Land reform in developing countries and the poor: An emphasis on Ghana

Social Land Airport 1 An image of a vast land

Tue, 12 Jan 2021 Source: Kordson Kwasi Ayrakwa

This piece reviews major literature on the importance of land and land reform processes in the developing world with more emphasis on the situation in Ghana. This literature review also examines the impact of neoliberal policies on the property rights approach and the traditional land tenure system in Ghana.

Land is one of the most ingredients for development (African Development Bank 2020). Kuntu-Mensah (1997) argues that it is a very important economic asset that carries serious religious and political connotations. According to Deininger ( 2003:20), " researchers and development practitioners have long recognized that providing poor people with access to land and improving their ability to make effective use of the land they occupy is central to reducing poverty and empowering the poor and their communities ".

De Soto (2000) and in line with other researchers claim that titles to land provide a number of advantages. First land titles may give certainty and proof of land ownership. Second, they make land transactions easier, safer, cheaper and prevent fraud in the purchase of landed properties and mortgages (Lipton 2009).

Third, land titles have been said to help in creating mechanisms for capacity building among local land managers with the potential of increasing the opportunity for women to participate in land markets ( Adenew 2006, Alhassan 2006). Fourth, land titles may enhance systematic demarcation of common lands to avoid encroachment by individuals and help in resolving conflicts through the provision of accurate maps and boundary markets (Platteau 1996). Fifth, land titling can enhance the confidence level of the poor to defend their rights in land (African Development Bank 2020, Amanor 2006). Sixth, the evolution of property rights in land and their effects on Investment are central in the political economy of development (Besley 1995 ).

In "Rethinking Land Reform in Africa: New Ideas, Opportunities and Challenges", the African Development Bank (2020) and Lipton

(2009), MacGee (2006) all argue that there are still other several reasons for titling land. For example, they point out that, within a country, there is a significant premium for land with clearly defined title, relative to a land without a title. Deinnger (2003) stresses that studies in several countries have found that, the premium for titled land ranges from 15 to 18 percent compared to lands without titles. This provides direct evidence that titles provide significant economic benefit to landowners. Feder and Nishio (1999) further indicate that increased land security emanating from land titling and land transferability promotes productivity and high levels of investment. While Basu (1996) argues that, one of the benefits of transferable land titles is that, they create better access to credit and reduces the difficulties in securing income.

The ability to use real estate as collateral can allow households to access both larger loans and enjoy favourable terms of credit, which in turn can facilitate increased investment by farmers. However, increased access to credit depends upon the existence of a well-functioning credit market which facilitates access to information and allows for easy use of landed properties to foreclose loans in the event of a default (Barnes 1996, Barro 1999).

The African Development Bank (2020) report says recent trends in land reform processes in the developing world, Africa and including Ghana can only be clearly understood by examining the influence of neoliberal policies on the property rights approach and its effects on the poor.

The beginning of Ghana's and Thailand's Land Titling Programs coincided with a major shift in the interest of development policies of the International Monetary Fund (IMF) and the World Bank.

During the 1980s, the IMF/World Bank's structural adjustments programs and stabilization policies linked economic growth to the privatization and individualization of land rights within the broad pro-market tenets of neoliberalism.

This shift was also reflected in the World Bank's 1993 housing policy paper "Housing Enabling Markets to Work "; which was heavily influenced by Hernando de Soto's work on urban and informal settlements in Peru. De Soto pointed out that, little attention had been given to the question of urban land tenure and its great importance to development. However, by the early 1990s, de Soto's ideas were making a major impact on urban housing literature"(Payne 2002:6 ). In these circumstances, the influence of the property rights approach on both donors and developing countries thinking on land policy and administration had become hegemonic. The assumptions and policies of Western legal views on property and land had a stronghold in many developing countries, even though, they did not fully explain the tenets of the traditional land tenure system in the developing world nor did they offer adequate measures to promote enduring policies that could facilitate poverty reduction ( African Development Bank 2020).

Further, the African Development Bank (2020) stresses that the assumption that, only individual ownership rights could promote tenure security may not be entirely correct. This is because, group ownership can also generate tenure security, depending on the makeup and management rules of the group ( Bromley and Cernea 1989; Platteau 1998; Daley 2004: 36- 40).

In addition, where there are multiple rights to a piece of land, the tenure security conferred on one person by formal individual ownership creates corresponding insecurity and loss of rights for others. Multiple rights to land do not prevent tenure certainty on the part of the owner(s) and on all land users insofar as they all understand the duration and the extent of their rights (Lund 2000: 15-18). For example, individual owners of farms may allow post-harvest stubbles on their land to be used by neighbours for grazing their livestock for a fixed time-period each year. Rights, to access water on an individual's land may also be shared with other people. Such concessions do not amount to a loss of certainty of tenure. Meanwhile, individual land ownership can generate uncertainty if a title deed is neither enforceable nor recognized locally by society.

For land to be a legitimate property, it needs to be socially recognized by others ( Bromley and Cerna 1989; Platteau 1996: 46).

In spite of the fact, land reform and tilting processes have been embraced by many policymakers or analysts on the basis of their presumed importance to socioeconomic development, some challenges to the property rights approach have emerged (Lipton 2009, African Development Bank 2030). A critical examination of the evidence on the effects of land policies on the poor shows that Thailand's Land Registration and Titling (LRT) program was only partially successful. There were also concerns that, within Thai civil society, LRT had negative effects on land rights of such marginal groups as forest dwellers. Further, mass registration and titling led to widespread land sales and landlessness of former small landowners in Thailand (Williams 2003:6-7).

The experiences of individualized land registration and titling programs in Sub Saharan Africa show that LRT was not very successful in creating the platform for industralization and economic development which might stimulate growth in various sectors of the economy - enabling older people to gain employment which in the long run might lead to a reduction in poverty. But it is interesting to note that, in some cases, land titling processes have led to greater inequality and loss of access to land by poor people ( African Development Bank 2020).

Some critics argue that the failure of LRT programs to deliver on agricultural development and improve tenure security is one of the reasons for which agriculture productivity and output in poor countries like Thailand has been low ( e.g. Atwood 1990; Barrows and Roth 1990, Roth 1993).

Other scholars use Kenya's LRT program as an example. They indicate that LRT is associated with the high cost of registration, numerous land disputes and ligation, increased land sales, landlessness and high levels of inequality. Also, Land Registration and Titling has had a negative effect on women's land rights across several countries on the African continent (e.g. Okoth-Ogendo 1976; Haugerud 1983, 1989; Davison 1987; Bruce 1988; Shipton 1988; Mackenzie 1990; Yngstrom 2002; and Platteau 1996, Lipton 2009, African Development 2020).

There are concerns that general processes of land commoditization are increasingly leading to land reconcentration and rising Inequality across Ghana and other countries in Sub Saharan Africa, (e.g. Bruce 1988; Peters 2004). This phenomenon has also prompted land accumulation by small number of national and local elites across Africa and Asia (Von Benda-Beckman 2003: 189).

Also, there is evidence that land titling may not improve credit market access for very small landholders ( Deninger and Binswanger 1999, African Development Bank 2020).

Carter and Olinto (2003) undertook a study of Paraguayan farmers and concluded that, while land titling had an impact on the overall wellbeing of farmers, farmers with small plots of land ( less than 20 hectares) did not gain increased access to credit. As a result, land titles may not necessarily improve access to credit markets for the least wealthy households with small farm sizes.

Lipton (2009), Mbaku (2000) and Deinnger (2003) point out that, using borrowing to smooth income fluctuations may have implications for wealth distribution. In particular, the potential for distress sales in response to adverse income shocks may lead to distortions in wealth distribution as many landowners offer their lands for sale. Too much supply of land in markets may cause prices to be below their normal prices. A similar situation occurred in some areas in Bangladesh, where land sales appear to be frequently motivated by a need to purchase necessities and the Gini cost-efficient of land ownership had led to high levels of inequality in land distribution since the 1960s ( MacGee 2006, Dagum 1997 and Rockson 2007).

Although, it is thought that, a well-functioning land titling system contributes to higher levels of GDP, the impact of land titling on wealth distribution is unclear. The following examples illustrate the point. (1) Measured wealth inequity may be less in countries where all real estate has clear titles than in countries where only some lands have titles (Binks and Ennew 1995). (2) Jayne et al (2002) indicate that, while some households can take advantage of the increased scope of efficient production associated with a better property rights system, others might not be able to do so. To buttress this point, Deere and Doss (2006) indicate that, if the poorest households remain unable to access credit markets, then clearly, land titles may accentuate wealth inequality as middle and upper-income households use better credit access to increase their income and wealth. But if the poorest can easily access credit due to trust and communal spirit then land titles may not play such a crucial role in wealth creation and distribution ( e.g. Grameen Bank in Bangladesh). (3) These various reasons suggest that the overall impact of land titling systems on wealth creation and poverty reduction may be ambiguous ( MacGee 2006 ).

In spite of these disadvantages of LTR, traditional land tenure systems on their own have also not provided adequate land allocation systems for the poor. Thus, some scholars argue that the role of the state is to provide a platform for protecting people's rights in land by combining the merits of the Western legal systems and customary land laws and institutions in the most efficient way that benefits the poor (African Development Bank 2020).

This is crucial to create the preconditions for economic growth and provide the opportunity for individual ownership rights to be fully integrated into land transactions in many traditional societies in Africa (African Development Bank 2020).

But it is important to mention that, institutions of private property rules in land ownership has led to greater inequality and the loss of access to land by poor people. This has further led to the rise of urban landless proletariat in many parts of the developing world.

Academic discourse on land tenure in Ghana has focused on the two main approaches. The first approach suggests that Ghana's land tenure system is historic and rooted in concepts of Indigenous culture and institutions, spirituality and communal/social solidarity (Busia, 1951). The second approach sees customary land tenure as very dynamic and evolving. As population density increases and land becomes scarce, new tenure systems are needed to secure people's rights to land. This tends to foster a move away from community rights to land, toward lineage rights, and then to household and individual land rights. The widespread use of Western property law on land and property systems on the continent has particularly provided impetus for a change of the original communal land tenure systems and institutions.

However, Blocher ( 2006), Coase (1992), and North (1995) argue that the inability of neoclassical economic analysis to integrate traditional customary law and its institutions into land issues and property rights systems in developing countries may account for the poor performance of land reform programs in developing countries and the neglect of pro-poor approaches. Ollennu (1985) stresses that Ghanaian customary law holds the notion that, all lands have an owner. Typically, land has multiple owners in Ghana with the chief holding the highest title and numerous others having lesser rights of possession, use or transfer. According to Ollenu (1985), this embedding of the individual's land rights within certain groups or secondary rights is perhaps the major difference between customary and Western property law.

In principle, customary law and its institutions are subordinate to statutory law when they overlap, but in practice customary law often ignores or surpasses statutory law, making it difficult to sometimes define clear boundaries between the two.

Moreover, the sources of customary law and its institutions are varied as the regions, tribes and communities in Ghana. Amanor (2003), argues that, in spite of these short comings one can still claim the advantages and legitimacy of customary laws and institutions as they represent the values and norms of land management in the Ghanaian society.

The growing debate over the limitations and drawbacks of Western-style land title and ownership practices, which do not necessarily protect acess to land in the developing world, have called for a new approach known as the pro-poor approach.

The key assumptions of pro- poor approach are that, (1) there is a continuum of vulnerability, poverty and wealth along which different people move at different points in time and life-cycle (Loughead et al 2000, Brocklesby 2004, Holbey 2005) and (2) that local social and political relations are important in access to land and that those relations are influenced by people's capabilities for social action as related to their position on the vulnerability/poverty/continuum ( Daley and Hobley 2005, and Peters 2004). Thus, the essence of the approach is that, there are different levels of poverty and hence, government policy on land and titling should be aware of these differences, so that the " very poor " in society are not marginalized but can have the capacity to pursue land claims, and gain access to and make effective use of land.

Columnist: Kordson Kwasi Ayrakwa