various modules of the guide, only some of the results of LAPs can be translated into financial resources. They therefore need to be measured and converted into a monetary value to measure their profitability in relation to the Net Present Value (NPV) of receipts and the Economic Rate of Return (ERR).

The determination of receipts is important as the influence of the project or the incremental analysis of cash flows can then be visualized and used to measure the increase caused by the project. To carry out this type of analysis, the guide is based on the preliminary work of S. Pagiola (1999)2 and the recommendations of P. Belli and J. R. Anderson (2013)3.

Cost-Efficiency Evaluation

While a large proportion of LAP costs are channelled into the modernization of ownership information systems, national economic benefits in terms of fair access to information, energizing the land market, or transparency are difficult to calculate. Considering that the majority of players recognize the importance of this investment in these areas, a cost-efficiency analysis is particularly important.

In the case of LAPs, this methodology allows a comparison of the development of computerized cadastre-register linking systems and whether routine surveying is cheaper for keeping information on parcels and their owners up to date in the cadastre and register in a given territory than an alternative which would involve separate information collection and updating in registers, at the request of users only.

Tax impacts

The evaluation of the tax impacts of LAPs will be measured essentially by assessing how municipal authorities increase the collection of property taxes by expanding and updating their cadastral tax base. LAPs in Central America have worked to involve municipal authorities in collecting information and updating the cadastre, as well as to increase their ability to use this information to improve their own information systems. It is important to mention that property taxes are raised and invested mainly by municipal authorities, although in some countries such as Nicaragua, the central government also obtains income from applying a tax rate on the value of the property of citizens.


1 Burns, T. (2007).
2 Pagiola, S. (1999).
3 Belli, P., & al. (2013).