January 13, 2015 Print

One of the biggest obstacles to economic growth in developing nations is the lack of clearly defined and delineated property rights, preventing entrepreneurs from being able to depend on stability, consistency, and recognition under the rule of law. It may seem obvious to view this as a problem requiring a government solution, but a recent study from the Cato Institute argues that the bureaucracies of developing nations are often the cause of this problem rather than its solution, and that property rights may be better defined and protected by registering land claims with the decentralized use of new technological tools.

Written by Peter Schaefer, founder and CEO of the Globaland Group, and Clayton Schaefer, Globaland geographic information system specialist, the study explains how informal landowners can use inexpensive hand-held devices to title and register land.

An economy can only grow when land and other resources are put to new uses, altering the patterns of the past and flowing to more productive purposes. In many developing countries, however, it’s not always clear who owns or has the right to use specific parcels of land, so economic development is often informal and transitory.

“In many of these situations, access to land becomes difficult, informal owners are subject to extortion or expropriation, economic activities must be concealed or camouflaged, and open conflict can erupt,” the authors note. The result: billions of people worldwide squatting on land that is nominally owned but unused by other public or private entities.

“So if mass removal isn’t a realistic option, governments have only two choices: formalize tenure or ignore the informal settlements,” the study continues. “All too often governments choose the latter because there is another political reality. Enormous political and economic power is derived from the power to make arbitrary political decisions concerning land rights instead of relying on legal decisions made according to the rule of law.”

In such scenarios, the rich and politically connected benefit by having their own claims recognized at the expense of their poorer neighbors. By organizing informal communities, however, and enabling them to stake a claim by recording their longstanding actual use of land, “they are better able to obtain formal authority from the local government.” This model has already been used in India and Kenya, and there is a long historical tradition in the American West and elsewhere of informal claims to land being later formalized.

“Using inexpensive hand-held devices and satellite imagery, informal communities can now take the first step by self-mapping their property claims,” the study concludes.

Read the full study, “An Innovative Approach to Land Registration in the Developing World: Using Technology to Bypass the Bureaucracy,” by Peter Schaefer and Clayton Schaefer.