Property, Poverty, and Development

Catalog description

This seminar is for those who are interested in property ownership and the role that it plays in economic development. Case studies will be taken from across the developing world, with a particular focus on Latin America and the Caribbean. Since the time of the philosopher and social reformer, Jeremy Bentham, we have understood that the poor, like others, are more likely to invest in property if they own it. Hernando De Soto has famously argued that non-transparent legal systems, and titling systems in particular, pose severe impediments to the participation of the poor in capitalist economies. Without title, the poor are less likely to invest in their properties and are often unable to access credit. De Soto estimates that for the developing world, the total value of real estate held by the poor (but not formally titled) is more than 20 times foreign direct investment and more than 90 times all foreign aid for the last 3 decades. The extent of De Soto's influence can hardly be overstated. In the policy world, his work has inspired decades of World Bank-funded titling programs across several continents. In the academic world, his work has inspired soul-searching among economists and development scholars across the methodological spectrum. Some have argued for communal systems of collective land tenure. Others dispute his estimates of property currently owned by the poor and argue that granting legal title has not improved credit access. Some have also argued that titling systems simply replicate current inequalities. Moreover, in societies where women work the land but do not have equal status in society or in law, their land claims are unlikely to be recognized. Yet others have criticized De Soto's emphasis on titling arguing that land titling by itself is unlikely to make a significant impact on poverty reduction without parallel reforms such as improving access to the formal banking system, financial literacy and streamlining business regulations. Finally, others question whether extensive investments in titling systems represent a prudent investment in the conditions of extreme economic scarcity that characterize many developing countries, suggesting that in such circumstances, a more "modest" approach to legal reforms may be more prudent. In summary, this seminar will focus on De Soto's ideas on the importance of property reform in combatting poverty and the critiques, particularly in the context of Latin America and the Caribbean.