ABSTRACT: Land management addresses all issues related to the sound and susta inable use of land. Itrnis the process by which the resources of land are put to good use. Like in many other developingrncountries, in Ethiopia, land management process has not been immune to the growing phenomena ofrnland management cha llenges. This paper analyzes land management challenges and determinant factorsrnof Willingness to pay (WTP) of investors for land. It specifically questions causes, effects and responsernoptions of the problems such as land speculation, the issue of governance and information in relation tornland management and land lease policy implementation as well as informality on land. It also seeks tornidentify factors that affect WTP of developers to pay for land using Ordinary Least Square (OLS)rneconometric model. The study utilized the survey method, interviews with selected government officials,rnand review municipal documents to generate empirical data. A sample of 290 households from formalrnresidents (200), informal settlers (40) and developers (50) was used. Simple random sampling techniquernwas employed to select formal residents and developers, whereas purposive sampling was used to selectrninformal settlers. Empirical evidence was complemented by a study in three selected towns from arnSpecial Zone of Oromia National Regional State surrounding Addis Ababa, namely Sebeta, Sululta andrnLege Tafo-Dadi. Descriptive statistics, multivariate analysis and Liker Scale questions were employedrnusing SPPS-16, E-Views-6 and Severity index calculation, respectively, to analyze the collected data. Thernresults obtained from th is study ind icated that governance, information, lease policy, speculation andrninformality in the land management process are plu ral and characterized by multiple linkages. Thesernmultiple dimensions affect the content, process and outcomes of the land management system in thernstudy area. A significant number of developers buy land not for consumption but for saving. Like the localrntown government, land speculators have also provided land for those who have the capacity to buy.rnFarmers at the expansion area have break up their land in small sizes and offered it for sell. Informalrnsettlements in the study area are not necessarily perceived as illegitimate by the actors concerned. Majorrndeterminants of informality in this analysis include poverty, shortcomings associated with the socialrnhousing programs, unrealistic urban land use regulations and standards, bottleneck bureaucraticrntendencies and bad governance. Institutional response options from state and local authorities haverntaken a va riety of forms including 'laissez-fai re' approach, negotiation and bulldozing.rnPublic opinion on some governance norms (l ike transparency, inclusiveness, equity and responsiveness)rnclearly depicts the absence of good governance in the study area. Rampant corruption is also anotherrnmajor factor that decreased the efficiency of the land administration and delivery system. Adequate landrninformation systems are prereq uisites to land management and administration. However, the findings ofrnthe study revealed that land registration procedure in the study area is t ime consuming and cumbersome.rnMost town municipalities in the study area lack clear enabling law to affect real property registration.rnShortage of critical mass of skilled man power coupled with lack of technolog ical support system furtherrncompounded the problem. Respondents blame the existing lease price as discouraging real developersrnand unaffordable to the poor. Lease was initially publicized as it will finance the local government'srnrevenue from land lease and has to be re-invested for local infrastructure development. However, inrnreality, the commitment on the part of the implementing agencies is incredibly low. Even though morernefforts have to be ca rried out to promote the notion of lease holding tenure, no significant measure hadrnso far been taken by the local administration to build trust among the citizens. Econometric modelrnindicated that the va lue for a particular land in towns is positively affected by plot size, investors' capitalrnand accessibility to basic services. In the study area, investment cost, distance of the plot from the mainrnroad and price of land had negatively affected investors' WTP for a particular land. Finally, the analysis ofrnthe study strongly suggest for the need to promote public participation, public awareness raising andrnoutreach on land lease policy, build inst itutional ca pacity including critical mass of skilled manpower,rnfacility, etc in local administra tions, bridge the prevailing gap in the contract agreement and informationrncommunication technology tra nsformations. A more proactive mechanism to deal with informality isrnadopting a collaborative approach consisting of three steps, namely recognit ion, awareness creation andrnidentification, and result assessment is recommended