Waylaid Dialectic

April 24, 2010

Property Rights and Wrongs

Filed under: Aid,Institutions — terence @ 3:46 pm
Tags: , ,

A few weeks back Aid Watch came to visit. Aid Watch in this instance not being the name of Bill Easterly and Laura Freschi’s website but rather the left-wing Australian NGO. The visit was part of a speaking tour in which to raise awareness of land privatisation in Melanesia. The allegation implicit in the campaign being that privatisation is taking place at the behest of aid donors.

The panel discussion I attended was – for better and for worse – about what I expected.

For better: two of the three speakers were Melanesians who clearly knew about the context and cared about the issues; and the issues they raised were all real ones. Above and beyond the specifics of the talk it was also great to see independent civil society organisations holding government agencies to account. Accountability in development is, it goes without saying, a good thing.

For worse: arguably there was a bit too much blaming of donors – they’re not omnipotent and as one Pacific Island member of the audience pointed out, domestic governments play a major role in land policies too. More significantly, I thought the solutions the speakers offered, which all appeared to revolve around tradition and the past, weren’t really practical solutions to the problem of land in Melanesia. In all the Melanesian Countries with the partial exception of Fiji, populations are growing rapidly, and the idea that people might continue living off the land as they always have, in the face of this, doesn’t seem viable to me. Not to mention the fact that for the islands’ urban populations this option is already largely forgone.

Having said that I readily confess that I have no idea what the solutions to issues of land and land tenure in Melanesia are. And so, as the talks progressed I decided to jot down notes on the pros and cons of the privatisation of land.

Pros:

Secure property rights encourage investment, which brings in capital, which can provide jobs in the short term and facilitate development over time.

Commercial farms may be more efficient producers than communal plots, enjoying efficiencies and economies of scale.

Even for small scale farmers, privatisation and the ability to profit may foster increased productivity.

Secure tenure may serve as collateral for loans.

For urban slum dwellers actual rights to property *may* also translate into political rights and empowerment more generally.

Cons:

It may not do so for everyone, and the effect will be less in the future as populations grow, but common land serves as a social safety net in countries where formal safety nets are absent.

Often there are many competing claims to common land (i.e. one group ‘owns’ it but another can harvest from it, and another cross it) this makes it hard to formalise tenure and it means privatisation is often likely to create far more losers than winners.

As institutions property rights sit nested within other institutions (social and political). This means there are a hundred and one ways that privatisation processes can go astray, with the property ending up in the hands of the few while the poor stay as poor as ever just now without a safety net (see Russia, the looting of; and this article in Slate).

There’s also the issue of positional goods in an unequal world. There’s only a finite amount of land, and if it all gets brought up by wealthy expats to set up holiday homes (as is happening in at least one Melanesian Island at present) the price of land will become so inflated that the locals will never be able to buy.

Finally, there’s the fact that in some Pacific Island Countries the ownership of land is intricately linked to political structures. Meaning that changes in land regime may lead to wholesale political change. Something that’s not inherently bad, but which can go awfully wrong.

Jotting the notes down was helpful, and at least made the issues clearer for me. But I’ve still no idea of what the best means of land management in Melanesia might be. Consider me confused.

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