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Land Policy and Land Reform in Sub-Saharan Africa: Consensus, Confusion and Controversy - November 2002
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2. Property rights
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Nobody owns the land
Why do we often hear in Africa that “nobody owns the land”? Does this mean that there is “tenure insecurity”—are people not sure about their rights to use the land? Or does it mean that anybody can occupy any land they want—is it a “free for all”?
Not at all. If you would ask around a typical African village, you would immediately answer no to these questions. Instead, you would soon pick up on an important principle: whereas no individual will say that he or she “owns the land”, every man and woman has a right to reap what he or she sowed. People have a right to the fruits of their labor. A farmer sows maize, weeds, and harvests, and she owns the harvest. There is no quarrel at all about who owns the harvest. That property right is very secure2. Because if my goat comes and grazes in her maize field, I’ll get a hefty fine. I have taken someone’s property.
But owning the fruits of your labor is very different from saying that someone owns the land. With “owning the land” people usually mean that pretty much all possible benefits that come with it or from it are the property of the owner. In that case, a farmer also owns the trees and the fruits of the trees that grow on her land, or the water in the pond that is on the land, or the gold that may be found deep inside her land.
All these rights—think of it as a “bundle” of rights—relate to activities that could take place on the land, or with the land, and yield an income. This is why researchers would rather not speak about “ownership”, which is rather vague, but about a particular “bundle of rights which give rise to an income stream”. And researchers will always ask what exactly is in the bundle and what is not.
Because if you think about it you will know that the bundle always differs from place to place and from time to time. Both in the developing and in the developed world. Sometimes you can “own” a plot of land but you are not allowed to farm on it—you are only allowed to build a house on it. And in some places you cannot just build any house—it has to be a house of a certain type and a certain color.
In other words, there is no universal definition of the bundle of rights we loosely refer to as “ownership”. So Africans are right: nobody owns the land. And that is the first area of consensus.
Define and enforce property rights so that they are secure
To define what "ownership" means in a particular context, we need to ask the basic "who, what, where, when, and how" questions about the particular property regime at hand.
Firstly, who defines it? Property rights are essentially social rights: they define what an individual or a group of individuals can or cannot do with a certain thing. And this is always defined in relation to others-for instance, you cannot come and harvest my maize. My right is your obligation. Defining those rights and obligations is up to the community, or, when property rights become more formalized and legislated, the state. Defining those rights is not up to the individual-then it seizes to be a right.
Secondly, what activities and income streams are included? In other words, what exactly is in the bundle of property rights we are talking about?
The "where and when" of the property right needs to be specified. Where can the activity take place? What is the time period defined for the right to undertake a certain activity and reap its rewards (or incur the liability)?
Finally, how is the property right acquired? Through sale? Through inheritance? By virtue of you belonging to a certain group? Under "good faith" occupation? Because you were there first? Because you invested in it? All these seemingly simple questions in fact represent long-standing legal traditions and principles about ways in which property rights can be established and subsequently protected.
Do researchers and land policy specialists have any particular recommendation as to how these property rights questions should be answered? Yes, but up to a point.
There is strong consensus that these property rights should be well-defined by the community (or the state), accepted and understood by all, and be able to be enforced3 .
When a community, or the state, is able to enforce what it decides, property rights acquire a very desirable characteristic. They become certain-tenure, the holding of the right, becomes secure4.
A farmer needs to know that if she sows maize, she will own the harvest-this way she will do her best to farm well. And she will logically start thinking about future seasons and invest in maintaining the fertility of the soil. Anything that makes a farmer worry about whether or not she will be able to reap this harvest-this year and all the next years-will make her wonder about investing in her crop and in her field.
So if a property right is insecure, investment will fall. People will stop caring for it. This is why we stress that property rights need to be secure.
And if there is no security at all, we end up in a situation in which there are no property rights at all-a situation of open access. Unfortunately, this situation is often wrongly defined as the "tragedy of the commons" giving the concept of common property a bad name. But it is not the tragedy of common property rights, it is the tragedy of open access, which occurs when communities are no longer able to define and enforce the property rules around certain resources. It then becomes a free for all, or open access, and everybody has a rational interest in depleting the resource as much as possible, because if they don't, somebody else will5.
Confusion about private and common property
This brings us to an area in which there is neither consensus nor controversy-only confusion. And seemingly with no end in sight.
The confusion basically stems from prejudices and perceptions. When we imagine "private property", we usually imagine two things. First, we associate the concept with individual freedom. Under private property, we imagine, a person can do as she pleases. For instance, we think of private property as a tradable right which can be sold by the individual to anyone, without asking anybody else for permission to do so. And we also associate it with a sign that says "Keep Out. Private Property."-in other words, with a territorial boundary that excludes others.
But when we think of common property, we imagine non-tradability, and either very restricted permissible use of the asset, or a complete free for all leading to degradation.
Why are these associations prejudiced? Because in reality the presumed unfettered sale of private property will have restrictions. For instance, restrictions on land sales to foreigners exist in many other countries in the world, including many states in the United States. These restrictions can range from a total ban on sales to foreigners to the requirement of obtaining a special permission. Or they can mean that foreigners are not allowed to obtain freehold, only leases.
Common property regimes do the same: they either ban the sale of property to outsiders, or require you to seek a special permission. But common property regimes can, and often do, allow the sale of the "shares" to others, just like private property regimes. The only difference then is that in the case of private property you seek permission from the state, and under common property you ask the community. Same difference.
We also know that everywhere in the world what you can and cannot do with your private property is always regulated, from zoning laws to building restrictions to prohibitions to hunt foxes with hounds. So same difference again.
And finally, the private property sign "Keep Out" may also have some small print attached. For instance, the state can order you to allow public access on your private property, say for hiking or fishing, or to allow another private property right on your private property right, say a mining right.
So in the final analysis, what individuals can and cannot do is determined by the state in the case of private property, and by the community in the case of common property. That is really all there is to it.
To add to the confusion, property rights can be individual or common. Simply put, a community, or the state, can decide to give certain rights to something to an individual or to a group. It may allocate a right to produce crops on a particular plot to an individual, but allocate a grazing area to a group-for instance, all families living in the community. And, as I said before, sometimes these individual rights, within a common property regime, can be inheritable, exchangeable, rentable and even saleable6.
So common property does not imply that the entire bundle of rights are only given to the group as a whole, or that the community engages in collective production7. Within a common property regime, rights can be assigned to individuals, like in the case of a housing condominium in the United States. By the way, how would you describe your purchase of an apartment in a condominium in Washington D.C. to a visiting African scholar? As a relic of some quaint and inefficient common property regime, or as a particular shared ownership option under a market-based modern private property regime?
So what is the non-confusing definition of common property? Common property is simply the property of a group, or, to put it differently "common property represents private property for the group" 8. In theory, individual rights under a private property regime are regulated by the state, and under a common property regime by the community. In practice, the key to the definition of common property usually lies in the exclusion of those who are not a member of the community. So if a sale takes place to a member outside of the community, such a sale will need to have the consent of the community, which will need to accept the buyer as a new member.
An extension of common property is public property or state property. This is in essence common property but with the community now being a much larger community, say a city, or the nation as a whole, formally represented by the state.
Private property is not always necessary or even desirable
Back to consensus and controversy. Before digressing into the confusion between common and private property, we had said that there was consensus around the need for clarity and security on the "who, what, when, where and how" of property rights.
The earlier consensus among development practitioners was that such clarity and security was best guaranteed under a formalized (i.e. documented) private property regime. And that economic growth and environmental stewardship would be further promoted by making the bundle of rights as large as possible, territorially exclusive, of infinite duration and fully tradable.
This earlier private property consensus has broken down. Why?
Upon further reflection, it seemed overkill to suggest that asking for security meant asking for the largest possible bundle of property rights. Because to care for the fertility of your maize field, you do not need to own the mining rights as well.
This is important in many parts in Africa. Pastoralists, for instance, practicing "transhumance" in arid and semi-arid areas, need access for grazing and watering their cattle during certain times of the year in certain places. They do not want crop cultivation rights, and they do not want a fence around their potential grazing area.
Why? First of all, they specialize in cattle production, letting others specialize in crop production. They, and society at large, would not want to lose the profits from specializing in their comparative advantage. Second, pastoralists do not want fences because they know that their potential grazing area given highly variable rainfall would be enormous. They know that the fence could never be large enough. Just as it would be silly for fishermen to partition sea plots with floating boundaries, knowing that fish wouldn't abide by the boundaries (they are a "fugitive resource"), it would be equally silly for pastoralists to go for fences. What pastoralists want are property rights that match their activities: access rights and rules to prevent over-use of the resource. And to start with, pastoralists would like their historic economic rights to be respected by the state and farming communities9.
Traditionally, pastoralists and farmers would sit down to discuss how to make sure that both parties could exercise their rights without getting in each other's way. This type of coordination is of course best achieved under a common property regime. But in some parts of Africa, supported by the earlier private property consensus, pastoralists have been told to become sedentary farmers, or fences have been erected and new property rights created which obstruct the movements of the pastoralists, essentially depriving them of access rights they traditionally held. And sometimes the resulting tensions have led to violence.
Hence the new consensus. It recommends that Governments create the possibility of resolving such potential conflicts and support dialogue so that communities can find ways of deciding together how the bundle of property rights should be allocated and enforced10. The idea of taking down existing fences to increase animal production and reduce environmental degradation in semi-arid areas is a promising one, but has so far mainly been applied in game farming.
The old consensus also assumed that environmental degradation was worse under common than under private property. Empirically, this assertion cannot be confirmed. Soil degradation on private property in Nebraska can be just as substantial as on common property in Namibia11. And there are many examples in the world of natural resources being managed by a group in common and in an excellent way. The Swiss Alps have been under common property since the Middle Ages. You will agree with me that they don't exactly look like they have been affected by the "tragedy of the commons."
The other idea under the old consensus was that investment incentives would be strongest, and economic efficiency best served, if the property right was of infinite duration and freely tradable. This way the productivity of the resource would be maximally exploited, and if a particular owner was unable to extract the maximum profits from it, the property would be sold to someone who would.
In a world of perfect markets, the argument holds. But in our imperfect world, it breaks down. For instance, one of the great advantages of many common property regimes in Africa is a risk insurance function-community members can claim access to land for farming when necessary. In the absence of a formal social security scheme, this insurance function of common property regimes has reduced the poverty impact of the many external shocks and macroeconomic crises that have hit Africa.
Similarly, in societies that do not have pension schemes, the pivotal role that the elders play in the allocation of individual property rights to land ensures that they have a strong bargaining position vis-Р°-vis the young adults. The elders use these powers to ensure that the young contribute to their "pension".
Common property regimes often constitute very important social insurance mechanisms for the old and the poor-we need to be mindful of this when we add up the costs and benefits of moving to private property12. Finally, just as it was wrong to vilify common property regimes, it is equally misguided to romanticize them. Yes, common property regimes can provide important insurance functions. But they can also be used to exclude people, especially those who are not "real" members of the community, for instance women, especially widows, and outsiders.
To sum up so far, all we have said is that property rights need to be secure. They become secure if they are well-defined by the community (or the state), accepted and understood by all, and be able to be enforced. We have not said that they should confer full "ownership" and be private. That would be misunderstanding the consensus.
Formalizing property rights is not always necessary or even desirable
Another controversy was about titling, i.e. creating formally documented proofs of "ownership". During the 1970s and 1980s, there was a consensus on the need to formalize property rights.
This consensus has changed. For instance, many researchers have adopted a very pragmatic attitude to the issue of formalization. They would simply ask if formalization would increase tenure security and lead to collateralized lending. Is security higher if someone has a formal property right-a title deed or a lease, which is issued by the State? Not necessarily. Some title deeds are not worth the paper they are written on, and may create more confusion than security13 . And some property rights which are only informally agreed on and enforced can be very secure, lest you want your kneecaps broken.
But don't banks require title deeds as collateral for lending? Sometimes they do, and sometimes they don't. Sometimes a bank will only look at the intrinsic merits of a project proposal or look at track record that someone has in repaying past loan. Think of the way US credit cards are managed, or some of the success stories of micro-finance. Successfully funding small-scale farming does not necessarily need a title deeds register and collateralized lending. There are many examples of successful lending to farming that were not based on mortgaging title deeds. The history of cooperative banking in part of Europe is a very good example. There, when farmers found that banks would not lend to them on an individual basis, farmers invented the concept of join liability. They went to the banks and said: lend to us as a group, and we will all be responsible for repayment. In this way, if one of us defaults, and we as a group do not solve this problem, you can punish us all.
There is another reason why bankers may not be very interested in mortgaged title deeds. Presumably the idea of using a title deed as collateral implies that when the farmer cannot repay the loan, the bank seizes the collateral and recoups its money. But that presumes a lot. Imaging a small farmer in a village in Burkina Faso having a title deed, and defaulting on her loan from a bank. Would the bank go in and seize her groundnut plot and auction it off to the highest bidder? No. If the banker tried to do that, he would either be laughed at, or worse, chased out of the village. He would be forcefully reminded that nobody owns the land, least of all some banker from town.
So we should not exaggerate the necessity of formalizing property rights14. But this does not of course mean we are against it. As markets become more accessible or as population pressure grows, people intensify their agricultural practices and start to invest more in their natural resources. The value of the resources goes up, and that means often that the potential for competition and conflict grows. Sometimes communities are perfectly capable of handling this and continuing to enforce and adapt the traditional rules that govern property rights, but without needing documentation, administrative courts, etc.
But sometimes the capacity of the community to manage competition and conflict can decline. Or it can be undermined by intervention by external forces, or even by the state itself. As a result, the community, or the state, may decide that it is high time that rules become more formalized, documented, and more easily enforced in a court of law15. In fact, one famous, Nobel Prize-winning economist16 has always argued that it was this process of more carefully defining and formalizing private property rights which has been one of the driving forces of economic development in world history.
We started out by saying that researchers had ideas about the definition of property rights, but up to a point. We have reached that point now. Because the definition of property rights is in essence a definition of social relations. At the end of the day, this definition is the business of the community (or the state). For instance, a community may have very definite notions about fairness, and this will, and should, profoundly influence the decision about property rights regimes and the distribution of rights within that system.
Let us briefly summarize what we have said so far on property rights. They are essentially rules that govern relations between individuals and they should therefore be defined by the community (or the state) that such individuals belong to. Property rights should be clearly defined, well-understood and accepted by those who have to abide by them, and strictly enforced. Property rights can be private or common or state. Most important for sustainable development is that property rights are secure. And as development progresses, property rights tend to become more individualized and formalized, but there are no short-cuts to this process-introducing formal and individualized property rights in situations where there is really no need for them is just a waste of time and money.
I would argue that there is consensus around what I have said so far. So where is the controversy?
Footnote:
- The security of this property right is derived from the person’s membership of the community. The right is usually inheritable and secure, but it is not necessarily a right to a specific parcel of land. Once households become more sedentary and agriculture intensifies away from long forest fallow, property rights to particular parcels become more permanent and inheritable.
- For an application of these principles to successful community management of natural resources, see for instance Orstom (1994).
- Sjaastad and Bromley (2000) remind us that we should define "security" as assurance alone, and not extend its meaning to other dimensions of a particular property right, such as its "breadth" (how many different activities are captured under the right-the "size of the bundle") or its duration.
- Hardin, 1994, even though he has given common property a bad name by coining the phrase "the tragedy of the commons"-it should be rephrased as "the tragedy of open access".
- Individualization is driven by the intensification of agriculture caused by population growth and increased market access (Boserup, 1981; Bruce and Migot-Adholla, 1993). Typically, communities start by individualizing permanent residential and garden plots, then allocate individual rights to nearby fertile farming plots, and progressively extend individualization to the remaining areas under community ownership, until only wasteland and land for common infrastructure and facilities is owned by the community (Binswanger and Rosenzweig, 1986; Binswanger and McIntire, 1987).
- In fact, whereas many areas in Africa fall under common property regimes, the African experience with group farming or collective production has been an unmitigated failure (e.g. Ujamaa in Tanzania, and numerous cooperative farming experiments elsewhere in Africa). What is sometimes found, though, is a system under which people set aside some time to collectively work a particular field for the traditional head of the village, to be used by him as a food security plot for the village or needy households.
- Bromley (1992, p. 11).
- Van den Brink, Bromley and Chavas (1995) coined this problem the "Cain and Abel" problem-the first recorded clash between a pastoralist and a farmer in history.
- Recent livestock policy research containing the "new consensus": McCarthy et al. (editors), 2000.
- Daniel W. Bromley (mimeo)
- Jodha (1992).
- Bruce, Migot-Adholla and Atherton, 1993.
- Bruce and Migot-Adholla (1993), summarizing recent research on the security of customary tenure in Africa, conclude that in many parts security of customary tenure is quite secure and does not seem to be in need for a wholesale "replacement" with formalized property rights. Rather, an adaptive and incremental policy reform approach is suggested.
- Examples of World Bank-assisted programs to assist communities to register property rights: (i) Cote d'Ivoire, where both individual and communal rights are registered under customary law; (ii) Colombia: titled natural resources exclusively to Afro-American and indigenous communities rather than to individuals; and (iii) Mexico: choice between individual and communal title, with well-defined mechanism which allows to make the transition between both-more than 50 million ha were registered in about 6 years.
- Douglas C. North. More recently, Hernando de Soto has been arguing the same.
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