- - Sunday, December 21, 2014

ANALYSIS/OPINION:

The key to economic growth isn’t culture, access to the just exploitation of natural resources or even religion. Property rights trump all. The recognition and respect for property rights, and the expansion of property rights to the poor and unprivileged, is crucial to improving the living standard in developing countries.

Ultimately, if a society’s legal system does not protect property claims, the people won’t have much incentive to work hard, innovate and accumulate, and the economy stagnates. There is no progress. People struggling under the jurisdiction of corrupt or inept bureaucracies, often have no way to formally establish claims to their land, leaving them vulnerable to legal threats and even eviction.

Industrialized nations spend billions of dollars on land administration and reform programs, and a lot of this money ends up lining the pockets of corrupt politicians, even dictators and their cronies. Fortunately, decent people don’t have to depend on mere hope for a miraculous end to political corruption and the establishment of rights to their property. Technology now offers a solution.

The Cato Institute finds that inexpensive smartphones, like the Firefox handset that sells for $35, along with satellite technology, offer the tools to map out and stake their claim. Rather than relying on slow, outdated and corrupt institutions to impose formal property boundaries, these publicly available, open-source and decentralized tools give people in the Third World a way to establish and protect their property.

It’s not just that it’s a more efficient method. The approach mirrors the only way real property rights can be successfully established. Cato’s Peter Schaefer argues that “effective property formalization is only possible when the central government accepts the decisions of legitimate local authorities — formal or informal — and adopts their property allocations as the basis for titling.” Centralized solutions to fairly reflect local realities don’t work.

This new technology is even causing corrupt governments themselves to become more responsive to their constituents. Slum-dwellers in Kenya, for example, have used mapping technology to document their awful living conditions. “It can shame some of the people,” says one resident of a Nairobi slum. “Like, ‘Why didn’t you put up a light there when we told you that this area is dangerous?’ “

Closer to home, the American West is a useful case study of the proper establishment of effective titles to private property. As in many underdeveloped regions in the world today, Americans on the frontier had no access to formal governments to protect their property claims. Instead, communities created property registries and resolved land disputes based on community consensus. In his book, “The Mystery of Capital,” economist Hernando de Soto argues that “it took more than 100 years to integrate into one system the informal property rules created by millions of immigrants and squatters. The result was an integrated property market that fueled the U.S.’s explosive economic growth.”

Foreign aid programs that rob from the poor in rich countries to give to the rich in poor countries don’t work. They only penalize thrift and industry. What does work, however, is developing inexpensive and effective ways for the masses to claim, transfer and protect their property. Technology is cutting the red tape that has prevented effective claims in the past, and now provides a secure, transparent protection of property rights.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide