Impacts of Transparent Online Auctions on Public Land Lease Revenue: Evidence from Legal and Administrative Changes in Ukraine

Klaus W. Deininger, Daniel Ayalew Ali and Roman Neyter

No 10201, Policy Research Working Paper Series from The World Bank

Abstract: Although millions of hectares of public land are transferred to private parties each year, often with unsatisfactory results, evidence on mechanisms to achieve better outcomes is scant. This paper analyzes the impact of a 2021 reform in Ukraine that -after earlier digitization efforts did not produce desired results- mandated use of transparent online auctions by local government to transfer rights to public agricultural land. The shift to a collusion-proof electronic auction system led to a near-instantaneous doubling of lease revenue. Had all public land Ukraine transferred since 2015 auctioned using post-reform mechanisms, local governments would have received incremental lease revenue of US$500 million per year. In countries with large public land endowments, legal and regulatory reform to ensure rights to public land are allocated competitively and in a decentralized way could possibly improve social, economic, and environmental outcomes.

Date: 2022-10-06
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