The Three Legged Stool: Property and Corruption

In a recent blog post, Yuliya Panfil, the Director of New America’s Future of Property Rights program, raises a crucial question. A quarter of the world’s population lives without property rights, which imposes enormous economic, environmental, and other costs on society. New technology—including the delineation of land parcels using satellite data, land surveying using smartphones, and land governance using blockchain—has made property registration relatively quick and inexpensive. In other words, the problem is a large and important one, and an affordable solution already appears to exist: why is the problem not being solved?

If a system is broken and it is unclear why no one is fixing it, chances are that the people who could fix it are benefiting from it being broken.

If a system is broken and it is unclear why no one is fixing it, chances are that the people who could fix it are benefiting from it being broken. Evidence from informal settlements in Asia, Africa, and Latin America suggests that decision-makers often have political and monetary incentives to keep communities in the very state of property precariousness that the technology could help them fix.

In informal urban settlements in developing democracies, elections are often fought less on the basis of universalistic policies and programs and more around personalized deals in which private or neighborhood-level benefits are promised in exchange for political support. These benefits often take the form of land, either through direct provision or through tacit support for squatting. These deals bind political figures and poor communities in 'patron-client' relationships, in which the poor receive some benefits but also remain vulnerable and dependent, while politicians benefit from their dependency.

These political dynamics have been documented across continents for decades. Take the example of the Old Fadama settlement in Accra, Ghana. First settled ‘illegally’ in the 1980s, the settlement popularly known as ‘Sodom and Gomorrah’ is now home to over 80,000 people who lack secure property rights. Yet, they are not simply neglected by the establishment. Politicians actively court the votes of this community. When mayors have tried to demolish parts of the settlement over the years, national political leaders have called a halt to demolitions, fearing their parties’ electoral popularity would be harmed. Still, no government has attempted to provide legal title to the residents of Old Fadama on site or elsewhere.

The political establishment is even more deeply entrenched in Kibera, the huge informal settlement in Nairobi, Kenya, which houses 250,000 people. Ninety percent of Kibera’s residents are tenants with no formal rights. Who are their landlords? Over half the landowners in Kibera are government officials and politicians, with the remainder presumed to be politically well-connected as well, according to researchers. In this case, these powerful actors aren’t in it just for political support: as informal landlords, they collect millions of dollars in rent. One study estimated that residents of informal settlements in Nairobi paid over US$30 million in rent in 2004 alone.

These vested interests aren’t just an African problem. In her classic study of favelas in Rio de Janeiro, Janice Perlman observed that, “If the squatter settlements were to achieve legal rights to their lands and full urban services and facilities, in many cases the usefulness, power, and importance of these leaders would be severely reduced… In order to survive, they must persuade residents to be content with token change and slow progress, and to trust that local leadership is doing its best to deal with the difficult problems of infrastructure and tenure. This may sound Machiavellian, but it is generally true.” Harvard’s Diane Davis argues that, when government planners have tried to regularize informal settlements in Latin American cities, they have been “kept at bay by the local power brokers whose authority rested in the maintenance of a clear distinction between the formal and informal city.”

In the context of Indian cities, Solomon Benjamin explains that local governments have a political incentive to gradually strengthen the de facto land claims of the squatters who form their political base, but also have an incentive not to provide them with full legal land titles. In neighboring Pakistan, activist Perween Rehman observed that in Karachi, “the government, the political parties, the police, the members of the national assembly, the councilors” were all involved in informal land grabs. Tragically, she paid a high price for her outspokenness.

What does all of this mean for organizations trying to help deliver property rights, particularly to the urban poor in environments like these? In an ideal world, one could first implement sweeping governance reforms, reconfigure the landscape of political incentives, and only then turn one’s attention to property rights. Given the inertia of systems like these and the limited levers of influence anyone has over them, this is probably too ambitious.

What one can do is learn to read specific political contexts, identify the players that matter and try to get them on board by appealing to their agendas (to the extent that this is possible without ethical compromise), and be opportunistic. In certain times and places, the incentives do line up in such a way that there is political backing for land titling. For example, the government of Tanzania has recently announced a policy to provide titles to households in informal settlements, and it already appears to be delivering on this promise.

When governments are unresponsive, grassroots organizations among the urban poor themselves may be able to use the new technology. Under Slum Dwellers International’s ‘Know Your City’ program, community-based organizations have mapped and surveyed several thousand settlements in over two hundred Asian and African cities. These communities view their self-generated data as a tool to organize and bolster their property claims, and they would benefit from inexpensive new technology.

Returning then to the original question: why is the large and important problem of property rights not being fixed when feasible solutions already appear to exist? The examples above suggest that technical constraints, the ones that have now been largely overcome, were only part of the problem, and the rest of the problem is local and political.