International Property Markets Scorecard

There are common institutional weaknesses that Scorecards reveal:

• Level of legal protection often does not match implementation. Laws on the books do not always match what is happening on the ground.
• Tenants’ rights are of particular concern. Many small businesses cannot afford to purchase the premises where they operate and remain renters who often lack adequate protection from arbitrary termination of lease contracts.
• Blurred line between formal and informal sector. When it comes to small businesses, it is hard to separate formal from informal. The same factors that keep businesses informal or semi-formal play a role in whether they participate in property markets.
• Fragmented nature of property market information. Accurate assessments of property markets in many countries are difficult because real estate information is fragmented and opaque, and incentives remain in place to deliberately report false information to avoid excessive taxes and fees.
• Complex regulation governing property rights. Land regimes tend to be overly complex with multiple agencies dealing with land issues. These conflicts inhibit transparent property markets from developing.
• Computerization of land records is not a cure-all. Digitization is not a silver bullet; it often proceeds slowly, and records are not updated after initial implementation.
• Corruption in property transactions. Corruption in many cases is not overt. Rather, it permeates property transactions behind the scenes through conflicts of interest and collusion involving public officials, developers, and connected individual players.
• Difficulty in accessing credit. Lending based only on real property collateral remains the norm. This excludes small businesses because most do not own property, or their ownership is not formally documented.
• Limited dispute resolution access. Many businesses do not have access to the formal justice system and rely on trust and reputation rather than written contracts.
• Gender considerations. Women’s property rights, in law or in practice, are often not equal to property rights of men.

The Importance of Small and Medium-Sized Enterprises

Small and medium-sized enterprises (SMEs) are key drivers of the economy. In most countries, SMEs represent the largest percentage of businesses and create the most jobs. In emerging markets, SMEs contribute significantly to poverty reduction, prosperity, and stability. Micro enterprises (companies with less than ten employees) are also key drivers of economic growth and are often the starting point for SMEs.

SMEs and micro enterprises are central to efforts to achieve more inclusive growth. They create upward mobility in society by allowing disadvantaged or marginalized groups, including youth, women, seniors, migrants, and minorities, to actively participate in a country’s productivity. However, far too many of these businesses operate in the informal sector, do not have the resources to grow, and are often one adverse event – pandemic, equipment failure, eviction, extortion – away from losing everything.

Policies need to be in place to reduce entry barriers and excess regulation for all businesses. SMEs as well as micro enterprises need to be involved in developing policies governing property rights and markets in which they operate. The Scorecard provides an entry point for such policy conversations, bringing the focus to the areas where reforms can bring greater empowerment and inclusion.

Scorecard Methodology*

The Scorecard methodology investigates the six core elements necessary for sustainable property market development. The color saturation of each element indicates its relative strength or weakness, building a comprehensive picture of where reform efforts should focus to fully realize human potential, contribute to inclusive economic growth, and provide the opportunity for all to prosper.

*Note: Since this methodology was originally developed, some of its global inputs such as the World Bank’s Doing Business Indicators have been discontinued. However, since the Scorecard uses a mix of both quantitative and qualitative indicators to assess strengths and weaknesses of local property markets, substitutes can be referenced. With that caveat, the Scorecard remains a systematic and consistent measurement tool and can be used for holistic evaluations.

View Scorecard methodology