Property Law for Development Policy and Institutional Theory: Problems of Structure, Choice, and Change

Abstract

This paper brings the institutional and ontological assumptions of development-by-incorporation theorists such Hernando De Soto into dialogue with modern property scholarship. The central argument of the incorporationists is that state-based legal systems should simply recognize and incorporate the informal property rights of urban squatters and rural villagers, thereby creating the necessary institutional conditions for successful economic development in those communities. While not directly addressing the consequentialist side of the argument, this paper argues that our knowledge of modern property systems poses several significant challenges to this prescription. The most significant of these are that modern property systems have often resisted incorporating informal property rights, and indeed often suppressed them, that they typically involve a great deal more indeterminacy than institutional theorists assume, that the very boundaries of modern property systems seem to be shifting beyond the nation state system, that incorporation decisions will necessarily involve significant normative choices, and that some traditional systems may simply be inconsistent with the institutional ontology of modern economic institutions.