Economic Analysis, the Legal Framework and Land Tenure Systems

Abstract

D ISCUSSIONS of the efficiency of various systems of land tenure are marred by all sorts of imprecision in analysis. Economists have developed a clear notion of economic efficiency but discussions of land tenure invariably bring in some sociological and wealth-distribution constraints when discussing the efficiency aspects of tenure systems. Social anthropologists and others stress that certain tenure systems are integral parts of social systems involving such things as insurance for old and young, with the implication that even though these tenure systems might not facilitate (pecuniary) wealthmaximization, yet the non-pecuniary wealth facilitated provides "enough" compensation in some general welfare sense. I shall discard such sociological arguments because I believe that there is no reason why the sociological benefits of particular tenure systems cannot be obtained by some alternative arrangement while creating a tenure system that is designed to facilitate wealth maximization and wealth increases.