Property and Poverty Seminar
This seminar is for those who are interested in property and poverty. Since the time of Bentham, we have understood that the poor, like others, are more likely to invest in property if they own it. Hernando De Soto has famously argued that non-transparent legal systems, and titling systems in particular, pose severe impediments to the participation of the poor in capitalist economies. Without title, the poor are less likely to invest in their properties and are often unable to access credit. De Soto estimates that for the developing world, the total value of real estate held by the poor (but not formally titled) is more than 20 times foreign direct investment and more than 90 times all foreign aid for the last 3 decades. The extent of De Soto’s influence can hardly be overstated. In the policy world, his work has inspired decades of World Bank-funded titling programs across several continents. In the academic world, his work has inspired soul-searching among economists and legal scholars across the methodological spectrum. Some have argued for communal systems of collective land tenure. Others dispute his estimates of property currently owned by the poor, and argue that granting legal title has not improved credit access. Others have argued that titling systems simply replicate current inequalities. Moreover, in societies where women work the land but do not have equal status, their claims are unlikely to be recognized. Others have criticized De Soto’s emphasis on titling arguing that land titling by itself is unlikely to make a significant impact on poverty reduction without parallel reforms such as improving judicial systems, bankruptcy codes, and business regulations. Yet others such as Judge Posner have rightly raised questions as to whether extensive investments in legal systems represent a prudent investment in the conditions of extreme economic scarcity that characterize many developing countries, suggesting that in such circumstances, a more “modest” approach to legal reforms may be more prudent. This seminar will focus on De Soto’s work and the critiques. This course satisfies the upper-level writing seminar requirement.