Property rights and development: Lessons for Zimbabwe

Earlier this year I was involved in a review of the literature on the relationships between property rights and development commissioned by DFID and led by Future Agricultures partners, the Overseas Development Institute, and supported by the FAC land theme. The focus relates to an important and long-running debate in Zimbabwe about what to do about land tenure in both rural and urban areas.

The review was prompted by a concern by DFID to underpin with solid evidence the claims made in the UK government’s narrative about international development, known as the ‘golden thread’. This emphasises secure property rights as a key element in promoting economic growth and development. The British Prime Minister David Cameron states: “A genuine golden thread would tie together economic, social and political progress in countries the world over… Only then will people escape the fear of seeing their homes bulldozed just because they don’t have property rights.” Such rights would be underpinned by mapping and formal cadastre systems “…using satellite photos to map plots of land that will facilitate the creation of property rights”.

This is a familiar argument, resonant of that made by Peruvian economist Hernando De Soto who claimed that many resources in the developing world are ‘dead capital’, and so underutilised because private property rights have not be assigned. Only through titling programmes, he argued, would dead capital be transformed economic prosperity be realised. While extensively critiqued, this argument has captured the imagination of many policymakers in Africa, including in Zimbabwe where the ‘gold standard’ of private freehold tenure is often held up as the approach to follow.

The reviews, focusing on the post-2000 literature on Africa, looked at the broad relationship between property rights and economic growth, as well as specific areas, including rural and urban contexts, as well as the particular case of water rights. In addition, questions of empowerment were addressed. Just as many similar studies before showed that the evidence for a tight relationship between private property rights and economic growth and development is equivocal. Some studies show a positive relationship, others the opposite. And of course many other factors impinge. This is perhaps especially so for the relationship in rural areas, and linked to rights over land.

For those of us who have been immersed in this debate for years, particularly in Africa, this is no surprise. The 1980s for example saw a flurry of studies that looked at the benefits and costs of land titling, and the consequences for investment, including many by the World Bank. These showed again and again that, while improving security of tenure is essential, this does not have to be achieved through asserting private property rights, and indeed other forms of tenure, including common property, but also a range of registration systems can achieve the same end. The costs of cadastres and formal land titling systems are prohibitive, and can generate conflicts, and the processes of exclusion that occur can have significant negative effects. This is the conclusion drawn by many for Zimbabwe, despite the on-going, ideologically-driven debates.

A recent World Bank study looking at urban and peri-urban land in Burkina Faso and Mali came to much the same conclusion. Elsewhere in Africa, Rwanda has gained prominence as a case where land titling works, but there are also knock-on consequences especially for the poor and marginal of such efforts. In Ethiopia, a country with similarly dense populations in the Highlands, more informal registration systems seem to deliver good results.

The review looked at all these cases, and many more. The review was somewhat hampered, as it was obliged to follow a rather odd DFID-prescribed methodology (then in draft, but now formalised as a practice paper – which is admittedly an improvement on the draft) that had the effect of excluding large parts of the literature. This stipulated that ‘evidence’ as only in refereed journal articles, and had to be assessed in terms of empirically evaluated quantitative impacts of a property-growth relationship. This ‘evidence’ in the guidance is therefore privileged over other sources in terms of assessments of evidence ‘quality’ and ‘reliability. This limited the scope, and introduced particular biases of discipline and case study. The work of economists, and material from Ethiopia was thus over-represented and, according to the final report, “as a result, perspectives from some disciplines are not fully represented, notably history, politics, anthropology, cultural studies and sociology”. Given the subject area, rather a shame to say the least!

The focus on journal articles in particular databases also meant that large chunks of the literature were excluded, including all the fantastic books on the subject, both empirical cases and historical overviews, published over the years, not to mention the important project-based and grey material. To undertake a review on land, property and development in Africa and not include the key works of Sara Berry, Louise Fortmann, Pauline Peters, Elinor Ostrom and others was, to me and other advisors on the project, plain bizarre. Fortunately some flexibility was allowed and some elements of these key foundational insights were in the end included, but not without some difficulty, and some serious questioning of the draft DFID guidance.

Despite all these battles over the nature of evidence, the key findings of the rural review were fairly clear. It notes: “Overall, the evidence reviewed does not fully support the expected outcomes of the conventional economic view on the link between stronger property rights and investment gains”. In particular (from the executive summary):

  • “While present in some cases, links between reduced risk of expropriation and greater application of short and long term investments are not universal or unambiguously clear. There are numerous constraints preventing this causal link occurring, and there is some evidence of a reverse causal relationship: in some cases a greater risk of expropriation encourages certain types of investments”
  •  “The link between strengthening of tenure and increased access to credit is particularly weak, due to numerous other factors which prevent land from being successfully collateralised. These include issues related to credit supply, as well as borrowers’ willingness to mortgage their major asset, land”.
  •  “The evidence on the hypothesis that active land markets result from stronger property rights is mixed. There is some evidence which points to land markets leading to more efficient outcomes where these have not existed before (Ethiopia) but in the majority of cases, (informal) land markets are active under customary systems and there is little evidence to indicate that these are inefficient”
  •  “Whether titling or other tenure strengthening initiatives promise more benefits to women compared to existing tenure arrangements is highly context specific and depends on processes under which changes in tenure occur and are managed. The extent to which women’s greater access to land leads to higher agricultural production also does not appear to be supported by the literature”

No surprises there. What is perhaps more surprising is the wider persistence of the narrative about the role of private property, and especially titling, in economic development, including in Zimbabwe. This, as with the UK’s golden thread, is driven more by ideological commitment than an appreciation of the facts on the ground. Thus, with the benefit of evidence, the firm assertions of the golden thread narrative look distinctly frayed. Given its commitment to evidence-based policy, we will have to see if the statements of UK government officials, from the PM down, will be tempered by the results of its own review. I am not holding my breath. Equally in Zimbabwe, let’s hope that evidence prevails over assumption and prior bias in the on-going, fraught debate about property rights and land tenure reform.

This post was written by Ian Scoones and originally appeared on Zimbabweland

4 Comments

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4 responses to “Property rights and development: Lessons for Zimbabwe

  1. am

    Informal land markets are active. Communal areas do have buying and selling of land. The issue is more access to cheap credit with the ability of the lender to recover his capital if there is default. Without formal title the person who could use his land as a basis for cheap credit is disadvantaged. He cannot get the cheap loan which is usually through the bank. The bank cannot loan without some legal means of recovery on default.
    So the farmer is left with what?
    Micro-lending? Rates are not cheap but exorbitant.
    Contract farming? This does work but has the disadvantage that he is not able to use his land as a means of access to cheap credit from the bank and develop without being bound into a contract. It also has the question if the contracted farmer fails i.e. defaults, how do the contractors recover their credit which they have every right to do so.
    It seems that credit without risk to the borrower is in a lot of the objections to De Soto. That is really asking for aid or charity not credit.
    Property rights are dependent on history. Families have had access to land basically as their own for generations. It is passed on to the youngest son – usually. Where available the other sons get some fields also. When the land runs out they just get a stand and no fields. There is no land left so they just cannot get it without purchase. This is a hard fact of life. A vision of land in the hands of all is peasant-agrarian and not feasible. Populations increase and unless lebensraum is the proposed solution the country will eventually run out of land. Industrialisation is the creator of mass employment and without it there is only subsistence agriculture – an ever declining and reduction of the same area of land subdivided generation after generation to more and more people. Having just returned from Kenya and been in a rural area where land is now unavailable apart from sub-division by inheritance to uneconomic levels or by purchase the agragrian solution or idea of property rights as a right is clearly not possible. Eventually you run out of land.

  2. MrK

    Here is the other side of the ‘property rights through title deeds’ story:

    (GLOBALRESEARCH) Exporting Apartheid to Sub-Saharan Africa. The Legacy of Nelson Mandela (2013, 1997)
    By Prof Michel Chossudovsky
    Global Research, December 13, 2013

    ” The policy of land expropriation in Mozambique leading to the establishment of White Afrikaner farms using indentured Mozambican farm workers had the support of the ANC government. It also had the the personal blessing of President Nelson Mandela “who had delegated Mpumalanga Premier Matthews Phosa to the SACADA Board of Governors.

    ” The SACADA project was coordinated by the leader of the right wing Freedom Front and former South African Defense Force Chief General Constand Viljoen ”

    http://www.globalresearch.ca/exporting-apartheid-to-sub-saharan-africa-the-legacy-of-nelson-mandela/5361386

    Also, there is a short book on the IMF’s championing of security of tenure and title deeds, instead of land redistribution.

    The politics of land reform in Africa, by Ambreena Manji (2006)

  3. am

    I don’t know why they didn’t just give the land to the Mozambique farm workers with property deeds. With the title deeds they could have borrowed some money for development. It is a poor argument against property rights to use an example of what is bad in the allocation of property rights. This has been the main way of arguing against De Soto. He was advancing property rights out of concern for the poor and their need of development. He was not advancing property rights to allow massive land grabs or what is called new colonialism. Development can result from it if done properly.

    The recent budget in Zimbabwe is moving ahead with property rights. Many in the rural areas need access to cash for development and it will help them. The budget focused on A2 farmers but i think it should be extended to communal areas also. It is actually just formalising what already exists by giving a bankable title deed for what is already possessed by the person anyway.

    In a communal area adjacent to here there was considerable conflict in the 1980’s which was caused by the fact that some people did not have land and started fighting those that did have land. The government resolved the issue by asking for the title deeds given out by the British in the early 1900’s when the people settled in that area. Those who did not have title deeds were moved to new settlement areas. But the land could not have supported them all so it would have to happen anyway at some time.

    Hence the need for industrialisation also.

  4. Pingback: How have the ‘new farmers’ fared? An update on the Masvingo study I | zimbabweland

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