Saturday, February 2, 2013

What would de Soto say?

Thanks to Steve and the rest of the PropertyProf Blog team for having me as a guest on the blog this month.  I'll be blogging largely about comparative property law issues I'm working on, as well as other events involving property that strike my fancy over the month, and that I think might strike yours.

I conduct most of my fieldwork in Colombia, which is in the early stages of carrying out a nationwide land restitution program as part of its efforts to transition to peace from its decades-long, ongoing civil war.  The program seeks to restore possession of land expropriated or abandoned in the conflict to displaced people who lived on it, as well as grant formal title to the land, whether or not it was formally titled prior to its expropriation.  The scale of this program is massive.  Nearly 30 million acres are subject to restitution, an estimated 3.9-5.2 million people are internally displaced (more than any other country in the world), and thousands of claims have been filed within the first year of the program's existence.  (See this New York Times article about the program and a recently decided restitution case.)

For many observers, this restitution program might look like a classic Hernando de Soto move, straight out of The Mystery of Capital handbook.  And to a certain extent, it is.  The program is structured to restore prior possession and grant private title to land to people displaced as a result of the conflict.  (For an excellent discussion of competing points of view regarding the extent to which the program should have a more redistributive bent, see this piece by Rodrigo Uprimny and Camilo S├ínchez.)  Access and stable title to land will then theoretically improve the well-being of Colombia's displaced, who mostly suffer from deep poverty.  It sounds like de Soto.

But is it?  While this program and de Soto's approach might share ends - economic development of a certain sort - do they share means?  His theory is often boiled down to the following idea: that the granting of private title to informally held assets will allow poor people to bring those assets into the capitalist economy, leading to economic development.  (There are of course also excellent, more nuanced approaches to de Soto, such as this volume edited by D. Benjamin Barros.)  What is excised from this general approach to de Soto, however, is how exactly he thinks countries ought to accomplish this, a subject to which he devoted years of research and a significant portion of his scholarship. 

De Soto's prescription for how to get there involves not a flat granting of private title to informally held assets, but rather the incorporation of what he calls "extralegal" local practices regarding property into the formal property system, such that the formal legal system reflects the way people "actually arrange their lives" (The Mystery of Capital p. 108).  The conclusion he draws from his years of research with a battery of research assistants on local customs and practices of property in places like Peru, Egypt, the Philippines, and Haiti (it turns out de Soto is something of an anthropologist) is that the vast majority of people regulate property through normative practices - he calls these their "social contract" - that are outside formal law.  His prescription for this involves "a threefold task: We must find the real social contracts on property, integrate them into the official law, and craft a political strategy that makes reform possible" (The Mystery of Capital p. 151). 

The restitution program in Colombia employs a bureaucracy full of lawyers who spend hours with displaced claimants investigating the who, what, where, and when of their displacement, including the informal arrangements related to their prior possession of particular parcels.  For those claimants who are found to be victims of displacement as a result of the conflict, the program then aspires to convert this prior informal possession into formal title through a judicial restitution process.  The problem, however, is that Colombia has been and continues to be in the middle of a conflict that has long had at its base contestation over land and territorial control.  This means that nearly every restitution case is shot through with competing claims, few of which are easily resolved by simply granting formal title to one prior informal possessor who was displaced.

Here is one brief but iconic example.  In the 1960s and 1970s, a wealthy family owned a large estate in a fertile part of Colombia's banana-growing region.  Lacking access to land, a group of peasants, with the help of armed guerrillas, appropriated a section of this property in the 1980s.  They used this land for subsistence farming, though the wealthy family still held formal title until the late 1990s, when the state extinguished title due to the time that had ensued since their last occupancy of the property.  The peasants continued to farm on the land, some of them transferring parcels informally to other farmers.  In the meantime, members of the wealthy family were swiftly rising in the ranks of growing paramilitary organizations in the region.  In the early 2000s, they returned to the property as powerful paramilitary leaders, armed, to reclaim and demand payment for the lands.  The majority of the peasants fled to other areas.  Some of these peasants have since presented restitution claims.  The wealthy landowner-paramilitaries have also made public statements regarding their own status as victims of expropriation.

What would de Soto say about a case like this?  Should the bureaucracy endeavor to find the "social contracts" that were formed over time and integrate them into formal law?  What kind of order would this produce?  And how would even the most conscientious reformer craft it?  These are not trivial questions, as the stability of the outcome of these cases depends in large part upon the extent to which the results are accepted by the communities they affect - a precept which is at the heart of de Soto's method for reform.  There are of course in the case above some characteristics of the less ambiguous "extralegal," informal practices of property that de Soto describes - such as informal transfers between farmers - but there is also layer upon layer of transfers by force, formal extinguishing of title, and ambiguous victimhood.  I would argue that these are indeed aspects of a normative structure, and not mere "lawlessness," but that integrating them into the formal legal system would not necessarily create a stable outcome.

I think the fact is that de Soto doesn't actually have much to say about a case like this.  And that has less to do with the uniqueness of the case - its complexity and general characteristics are anything but unique in Colombia, and I would venture to say are also common in other conflict situations - than it has to do with de Soto.  Despite his years of fieldwork on local practices and his own experience crafting legal reforms in conflict zones (most notably in his home country of Peru during its struggle with the Shining Path), the means that de Soto describes to reach the end of economic development at times simply don't speak to the complexities of those places, and those practices.  Carol Rose notes that this is a relative silence to the very real problem of contestation over scarce resources.  It is also a relative silence to complexities like competing claims and expropriated-turned-expropriator that are the everyday realities of life in Colombia after decades of violence.  And even to those that emerge, though thankfully with fewer guns, in the ongoing dispute between my father and his neighbor over the use of a five foot strip of land which joins their back yards.  Simply put, it is a silence to the complexities of conflict.

I don't think that it simply all boils down to "it's complicated."  This would be an abdication of the very real need to at least attempt to forge stable solutions to conflicts like Colombia's.  But these solutions need to be in recognition of, rather than in spite of, the competing claims and ethically ambiguous figures that populate conflicts, in addition to the less ambiguous informal practices of property that de Soto describes.  It's too early yet to tell how this will play out in Colombia's restitution process; while many cases have been filed, only a handful have been heard and determined by restitution judges.  But it's not too early to say that while de Soto's theory might provide a model in broad strokes for something like Colombia's restitution program, implementing the means he prescribes would be unlikely to produce the ends that de Soto and the Colombian government might share. 

Meghan Morris

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Comparative law is not my beat, but Meghan's interesting blog reminded me of Mary Dudziak's articles about Thurgood Marshall's work with Kenya. One of the big sticking points at Kenya's independence were the rights of British-descended landowners, and Marshall's gentle insistence on just compensation even for those who were regarded as usurpers was regarded as a success.

Posted by: Bill Fischel | Feb 4, 2013 10:14:16 AM

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