Registration and release of customary-land for private enterprise: Lessons from Papua New Guinea

Land held under customary tenure has proven difficult to register and release for private enterprise globally. This is because the costs of developing secure rights to land held under communal ownership is high given that such ownership rules out a 'pay-to-use-the-property' system while punitive negotiation and policing costs make a 'pay-him-not-to-use-the-property' system ineffective (Demsetz, 1967, p. 355). Here I document reforms to institutions governing access to land held under customary title in Papua New Guinea that has imbedded collective ownership whilst allowing for a 'pay-to-use-the-land' for private enterprise. Reforms put in place over the past decade have allowed for voluntary incorporation of landowning clans, the registration of their land, and the leasing of this land for up to 99 years. The ongoing reforms provide lessons both for Papua New Guinea and for others wrestling with the challenges of making available land held by customary groups for individual enterprise.