Changing Property Rights: Reconciling Formal and Informal Rights to Land in Africa

Abstract

Policy planners in Africa confront an interesting puzzle. At the same time that many African societies are changing social norms and indigenous rights in property to more individualistic systems approaching privatization, we find increasing numbers of societies backing away from government sponsored formal systems of freehold land tenure. Even more curious, we often find that the very same societies that evolved indigenous privatization are now shunning government programs. Obviously, something about the supply of formal rights proposed by governments is not meeting the demand for property right change at the local level. Some simple economic explanations provide partial answers: the transaction costs of the registration process are high and lagging markets in essential complementary factors of production (particularly capital) may be constraining growth rather than land. But these explanations are not the whole story. Most agricultural production in Africa is still kin-based and highly risky. Lineages are not just kinfolk, they share some the characteristics of corporations: they cooperate in labor, risk management, and investment. Fundamental to the high level of trust and cooperation that such systems enjoy are basic guarantees of subsistence in the short run -- through access to land-and the long-run -- through inheritance of that land. Property right changes that violate this complex of complementary interdependencies are doomed to fail. One need not interpret this failure as violation of a sacred "moral economy"; one can as well impute a cost-benefit calculus to farmers' demands for property rights. But one must include in this equation the costs and benefits as they are realized by the farmer, that is, filtered through the calculus of kinship. The fit between formal and informal institutions is key to the former's success.

Additional details