Abstract

Most of the land reforms of recent decades have followed an approach of “formalization and capitalization” of individual land titles (de Soto 2000). However, within the privatization agenda, benefits of unimproved land (such as land rents and value capture) are reaped privately by well-organized actors, whereas the costs of valorization (e.g., infrastructure) or opportunity costs of land use changes are shifted onto poorly organized groups. Consequences of capitalization and formalization include rent seeking and land grabbing. In developing countries, formal law often transpires to work in favor of the winners of the titling process and is opposed by the customary rights of the losers. This causes a lack of general acknowledgement of formalized law (which is made responsible for deprivation of livelihoods of vulnerable groups) and often leads to a clash of formal and customary norms. Countries may fall into a state of de facto anarchy and “de facto open access”. Encroachment and destruction of natural resources may spread. A reframing of development policy is necessary in order to fight these aberrations. Examples and evidence are provided from Cambodia, which has many features in common with other countries in Asia and Sub-Saharan Africa in this respect.

Highlights

  • During recent decades the efforts to formalize property rights in developing, threshold and transitional countries have increased significantly (e.g., Thailand, Indonesia, Philippines, Ghana, Bolivia)

  • Sustainability 2012, 4 projects that formalize property rights refer to a privatization approach

  • Privatization comprises water resources, among other things, which are often connected to the property rights on land

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Summary

Introduction

During recent decades the efforts to formalize property rights in developing, threshold and transitional countries have increased significantly (e.g., Thailand, Indonesia, Philippines, Ghana, Bolivia). Sustainability 2012, 4 projects that formalize property rights refer to a privatization approach. Privatization comprises water resources, among other things, which are often connected to the property rights on land. Due to land scarcity and an increase of land values, the proponents of privatization expect that the marginal benefits of private ownership might outweigh its marginal costs [1]. According to property rights theory, the efficiency of land markets can be increased by means of an unambiguous allocation and specification of property rights. External costs might be internalized by private ownership schemes. The original idea stems from the property rights theory emanating from research work carried out by Coase [2], Demsetz [1], Posner [3] and others

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