How handing out titles to the poor can make the rich richer. By Howard Stein, Ann Arbor, Faustin Maganga, Rie Odgaard and Kelly Askew.
There was a time when land reform, the world over, focused on redistribution to the poor and dispossessed often from large scale and wealthy landowners. Today reform in Africa focuses more on formalising property rights by demarcating boundaries, allocating individual plot titles and expanding legal institutions to adjudicate in land disputes. None of this helps people in need but plenty of it helps those with plenty.
Why and how has this come about? Who are the key players? What has been the impact? What role has mainstream neoclassical economics played in this focus on reform? What are the vested interests that gain from focusing on land reform in this manner? What are the alternatives that could help improve life for poor farmers?
Proponents of formalisation argue that:
- owners of plots that are surveyed to establish fully their legal status and financial value are able to access the full benefits of land sales and rental markets;
- formalisation, ups efficiency by cutting transaction costs and boosting rental and land markets;
- greater security of entitlement that arises from formalisation will increase the incentive to invest and generate higher productivity and incomes for poor people; and
- titles will provide collateral to access loans, secure land rights for marginalized sectors of society such as women and livestock farmers and reduce land conflicts.
They argue also that formalisation will enable poor people to lift themselves out of poverty.
The premise of this argument is that the poor often hold significant assets such as land that are not formally recognized. And with proper legal titles poor people will be able to liquidate their assets readily to raise cash, start up new business with the money or use the titles to borrow funds to invest in land and raise productivity leading to higher incomes.