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Presumption of a direct causal link between formalisation of property rights
and economic productivity is back on the international development agenda.
Belief in such a direct causal relationship had been abandoned in the early
1990s, following four decades of land tenure reform experiments that failed to
produce the anticipated efficiency results. The work of Hernando de Soto has
provided the springboard for this revival. De Soto argues that formal property
rights hold the key to poverty reduction by unlocking the capital potential of
assets held informally by poor people.
De Soto’s justifications of formal title do not differ much from justifications that
were advanced for ambitious land tenure reforms in various sub-Saharan African
countries, starting with Kenya in the 1950s. Introduction of formal title in the
African areas was seen as the key to solving problems of land degradation and
improving agriculture by providing farmers with security of tenure that would
create incentives for further investment in the land.
This paper argues that there are five shortcomings in both the old and contemporary
arguments for formalisation of land title. First, legality is constructed
narrowly to mean only formal legality. Therefore legal pluralism is equated with
extra-legality. Second, there is an underlying social evolutionist bias that presumes
inevitability of the transition to private (conflated with individual) ownership
as the destiny of all societies. Third, the presumed link between formal title
and access to credit facilities has not been borne out by empirical evidence.
Fourth, markets in land are understood narrowly to refer only to ’formal
markets’. Fifth, the arguments in favour of formulisation of title as the means
to secure tenure ignore the fact that formal title could also generate insecurity.
