Insecure Property Research Articles

Land Market Restrictions, Women's Labour Force Participation and Wages in a Rural Economy

AbstractWe analyse the effects of land market restrictions on the rural labour market outcomes for women. The existing literature emphasizes two mechanisms through which land restrictions can affect economic outcomes: collateral value of land, and (in)security of property rights. Our analysis focuses on an alternative mechanism where land restrictions increase costs of migration out of villages. Testable prediction of collateral channel is that wages remain unchanged, but the effects on labour force participation are ambiguous. Insecurity of property rights in land reduces labour force participation, but leaves wages undisturbed. In contrast, if land restrictions work primarily through higher migration costs, labour force participation increases, while wages decline. For identification, we exploit a natural experiment in Sri Lanka where historical malaria played a unique role in land policy. We provide robust evidence of a positive effect of land restrictions on women's labour force participation, but a negative effect on female wages. The empirical results thus contradict a collateral or insecure property rights effect, but supports migration costs as the primary mechanism.

The role of the private sector under insecure property rights

It is well known that the so-called voracity effect can be observed in an economy with a weak property rights system. Voracious behavior is regarded as one of the excess uses of the common assets. In this paper, we seek to examine voracious behavior from a different perspective by introducing a new direction of capital flow: from the private sector to the common sector. A government mandates that all competing interest groups invest their private capital in the common sector to mitigate the effects of excess use of the commons. In this situation, we study how this capital flow affects the voracious behavior of the groups and the growth rate of the economy. The main findings are that, while there is no standard voracity effect, an increase in the contribution of the private sector into the common sector causes more voracious behavior and thus reduces economic growth. This suggests that policies designed to preserve the commons can lead to a harmful effect on the economy.

Engaging African American Landowners in Sustainable Forest Management

The Sustainable Forestry and African American Land Retention Program is a comprehensive effort to address the long-standing problem of underparticipation of African Americans in forest management. We conducted rapid appraisal baseline research for pilot projects in this program in three Southern states using a carefully selected purposive sample to enhance our understanding of minority landownership and forest management. We found that whereas land represents an important family resource across generations, heirs’ property status often results in insecure property ownership, and most families receive little or no economic return from their land. Forest stands tended to be naturally regenerated pine forests that require thinning, burning, or even complete harvest and replanting if owners are to benefit economically from forestry. Forestry can help families retain land and build assets, although most of the African American landowners included in our study noted that their previous engagement with forestry has been limited to opportunistic timber sales. Landowners expressed broad interest in future engagement in forestry activities and managing for wildlife. Our interview with landowners revealed that the community-based pilot projects were building links among landowners and foresters to encourage sustainable forest management and retention of African American family land.

Reallocating wealth? Insecure property rights and agricultural investment in rural China

This paper evaluates the impact of village-level land reallocations in China on household economic outcomes. The primary objective is to analyze the effect of short-term differences in tenure security in the year of a reallocation, employing the past history of land shifts as a source of exogenous variation in current tenure security. The results show that a decrease in the probability of losing the current plot yields an increase in agricultural inputs and production with no change in non-agricultural investments, conditional on household fixed effects that control for any unobserved and time-invariant characteristics of the household. This suggests that even small increases in the security of tenure enjoyed by households could yield benefits in terms of greater agricultural output.

Spoliation vs. ‘The right not to lie’: An economic theory of the 2012 political crisis leading to the referendum to impeach the President of Romania

Abstract In July 2012, Romania witnessed signs hinting at a possible erosion of political freedom. The paper shows that these signs point to a significant shortfall in economic freedom, deeply rooted in insecure property rights and high corruption. Such a shortage accounts for both the absence of the rule of law and many people’s reliance on the government for a job. Voters reliant on redistribution (mainly employees in the public sector, pensioners and welfare recipients) who actually cast their votes have outnumbered the other voters and have come to think of themselves as the owners not only of the redistribution rights set forth by law, but also of the values of those rights. Thus, excessive redistribution lays the groundwork for the “tyranny of the majority” and explains why the mechanisms to correct excesses cannot be used or are used too late, as they seem illegitimate. The paper presents the particularities of voters reliant on redistribution and the mechanism whereby they may come to agree, even if not wholeheartedly, to the reduction in their political freedoms if this means averting a cut in redistribution incomes. The paper concludes that it is only a matter of time before political freedom deteriorates in the absence of higher economic freedom via enhanced property rights, lower corruption and less reliance on redistribution.

Modeling indigenous tribes’ land rights with ISO 19152 LADM: A case from Brazil

The issue of indigenous land rights is a particularly pressing political and socio-economical issue in contemporaneous Brazil. Violent land disputes between non-indigenous land ownership and indigenous people with overlapping claims to land rights is a complex problem. It has been caused by the bureaucratic and slow process of land adjudication that generates insecure property rights leading to the violent land disputes. Another problematic issue on indigenous land is the deforestation process.Motivated by such pressing issues, and using the experience and results obtained in a previous paper on indigenous forest rights in India, where a recent Act of law defined the situation, the initial team of authors has been extended to include Brazilian land administration experts.This paper aims to define the indigenous land rights in Brazil, as described under various laws, in the framework of ISO 19152 Land Administration Domain Model, with an emphasis on the spatial dimensions of the definitions.The existing international convention on indigenous rights, by the International Labour Organisation (ILO) of the United Nations, is referred as a basis for the national legislation enacted in Brazil.This background review of existing international and national legislation framework supported the following step of establishing the legal sources and definitions for a number of core LADM classes, concerning the Parties, Legal & Administrative and Spatial Units packages. The descriptive text is then complemented with UML diagrams. This is a fundamental step in defining an LADM specialized model for the situation of indigenous land rights in Brazil. From this first description, a contextualized Use Case Diagram is displayed (not currently part of the LADM standard).Finally, it is expected that the publication of the situation of indigenous land rights by using the LADM framework, as presented here for Brazil, and previously for India, can contribute to broadened discussions by land administration experts worldwide. This is one of the first initiatives (for Brazil) in the use of a specialized model, and in the future can be expanded in order to achieve the modeling of other types of spatial units and related rights, until a complete, multipurpose, country profile LADM_BR is reached that can underpin an integrated cadastre. It can be equally used to test implementation prototypes, using current or experimental geographic information technologies and spatial databases.

Government Expropriation Increases Economic Growth and Racial Inequality: Evidence from Eminent Domain

Is it justified for states to appropriate private property rights? If so, should governments expropriate or regulate?We test three conventional views: insecure property rights cause underinvestment, moral hazard cause overinvestment, or public use cause economic growth.We embed these mechanisms in a model and measure them using the random assignment of U.S. federal court judges setting geographicallylocal precedent. For a half-century, racial minority Democrats were more likely to strike down government appropriations while Republican former federal prosecutors were more likely to uphold them. We find that pro-government physical takings precedent stimulated subsequent takings, expropriation of larger parcels, highway construction, and growth in construction, transportation, and government sectors as well as agriculture, retail, and financial sectors, overall economic growth, and property values. However, racial minorities were increasingly displaced, unemployed, and living in public housing, and the service sector declined. Pro-government regulatory takings precedent also spurred economic growth and property values, but did not increase displacement or racial inequality.

Understanding socio-economic and policy constraints to dairy development in Ethiopia: A coupled functional-structural innovation systems analysis

This study investigates how the Ethiopian dairy innovation system has functioned to support the development of the Ethiopian dairy sector and what have been the major technical, economic, and institutional constraints in the process. We used a coupled functional–structural analysis of innovation systems to analyse the influence of socio-economic and policy constraints on the development of the Ethiopian dairy sector. Results show that problems with structural elements such as the absence of key actors, limited capacity of existing actors, insecure property rights, cumbersome bureaucratic processes, poor interaction among actors and inadequate infrastructure have all limited dairy innovation. Out of the seven innovation system functions studied, our findings show that entrepreneurship, knowledge diffusion, market development and legitimacy creation have been particularly weak. Our evidence thus suggests that problems with certain structural elements coupled with weaknesses in various innovation system functions have been major hindrances to the uptake of technologies and dairy sector development in Ethiopia. The narrow policy focus on biophysical technology generation and dissemination, without considering the underlying problems related to institutional conditions and socio-economic processes, has also contributed to low technology adoption and limited broader development in the dairy sector. We suggest that combinations of institutional and technological interventions are needed to overcome the various system weaknesses that have hindered dairy sector development in Ethiopia.

Taking Stock of Carbon Rights in REDD+ Candidate Countries: Concept Meets Reality

In the discourses on who should benefit from national REDD+ implementation, rights-based approaches are prominent across various countries. Options on how to create viable property rights arrangements are currently being debated by scholars, policy makers and practitioners alike. Many REDD+ advocates argue that assigning carbon rights represents a solution to insecure individual and community property rights. But carbon rights, i.e., the bundle of legal rights to carbon sequestered in biomass, present their own set of theoretical and practical challenges. We assess the status and approaches chosen in emerging carbon-rights legislations in five REDD+ countries based on a literature review and country expert knowledge: Peru, Brazil, Cameroon, Vietnam and Indonesia. We find that most countries assessed have not yet made final decisions as to the type of benefit sharing mechanisms they intend to implement and that there is a lack of clarity about who owns rights to carbon as a property and who is entitled to receive benefits. However, there is a trend of linking carbon rights to land rights. As such, the technical and also political challenges that land tenure clarification has faced over the past decades will still need to be addressed in the context of carbon rights.

Vote suppression and insecure property rights

While it is commonly understood that land is a political tool, there is surprisingly little empirical research on how insecure property rights affect political outcomes. In this paper, we show how a dominant political party can use insecure property rights to ensure politically compliant voter behavior and how this power is frustrated after the introduction of a land certification program. We test this hypothesis on data covering 10,000 Mexican municipal elections during the country's democratic transition. Exploiting the gradual rollout of a large-scale land certification program, we find that land titles significantly raised the number of votes for the main opposition parties. Importantly, this effect disappears once the dominant party, the Institutional Revolutionary Party (PRI), has already lost at least one election in the municipality. These results provide an additional explanation of the PRI's downfall and, more generally, illuminate the relationship between political power, institutions and resource allocation.

Equity risk premium and insecure property rights

How much of the equity risk premium puzzle can be attributed to the insecure property rights of shareholders? This paper develops a version of the CCAPM with insecure property rights (stochastic taxes). The model implies that the current expected equity premium can be reconciled with a coefficient of relative risk aversion of 3.76, thus resolving a substantial part of the equity premium puzzle.

Capitalizing property rights insecurity in natural resource assets

Property rights are commonly touted as a solution to common pool resource problems. In practice, however, the security of property rights over natural resources varies substantially; this may affect returns to ownership and asset values. We use an analytical model to examine the effects of insecure property rights to natural resources on the market value of assets. We then use a unique dataset of fisheries from three countries to examine empirically how differences in property rights affect market outcomes. We find significant asset market capitalization of insecurity arising from (1) ownership disputes, (2) illegal extraction from resource stocks, and (3) the possibility of government revocation of rights.

In defense of endogenous, spontaneously ordered development: institutional functionalism and Chinese property rights

Neo-liberal observers have frequently raised the red alert over insecure property rights in developing and emerging economies. Development would be at a crossroads: either institutional structure needs changing or it risks a full-fledged collapse. Yet, instead of focusing on the enigma between economic growth versus ‘perverse’ institutions, this contribution posits a functionalist argument that the persistence of institutions points to their credibility. In other words, once institutions persist they fulfill a function for actors. Chinese institutions have been frequently criticized for lack of security, formality and transparency, yet paradoxically, these apparently ‘perverse’, inefficient institutions have sustained since the late 1970s throughout the entire economic boom. Key to understanding this might be the realization that institutional constellation stems from an endogenous, spontaneously ordered development in which the state is merely one of many actors that ultimately shape institutions into a highly complicated and intertwined whole. The argument is substantiated by reviewing the case of China's rural-urban land rights structure with particular reference to its markets, history and rights of ownership and use.

Application of the Anthropogenic Allee Effect Model to Trophy Hunting as a Conservation Tool

Trophy hunting can provide economic incentives to conserve wild species, but it can also involve risk when rare species are hunted. The anthropogenic Allee effect (AAE) is a conceptual model that seeks to explain how rarity may spread the seeds of further endangerment. The AAE model has increasingly been invoked in the context of trophy hunting, increasing concerns that such hunting may undermine rather than enhance conservation efforts. We question the appropriateness of uncritically applying the AAE model to trophy hunting for 4 reasons. First, the AAE assumes an open-access resource, which is a poor characterization of most trophy-hunting programs and obscures the potential for state, communal, or private-property use rights to generate positive incentives for conservation. Second, study results that show the price of hunting increases as the rarity of the animal increases are insufficient to indicate the presence of AAE. Third, AAE ignores the existence of biological and behavioral factors operating in most trophy-hunting contexts that tend to regulate the effect of hunting. We argue that site-specific data, rather than aggregated hunting statistics, are required to demonstrate that patterns of unsustainable exploitation can be well explained by an AAE model. Instead, we suggest that conservation managers seeking to investigate and identify constraints that limit the potential conservation role of trophy hunting, should focus on the critical governance characteristics that shape the potential conservation role of trophy hunting, such as corruption, insecure property rights, and inadequate sharing of benefits with local people.

MANAGING THE CLIMATE RENT: HOW CAN REGULATORS IMPLEMENT INTERTEMPORALLY EFFICIENT MITIGATION POLICIES?

AbstractThis paper provides a formal framework to analyze informational and commitment requirements of several intertemporal price and quantity instruments for mitigating global warming. We ask under what conditions and to what extend the regulator can shift the complex and daunting intertemporal optimization of fossil resource use to markets. Mitigation always generates an intertemporal climate rent which reflects the stock‐dependent damages and emerging scarcities of the atmospheric carbon deposit. In order to calculate and to manage this climate rent appropriately, common policy instruments like Pigouvian taxes or emissions trading presume perfect information about resource demand, extraction costs, reserve sizes, and damages for the entire planning horizon. To reduce these informational requirements we develop an alternative policy approach—a state dependent tax rule—that relies only on current observations of cumulative extraction (or atmospheric carbon concentration). Within a cost–benefit analysis, this instrument is capable to shift the complex intertemporal optimization problem completely to the resource sector when resource owners are homogeneous. Under a cost‐effective carbon budget approach, emissions trading with banking and borrowing can also unburden the regulator from solving the intertemporal social planner optimization problem. Additionally, we discuss which instruments can obtain an optimal allocation even if resource owners employ discount rate mark‐ups (i.e., due to imperfect commitment or insecure property rights). While an emissions trading scheme without banking and borrowing is robust against discount rate mark‐ups, resource taxes have to be modified in order to achieve an optimal allocation.

Large Scale Land Acquisitions in Developing Countries: Property Rights and CSR

The current wave of land acquisitions in developing countries differs from past trends because of the speed and magnitude of FDI flows. The main risk is the insufficient legal protection of land users, especially women. Insecure property rights are also a significant risk factor for investors. Strategic CSR in relation to property rights on land in the context of large acquisition should be a likely outcome, on condition that there is sufficient civil society mobilization. A code developed by international organisations could have the function of “model.”

Property Insecurity and Conflict

Insecure property rights for marginalized groups foster anti-government grievances – motivating dispossessed groups to rebel, and increasing the likelihood of armed conflict and civil war. Cross-country research often treats property rights security in a country as homogeneous, but this standard one-dimensional conception of property rights ignores significant variations in the risk of expropriation faced by different groups within the same country. Using a new indicator that measures the property insecurity of marginalized minority groups, this article demonstrates that the severity of property insecurity for the worst-off groups in a country is positively associated with the likelihood of armed conflict across a range of specifications.

Do Insecure Property Rights Ground Rights of Jurisdiction? Miller on Territorial Justice

A prominent approach in the debate on territorial rights claims that a group may have jurisdictional rights over a particular land if that land has become a repository of value for the group. This justification relies on a premise which has remained largely unsubstantiated, namely that having jurisdictional rights should be our preferred means for ensuring the group’s retaining of the land’s embedded value. This article discusses a recent attempt to fill this gap. David Miller acknowledges that the value could be retained by the group if it has private property rights. However, he argues that because such rights can be changed at will by the holder of jurisdictional rights the group’s retaining of value is unacceptably insecure. I argue that this attempt fails. Miller’s argument is briefly stated so I start with some reconstructive work. Most importantly, I suggest that the argument relies on a descriptive claim about empirical probabilities, namely that the group’s having jurisdictional rights (in international law) provides the largest feasible reduction of insecurity. I then provide some tentative suggestions about expected state behavior which challenge the validity of that descriptive claim; I argue that a reform of international law which confers internationally enforced property rights on the relevant groups—rather than jurisdiction—may provide a similar (or even relatively larger) reduction of insecurity. My tentative conclusion is that Miller’s appeal to insecurity fails to provide the “embedded value” approach (favored by him and others) with the needed bridge from property rights to rights of jurisdiction.

War and natural resource exploitation

We build a theoretical framework that allows for endogenous conflict behaviour (i.e., fighting efforts) and for endogenous natural resource exploitation (i.e., speed, ownership, and investments). While depletion is spread in a balanced Hotelling fashion during peace, the presence of conflict creates incentives for rapacious extraction, as this lowers the stakes of future contest. This voracious extraction depresses total oil revenue, especially if world oil demand is relatively elastic and the government’s weapon advantage is weak. Some of these political distortions can be overcome by bribing rebels or by government investment in weapons. The shadow of conflict can also make less efficient nationalized oil extraction more attractive than private extraction, as insecure property rights create a holdup problem for the private firm and lead to a lower license fee. Furthermore, the government fights less intensely than the rebels under private exploitation, which leads to more government turnover. Without credible commitment to future fighting efforts, private oil depletion is only lucrative if the government’s non-oil office rents are large and weaponry powerful, which guarantees the government a stronger grip on office and makes the holdup problem less severe.

Land, Votes, and Violence: Political Effects of the Insecure Property Rights Over Land in Dagestan

How do insecure property rights over land affect electoral competition and the level of violence? To answer this question, I explore original empirical evidence from Dagestan, Russia’s most turbulent North Caucasian republic. The exploration is based on a statistical analysis of district-level data with special emphasis on chronological validity. Studying the relationship between land titles of the Soviet period and post-Soviet amounts of tenured land, the research demonstrates that the amount of unregistered land in each district has a profound effect on local electoral competition and indices of violence. A higher percentage of untenured land at the district level leads to less electoral competition and more intense violence. Consequently, the study finds that the insecurity of property rights creates an opportunity structure for electoral patronage and violent expression of conflicts and grievances. In theoretical perspective this study sheds light upon a relatively unexplored institutional factor that drives electoral process and violence in predominantly agrarian societies.