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The land rental system and diffusion of telecom infrastructure in Ghana: an institutional and transaction economics approach

Author

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  • Alexander Osei-Owusu

    (Aalborg University)

  • Anders Henten

    (Aalborg University)

Abstract

The paper answers the question: which are the economic and practical challenges encountered by mobile operators and tower companies when deploying infrastructure in countries with land ownership systems as in Ghana? The foundation for this issue is the clash and articulation of different kinds of land ownership structures and rights. Under the traditional social or communal ownership system, land belongs to the clans and is distributed among families following tradition-based user rights. The land ownership structures of a capitalist mode of production are only slowly breaking into this system. The analysis is based on institutional analysis including a calculated estimation of the transaction costs for telecom operators seeking to establish contracts for land rental and for enforcing contracts. Quantitative as well as qualitative empirical evidence is analyzed. The paper concludes that the land ownership system in Ghana creates problems for the telecom and tower companies. The communal lands constitute the dominant land ownership system. When this system encounters a private ownership system, a number of land ownership cases are produced, which costs money for the telecom companies. The total transaction costs relating to ownership problems connected with mobile towers are calculated to be between GHC 6.9 and 13.9 million in 2015. In the Ghana context, though this may not be a very large sum, such problems may hold or delay the expansion of the telecom infrastructure especially in rural areas. Uncertainty is an important factor when making investment decisions.

Suggested Citation

  • Alexander Osei-Owusu & Anders Henten, 2017. "The land rental system and diffusion of telecom infrastructure in Ghana: an institutional and transaction economics approach," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(2), pages 183-202, August.
    • Handle: RePEc:spr:eurasi:v:7:y:2017:i:2:d:10.1007_s40821-017-0072-x
    DOI: 10.1007/s40821-017-0072-x
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    References listed on IDEAS

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    1. Harold Demsetz, 1968. "The Cost of Transacting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(1), pages 33-53.
    2. Feder, Gershon & Feeny, David, 1991. "Land Tenure and Property Rights: Theory and Implications for Development Policy," The World Bank Economic Review, World Bank, vol. 5(1), pages 135-153, January.
    3. Adarkwah Yaw Antwi & John Adams, 2003. "Rent-seeking Behaviour and its Economic Costs in Urban Land Transactions in Accra, Ghana," Urban Studies, Urban Studies Journal Limited, vol. 40(10), pages 2083-2098, September.
    4. Adarkwah Antwi & John Adams, 2003. "Economic rationality and informal urban land transactions in Accra, Ghana," Journal of Property Research, Taylor & Francis Journals, vol. 20(1), pages 67-90, January.
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    Cited by:

    1. Ting Zhang & Ke Huang & Anlu Zhang, 2021. "Choice of Rural Collective Construction Land Sales and Rental Markets at the Theoretical Framework of Williamson’s Transaction Costs: Evidence from Nanhai District, Guangdong Province, China," Sustainability, MDPI, vol. 13(15), pages 1-16, July.
    2. Datis Khajeheian & Mike Friedrichsen, 2017. "Editorial note," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(2), pages 157-159, August.

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