Some economists argue that ensuring people have titles to their land can ensure a feeling of security and boost production. … The greatest proponent of the argument is Hernando de Soto, a development economist who has managed to win praise from the likes of Bill Clinton and the libertarian Cato Institute.
There is plenty of evidence that land rights are connected to productivity, but new research out of Madagascar shows that it is not always the case.
Duke University researcher Marc F. Bellemare tested whether the land rights component of a $100 million Millennium Challenge Corporation (MCC) compact with the government of Madagascar. He found that the provision of formal land rights, meaning land titles, had not measurable impact on productivity when comparing farmers that did and did not benefit from the MCC compact.
Holding a land title is not sufficient if structures are not in place to enforce land ownership and dole it out.
From a very nice article by Tom Murphy on Humanosphere, which discusses the policy implications of my forthcoming Land Economics article on land rights in Madagascar.
Spoken Like a True Development Economist
That’s computer scientist Jaron Lanier, who coined the term “virtual reality,” explaining his view that the Internet has destroyed the middle class, in an article on Slate.
Though I’m not sure that the argument that “great stagnation” arguments of the type made by Lanier, which posit that technological change brings increased unemployment, hold much water (thousands of years of technological change seem to indicate otherwise), Lanier’s comment about informal economies is spot on.
Development economists and law-and-economics scholars know the serious inefficiencies that go hand-in-hand with informal economies all too well. Here is one of my favorite articles on those so-called flea-market economies, by Fafchamps and Minten. Here is a whole book by Marcel Fafchamps about the difficulties posed by trying to conduct business in an environment characterized by informality.