Sunday, November 23, 2008

Titling's reverse causal effects on the poor

This is a conventional view advanced by the World Bank: land rights are more secure and transferable through the titling process - that is, assigning titles to parceled bits of land so that urban and rural poor can then use the land.

Titling land provides a guarantee to the informal urban and rural markets that the fruits of their investments will not be appropriated by the government or private land holders, and this can be done with a "flick of the wrist" as Hernando de Soto writes. All Third World governments and lawyers need to do is look at squatted land and write up a legal sheet documenting their formal ownership and welcome them to the private housing system.

Yet for almost every study showing that the titling process leads to greater security of land tenure, there are studies showing that causality runs the other way around. Instead of increased security of land tenure (titling is one of several ways to do that) causing long-term investment, it has been argued that investments themselves cause security of land tenure. The causality is reversed.

One example of this are the studies that have looked at investments in cash crops. Planting profitable trees - coffee, eucalyptus, for example - enhances tenure security (Atwood, 1990; Besley, 1995; Otsuka et al., 1997; Brasselle et al., 2002; Sjaastad, 1997; Place, 2001). Other findings show that tenure insecurity has little effect on the decision of farmers to plant trees and invest in the land (Holden, 2002). These findings cast considerable doubt on the need for embarking on ambitious land registration and titling policies, if the goal is increasing investments or standards of living.

Most of the literature finding a link between tenure security and long-term durable investments in the land have sidestepped the question of causality and have jumped to the conclusion that widespread titling should increase tenure security - (and do not mention titling's adverse effects on landless, indigenous and the new urban poor.)


Muser said...

Thanks for the post. How does (if at all) the idea of "the commons" (land available to common use) figure into these two models?

kendle said...

It's also interesting to consider how land rights have historically worked against minorities and the under represented- for example, in much of Africa, secure land rights took the decision making power and profit away from women, who had been the primary cultivators and labor. Instead they were granted to men, which completely altered household and profit dynamics. Land rights also allow for legal land consolidation, causing the law to side with the owners rather than the workers/squatters/indigenous people. Land rights are useful for encouraging investment, especially for the long term, but they also provide legal barriers and structures for the people who are overlooked by law makers, who often need the source of productivity to sustain their livelihoods, not just make profit. They are a useful tool but perhaps an often misused and misguided one?

Anonymous said...

Interesting post. You might be interested in the work of a Seattle-based org called the Rural Development Institute that considers land rights to be the foundation of poverty alleviation and works with governments to help create better laws and policies to help the rural poor.

Acumensch said...

Thanks for commenting everybody.

Hans - you would think "development" is a process from collectivization to individualization from reading the Bank's articles. They have done as much as they can to discredit the idea of collectively-owned or cooperative land holdings. Deininger (2003) for example. I'm looking into whether any state has given squatted territory "reservation" status, kind of like native reservations.

Kendle - I've noticed the Bank authors never put "it's good for women" as an advantage of land titling. Because they know that men will clear areas of women so that no woman will own formal property. The one advantage the Bank has consistently argued is that titling will bring access to credit, which has only been true for land holdings over 20 hectares. It's unlikely URBAN squatters would ever have enough property (20 hectares) to use it as collateral at a commercial bank.

Anon - Seattle-based, that's excellent because I'm not far from there. I'm interested in urban development more so than rural though. It's just that most of the studies on land titling have come from the rural informal sectors. Thanks for the plug!

kendlina said...

The Urban Land Institute- seattle location


Anonymous said...

oh and you may be interested in this, not because you agree or disagree, but because of the information and the fact thats its about the local area

Anok said...

It's an interesting premise, but where are you going with it, and how effective (really) is titling?

Think, eminent domain. Unless I've totally misread your post to mean something else, which is possible.

Acumensch said...

Thanks again for the links, Kendle and Anon.

Anok, I'm writing more on titling soon. I don't think titling is effective, and I think by eminent domain you meant the governments would steal the land back or just develop on poor peoples' land whenever they want, and I think that's true.