Demystifying the Mystery of Capital

Land Tenure & Poverty in Africa and the Caribbean

Robert Home, Hilary Lim

• Publisher: Routledge-Cavendish
• Year: 2013
• ISBN:
  9781135311025
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

This is an original empirical and theoretical study of the use of law to secure land tenure in the face of poverty, urban and peri-urban growth and changing social structures.

Chapter 1
Introduction: Demystifying ‘The Mystery of Capital’

Robert Home and Hilary Lim

The millions of people in the world who lack access to land where they can find secure shelter present a great global challenge to law, governance and civil society. About half of the world's population (three billion people) now live in urban areas, and nearly a billion are estimated to be living in informal, illegal settlements, mostly in the urban and peri-urban areas of less developed countries (DFID 2001). The UNCHS (Habitat) Global Campaign for Secure Tenure, launched in 1999, has been encouraging the progressive regularisation of unauthorised and informal settlements through changes in legal frameworks, policies and standards (Fernandes and Varley 1998; Durand-Lasserve and Royston 2002; Payne 2002).

The vast scale of housing and land tenure problems has moved both governments and donor agencies from direct provision of mass housing to a neo-liberal, facilitative and enabling role for the State. In turn, this has given rise to a greater acceptance of all kinds of self-help in housing, a policy shift traceable to the writings of John Turner in the 1970s (Turner 1976; Burgess 1982). These changes have been reflected in a change in terminology, shifting from ‘squatter’ or ‘slum’ areas to ‘informal’, ‘extralegal’ or ‘unauthorised’ settlements. If such areas are indeed ‘here to stay’ (to deploy the title of Hindson and McCarthy 1994), then governments need to find ways to regularise their land tenure arrangements.

The large donor agencies have long been committed to a framework of secure, transparent and enforceable property rights as a critical precondition for investment, economic growth and poverty alleviation, and continue to shape the agenda (Deininger and Binswanger 1999; Manji 2003). The linkages between land titling and development remained, however, a largely closed discourse within the communities of development policy-makers, until a more flamboyant, ‘magic bullet’, view of property rights appeared in Hernando de Soto's best-selling book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (de Soto 2000). De Soto claims that the registration of property rights offers the key to ending Third World poverty and creating happy capitalists everywhere. His seemingly simple recipe, which ‘neither condemns nor criticizes’ (Lea 2002), has proven attractive to donor agencies and influential Western opinion-makers (Clinton 2001; USAID 2002).

The de Soto argument addresses poverty in both developing and former Eastern bloc countries by claiming that property only becomes useful capital when it is recognised by a formal legal system. Without such a system, the property held by the world's poor is merely so much ‘dead capital’. They regard property as a thing – their homes or businesses mere material objects, devoid of titles and addresses; places to use and live in – but of no value in itself. Reinforcing his message with his typically vivid imagery, de Soto depicts the poor as locked in the ‘grubby basement of the pre-capitalist world’ (de Soto 2000: 55). The formalisation of property can raise them from the basement into the upper floors, where property is not a thing but a series of dynamic, interlocking relationships expressed in law (Lea 2002: 63–64).

For de Soto, there are six ‘property effects’ which make Western capitalism successful: fixing the economic potential of assets; integrating dispersed information into one system; making people accountable; making assets fungible (ie, capable of being divided, combined or mobilised to suit any transaction); networking people; and protecting transactions through the rule of law (de Soto 2000: Chapter 3). His ‘mystery of capital’ is the representation through documentary title of material property, liberating its economic and transactional potential to generate capital. He ambitiously compares the release of ‘dead’ property capital with nuclear fission: ‘similar to the process that Einstein taught us whereby a single brick can be made to release a huge amount of energy in the form of an atomic explosion’ (de Soto 2000: 37).

The de Soto thesis has its critics. Academics have found his methodology and supporting research suspect, and have disputed his basic argument (Bourbeau 2001; Gilbert 2002; Fernandes 2002). He evades some difficult issues, such as the cost of cadastral reform, the future of communal land tenure systems and the colonial sanctioning of pre-emption (Lea 2002: 63–65). He does not much question the role of capitalism and land title in perpetuating colonial power structures and inequalities, and indeed in creating greater inequalities, as the poor are pushed out by larger, wealthier and possibly foreign investors attracted by the latent capital in land. He seems to conclude that the benefits outweigh the possible costs for poor people, who can chose how to use their new-found capital (Asp 2003: 9–10), but does not address other difficult aspects of land and property systems, such as the farm-size efficiency debate or the continued strength of large-scale hereditary land-holding. Nevertheless, the power and simplicity of his arguments have commanded attention, and are stimulating much current research.

Land Tenure Regularisation in Practice

If integrated property systems are the key to capitalist economic development, then cadastral and land registration systems need to be strengthened, democratised and expanded. Rai has commented upon the reshaping of property in the colonial engagement: ‘modern capitalist relations required a “rational” systematisation of property relations; the inclusion of colonised States into the world economy necessitated recognisable property relations that could not be achieved without disturbing the “alien/uncivil” social relations’ (Rai 2002: 23). Where pre-colonial land tenure structures were acknowledged at all, they were reconfigured and reconstructed by the colonial administration into its perception of customary tenure, which it deemed to be holding back economic progress. Thus a formal legal pluralism was instituted, with the overlay of ‘received’ law from the colonial power. Postcolonial nation-States, especially if they claim democratic credentials and have to face conditions of a legal pluralism fashioned in colonialism, offering conflicting sources of legitimacy and often unpredictable or contradictory outcomes (McAuslan 2000).

The ‘jewel in the crown’ for British colonial land managers was the Torrens system of State-guaranteed property registration. The power of the idea of Torrens in the Western common law consciousness is evident from the recent claim, in the opening pages of an English land law text, that, ‘Land was made to be registered ... The attractions ... are irresistibly obvious’ (Sparkes 2003: 1–2). Developed (significantly) by a businessman for business purposes, the Torrens system embedded in the nation-State the concept, derived from John Locke, of possessive individualism and private property rights, free of feudal or communal overriding interests, which was receptive to and facilitative of the Western property categories of leasehold and freehold.

Adapting Torrens-style land registration to conditions of legal pluralism, however, is neither simple nor cheap. Land registration procedures are time-consuming and demanding. Specialists are needed to undertake field surveys, check cadastral plans, prepare legal documentation, keep and update records, transfer property, compensate for errors and enforce the law. With the complex associated procedures, often involving large land areas and populations, it is not surprising that cadastral coverage and land information systems in developing countries are weak. Numerous costly initiatives during the last decade to modernise land information in those countries have produced disappointing results and been questioned by both the potential beneficiaries and the cadastral specialists. Many postcolonial governments have come to recognise the limitations of State-directed land management. Recent innovatory approaches, in which the post-apartheid Southern African region (combining as it does ‘modern’ technological and educational expertise with the problems of less developed countries) has been a pioneer, have attempted to combine effective records with local community control, bringing land registration to the people on the ground (Christensen and Hojgaard 1997; Durand-Lasserve and Royston 2002). As de Soto puts it:

It is up to the government to find out what these extralegal arrangements are and then find ways to integrate them into the formal property system. But they will not be able to do that by hiring lawyers in high-rise offices in Delhi, Jakarta or Moscow to draft new laws. They will have to go out into the streets and roads and listen to the barking dogs (de Soto 2000: 189).

Such a participatory approach (listening to the people, rather than to the dogs, and to community-based organisations and urban social movements) requires a rethinking of professional roles, stakeholder relationships, dispute resolution methods and record-keeping systems. Unfortunately, if centralised land titling has proved expensive for less developed countries, the participatory approach, which has to take account of multiple claims to property rights, is unlikely to be less so and will require legal and regulatory reform. The ideas of de Soto depend upon an educated cadre of professional surveyors, adjudicators and other civil servants for their delivery (de Waal 2003).

Land titling refers to formal conferment of the right to use or own a landed property, normally expressed in legally recognised and accepted documentation. Owners can use the documents to access financial resources (through mortgages or hypothecation), enjoy security of tenure and undertake improvements to their property. In Trinidad, the Certificate of Comfort has since 1988 conferred on the holder a personal right that he will not be ejected from his house plot, unless it is necessary for him or her to relocate, in which case an alternative plot is identified and made available. The certificate was intended as a simple document with a measure of security of tenure pending more detailed legal processes. In Botswana, a Certificate of Right bestows a similar security on State land and a customary grant on tribal land. All such intermediate titles, often negotiated under traditional formalities and/or extralegally, have to be upgraded, legalised and formalised within a State-guaranteed land registration system.

Seeking the ‘Voice of the Poor’

Research for the World Development Report has drawn upon the exchanges and shared views of a range of poor people in diverse countries, so as to inform and contribute ‘lived experiences’ into the shaping of aid policy – ‘the voice of the poor’ (Narayan and Petesch 2002). As Dean argues, ‘in the 1990s participatory poverty assessments have re-established themselves as a qualitative investigative technique by which to define the task of poverty alleviation – as it were, from “the bottom up”’ (Dean 2001: 59). De Soto's call for the voices of the poor (or their barking dogs) to be heard resonates with this attention to everyday experience and popular discourse. The forces of globalisation and modernisation, and the crisis of the failing nation-State are reflected in individual experiences of everyday life. Recent research has attempted to relate the bureaucratic process of development back to the everyday lives of those in informal settlements, perceiving that social science has become detached from lived realities. Community-based participatory processes in poverty assessment and reduction draw upon the experiences of the poor themselves, seeing social policy as filtered through networks of relationships, and shared assumptions and meanings, which vary greatly between societies. Formal systems are played out in interaction with dynamic, shifting, informal cultures and structures, but also through the lives and strategies of individuals. One of de Soto's striking images is to liken the poor to a lake, and the makers of property systems to the engineers whose skills can transform that placid lake's potential energy into hydro-electricity, but this image is one which devalues and erases the diversity of the poor.

Various academic research tools have been developed in an effort to ‘prise open’ the different dimensions of lived totality, interweaving human and socio-political development: biographic method, oral history and postcolonial theory (Gubrium and Holstein 2003). Participative techniques can make manifest what might have been hidden by the deployment of more conventional tools of social science. Oral historians have adopted life-history methods as tools of emancipation and empowerment, particularly helpful in reaching those sections of society, in the past or present, whose experience could not be directly tapped through documentary or formal survey sources. Oral history can reveal what is important to ordinary people: ‘how nearly everyone planned, plotted and schemed to do as well as they could for themselves, their children, and for their communities’ (Barnes and Win 1992: 9). For it is ‘through such discourses that people disclose the different ways in which they negotiate the everyday realities of living in an unequal society’ (Dean 2001: 61). Another technique, the biographical interpretative method, seeks to differentiate the objective life story (identifying family history and key life events) from the ‘told story’, that is, how the individual presents his or her own story and its underlying themes and turning points (Chamberlayne and others 2001; Wengraf 2001).

These techniques have their limitations. It is worth remembering that:

These techniques have their limitations. It is worth remembering that: Life is not a (Western) drama of four or five acts. Sometimes it just drifts along; it may go on year after year without development, without climax, without definite beginnings or endings ... In life, we usually don't know when an event is occurring; we think it is starting when it is already ending; and we don't see its in/significance (Trinh T Minh-ha 1989: 143).

One of the ‘weapons of the weak’ (Dean 2001: 60) is resistance and mundane acts of sabotage against those they regard as oppressors (including researchers). This may involve turning the language of the powerful back on itself, or picking up the inflections in the researcher's words or behaviour and responding accordingly. Scott (1990: 4–5) deploys the term ‘hidden transcript’ to denote a discourse in popular vernacular that takes place ‘off-stage’, beyond the observation of the powerful audience, composed of speech, gestures and practices which may dovetail with what is revealed in the public but may also be contradictory or add subtle nuances. The hidden transcript is ‘the privileged site of non-hegemonic, contrapuntal, dissident, subversive discourse’ (Scott 1990: 25).

De Soto's focusing of attention upon the voices of the poor is linked to postcolonial theory, which seeks to fill the gaps and silences in narratives where a dominant culture and language speaks for submerged voices. The ‘Subaltern Studies’ historians (Guha 1987; Spivak 1994; Otto 1999), for instance, were concerned to provide a platform for those whose position was so marginal that their subjectivity and agency was obscured from view in most historical accounts. Spivak envisages the notion of the subaltern as ‘a space cut off from the lines of mobility in a colonised country’, which always has ‘something of a not-speakingness’ within it (Spivak in Landry and Maclean 1996: 288–89). Making space for excluded voices may be based upon an untenable assumption that ‘we possess a discourse which can engage with the excluded’, but even so it has the potential to disrupt the power of Western legal discourse and present alternatives (Lim 2001).

Constructing the Research

To investigate de Soto's arguments, the UK government's Department for International Development commissioned the research which is presented in this book within its policy theme concerned with increasing access by low-income households to adequate, safe shelter. The research contractor was first the School of Surveying, University of East London, and subsequently the Law School of Anglia Polytechnic University, and was undertaken between 2001 and 2004. The aim was to explore the role of local land titling in poverty alleviation in peri-urban settlements under different land tenure regimes, comparing the experience of African and Caribbean countries within the Commonwealth. The outputs included case studies, good practice guidelines and a strengthening of in-country capacity through workshops. The main research aim was to test de Soto's thesis of a linkage between land titling and poverty alleviation improvements through exploring the life experiences and attitudes of residents in informal peri-urban settlements.

The senior researchers comprised academics and professionals, one in each of the three case-study countries, together with three other subject specialists. It was felt important that those who undertook the field research for the three case studies shared a language and urban experience and possessed a similar cultural understanding to those from whom they sought information. The intention was to bring together the two professional and academic disciplines which...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Foreword
• Acknowledgments
• List of contributors
• List of acronyms and abbreviations
• Chapter 1: Introduction: Demystifying ‘The Mystery of Capital’
• Chapter 2: Outside de Soto's Bell Jar: Colonial/Postcolonial Land Law and the Exclusion of the Peri-Urban Poor
• Chapter 3: Land Readjustment for Peri-Urban Customary Tenure: The Example of Botswana
• Chapter 4: Inheritance, HIV/AIDS and Children's Rights to Land in Africa
• Chapter 5: Botswana: ‘Self-Allocation’, ‘Accommodation’ and ‘Zero Tolerance’ in Mogoditshane and Old Naledi
• Chapter 6: Trinidad: ‘We Are Not Squatters,We Are Settlers’1
• Chapter 7: Zambia: ‘Having a Place of Your Own’ in Kitwe
• Conclusions