Tuesday, August 25, 2009

Individual Property Rights as Panaceas

In the editorial of Science (14 August) Akin Mabogunje, chairman of the Foundation for Development and Environmental Initiatives, proudly discussed the progress made in land reform in Africa, Nigeria in particular. Using "the best available science and technologies not only from the natural sciences and engineering, but also from the social sciences", communal land is not split up in individual properties to "bring them into the mainstream of the growing market economy".
This sounds wonderful if if such land reform would help the people. But individual property rights to land are no garantee for economic advancement as implicated. In fact land reform is creating many problems since these institutional arrangements do not fit with the temperal and spatial use of the land. Traditionally people could adapt to spatial variability in rainfall by moving their livestock to other areas. This might be challenging if land is privately owned. Actually, in Kenia there has been such a landreform in the past and now they are trying to include the informal practices back into the laws (what about people who use the land to pass with the livestock from point A to point B). Other problems are caused by the allocation of land rights, where surprisingly those who allocated the land receive more land rights.
In a time where we expect dramatic changes in ecosystems because of climate change, we need to develop institutional arrangements that fit with the social and ecological dynamics. 3 weeks before this editorial Elinor Ostrom presented in the same journal an updated version of her framework to study the complexity of social-ecological systems. If only practitioners really would pay attention to the best available science, we may avoid tragedies waiting to happen by applying simplistic ideas on governance as blue prints.

Wednesday, August 5, 2009

Paul Romer sheds light on rules and development

In a great talk, economist Paul Romer proposes an interesting idea to create places of innovation and development. By the creation of charter cities, who have specifically defined rules and goals, new cities can be created where motivated people can move to that like to work and live in those cities. The idea is inspired by the rapid economic development in China where special districts were created that acted as catelyzers for growth. From experimental work we know that higher levels of cooperation can be derived if people can self select into groups, especially if groups differ in their rules. For example, public good experiments where participants could chose between a group with costly punishment and a group without costly punishment, led to an increasing number of participants chosing the group with the costly punishment option, although it was not used that frequently (G├╝rek et al. 2006. Science 312: 60–61). An open question remains whether we are able to create successfully such charter cities. Was the success in China based on their cultural background and the centrally led nation? Will copying the idea of charter cities to other regions in the world be great opportunities for corruption of a few elite? It is an interesting idea worth to explore more.