Transnational large-scale land investments in developing economies: What role do formal institutions play?

This paper examines how institutions impact large-scale land acquisitions (LSLAs) in the peri-urban city of a developing economy. That is, by examining the documented formal rules of the Lagos market and their enforcement procedures, it identifies the specific role the institutional framework of the market plays in the distribution of the impacts of large-scale land-based investments amongst host communities. The paper proceeds by examining the spate of transnational large-scale land-based investments on a global scale. It considers the issues driving the sustained interests of international investors such as transnational corporations in acquiring large swathes of land, mostly in developing countries, alongside the apparent global patterns of these investments. The paper employs a qualitative research strategy involving in-depth semi-structured interviews conducted with key stakeholders in the LSLA that is prompted by the Lekki Free Trade Zone project in Lagos, Nigeria. That is, key government representatives, international investors in the project and representatives of the host communities. Our empirical investigations and analyses show that where property rights are poorly delineated and assigned in the formal institutional prescriptions governing LSLA in a market, institutions may become an unintended means of impoverishment and exclusivity, thereby defeating the public good imperative of LSLAs in such markets. The paper further suggests some policy directions for strengthening the institutions of the Lagos market towards achieving equity, transparency and accountability in the conduct of transnational LSLAs.