Tuesday, July 29, 2014

(NEWZIMBABWE) Cross’ artful preoccupation with property rights evasive and elitist

25/01/2014 00:00:00
by Bernard Bwoni

EVERYONE has an opinion on property rights hence why there is no universal definition of the term. The definition can and has been evolving over time, thus considering different perspectives, the historical context and background underpinning the Zimbabwe land and property rights issue is necessary.

Property rights are not absolute but just a function of what society is willing to acknowledge, defend and enforce. They may need to be adjusted at some point because they do not evolve optimally on their own. There is not enough empirical evidence in Zimbabwe of how the complex property rights package influences economic behaviour and as such Eddie Cross’ fixation with property rights is not only unreflective but also insincere.

The development economist Daniel W. Bromley in his book, Environment and Economy: Property Rights and Public Policy argued that “property rights do not necessarily imply full ownership and the sole authority to use and dispose of a resource”. To be secure, property rights should be of a sufficient duration to allow one to reap the benefits of the investment and should be backed by an effective, socially sanctioned enforcement institution. Surely a ninety-nine year lease should be “a sufficient duration” for one to benefit from their investment? Most of the former commercial farmers whose farms were redistributed had been there for no more than ninety-nine years and just look at how they had benefited from the land.

The relationship between the rights of the individual and the rights of the community has been constantly changing and without doubt will continue to evolve. We live in a complex and dynamic world where conventional wisdom can be overturned for the good of the majority and it is important to acknowledge that changes in theoretical views on property rights do take place. During the unrestrained land grab by the colonial settlers the rights of the individual settlers took precedence over the collective rights of the indigenous community and in the new Constitution the Zimbabwe government addressed those inequalities created by these historical interactions.

Much of the early property rights literature was quite optimistic about the evolution of property rights towards economic efficiency. The available literature indicate that property rights form the cornerstone of every Western country’s economic modernisation and Hernando De Soto even calls the system of legal property rights the ‘’hidden architecture of modern economies’’ and “if a developing country is willing to succeed economically, property rights which have to be well-defined must be enforced”. De Soto of course did not factor in China which “recognises the right to private property but only as a right bestowed by the state and not as a natural right’’. And, by the way China, is by far the fastest growing economy in the world and is poised to edge the USA as the biggest economy in the world by 2016 or so.

Property rights are theoretical constructs in economics and the discourse needs to reflect that especially on a uniquely multiplex case like Zimbabwe. Property rights are formed and enforced by political entities and they reflect the historical context, the conflicting economic interests and the bargaining strength of those affected. They are the social institutions that define or delimit the range of privileges granted to individuals of specific scarce resources. In the modern economic literature the argument is that it makes sense to have secure property rights as it makes it easy to access finance and credit from financial institutions and promote sustainable development.

Some contemporary development economists have gone as far as stating that sustainable development will only come from stable property rights and that markets are less efficient when property rights do not exist. From a theoretical economic point of view that is true however complexities in different situations need to be acknowledged. That is the only argument that Cross and other proponents are advancing without taking into consideration the historical context. There is an element of imperialism or should I say elitism that has pervaded much of the discourse of property rights in Zimbabwe. I have looked into available literature on property rights on Zimbabwe and there is absolutely nothing and the question is how do you make recommendations without empirical evidence from realities on the ground?

Cross and others have argued that separation of provisions on property rights from rights over agricultural land is fatal as the section in the new Constitution on agricultural lands restricts thus running against natural justice. Part 2, Section 4.29 and Chapter 6 of the Constitution points out that access to agricultural land is seen as a “fundamental right” and that “every citizen of Zimbabwe has a right to acquire, hold, occupy, use, transfer, hypothecate, lease or dispose of agricultural land regardless of his or her race or colour’’. The new Constitution also notes that following the colonial occupation and the triumphant liberation war “the people of Zimbabwe must be enabled to re-assert their rights and regain ownership of their land”. If you read the above clauses then the issue of secure property rights should not be at the centre stage as Cross and others would want us to believe surely.

The land reform in Zimbabwe is irreversible, and that is fact. Property rights with regards to agricultural land fall within the limits set by the State to avoid abuse and the government has set up the Land Commission to address issues of abuse through a transparent land audit which is still pending, and this is all within the bounds of international law. Clause 4.28 of the new Constitution addresses the overall issue of property rights fairly and again in line with international law. The rights are extended to all people and the rights to compensation are recognised. However the issue of property of agricultural land needed to be and was addressed in line with the need to “redress the unjust and unfair pattern of land ownership that was brought about by colonialism”. Conventional economic wisdom tells you that economic progression is based on strong foundation of secure property ownership, but what it does not do is take into account complex interactions on the ground.

Clause 16.4 of the Constitution seeks to protect the continuing rights of persons currently occupying or using agricultural land under a lease or other agreement with government and Clause 16.5 states that the State must take appropriate measures ‘’to give security of tenure to every person lawfully owning or occupying agricultural land”. The Constitution states that not all agricultural land will not be State land and under Clause 16.6 “owners and occupiers will be allowed under the provisions and limits of the law to ‘transfer, hypothecate, lease or dispose of his or her right in agricultural land”. Cross deliberately and superficially addresses the issue of property from a self-serving standpoint without acknowledging the fact that the property rights issue in itself is insufficient in explaining why capitalism has succeeded in the West but failed dismally in other parts of the world. If he can present empirical evidence in Zimbabwe as opposed to mere conjecture then we have somewhere to start from.

Cross’ preoccupation with the issue of secure property rights is intriguing and from the persistency you would think that on its own is the panacea to all our current economic difficulties. The issue of property rights surely cannot be absolute without taking into consideration the realities on the ground. The choices of today are constrained by the decisions and actions of yesterday and, yes, history does matter. The shifting relationships of property and property rights in the Zimbabwean context are contentious and polarising and it is important to adopt a historical outlook to it to garner a better understanding. The discourse around the issue of property rights needs not be unreflective, elusive and self-serving.

Bernard Bwoni can be contacted on bernardbwn@aol.com/ bernardbwoni.blogspot.com

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