Security of Property Rights, Ownership, and Development:
A Misguided Paradigm
Property rights have been at the epicenter of the theory and practice of development, especially since the emergence of the neo-institutionalist paradigm. Securing property rights to ensure development has meant mainly the extension of ownership rights, primarily to land, to increasing numbers of the population in developing countries. To the great surprise of property rights advocates, most titling programs have failed to generate expected results, often creating deep social dislocations. Current thinking on the land question seems to be skeptical and cautious. Given this theoretical confusion, it is important to revisit the historical record that generated the neo-institutionalist paradigm. Little in this record suggests that ownership is the key mechanism that enabled growth in the European case, and it is not clear why it should be expected to do so in other parts of the world. The crucial point to emerge from the European case is that it is tenancy, not ownership, that provided the incentives for growth and gains in efficiency. Moreover, given the English experience with communal agriculture and its replacement with individualized plots through enclosures, its parallels with the developing world are striking and potentially fruitful. The implications of this revision are important for our understanding of the preconditions of development. However, they are not necessarily comforting as far securing better living conditions for producers is concerned. The assumption that economic growth means greater “security” of property rights for individual actors is deeply flawed.
A Misguided Paradigm
Property rights have been at the epicenter of the theory and practice of development, especially since the emergence of the neo-institutionalist paradigm. Securing property rights to ensure development has meant mainly the extension of ownership rights, primarily to land, to increasing numbers of the population in developing countries. To the great surprise of property rights advocates, most titling programs have failed to generate expected results, often creating deep social dislocations. Current thinking on the land question seems to be skeptical and cautious. Given this theoretical confusion, it is important to revisit the historical record that generated the neo-institutionalist paradigm. Little in this record suggests that ownership is the key mechanism that enabled growth in the European case, and it is not clear why it should be expected to do so in other parts of the world. The crucial point to emerge from the European case is that it is tenancy, not ownership, that provided the incentives for growth and gains in efficiency. Moreover, given the English experience with communal agriculture and its replacement with individualized plots through enclosures, its parallels with the developing world are striking and potentially fruitful. The implications of this revision are important for our understanding of the preconditions of development. However, they are not necessarily comforting as far securing better living conditions for producers is concerned. The assumption that economic growth means greater “security” of property rights for individual actors is deeply flawed.