Mar 1, 2010

Paths to Property: a Review

My recent read was "Paths to Property: Approaches to Institutional Change in International Development" by Karol Boudreaux & Paul Dragos Aligica, an iea publication. As every iea publication, the book is concise, well researched and written. And it is a rewarding read especially to those concerned with the development of property rights in African continent and the overall economic growth of the continent.

About the book (taken from its back cover):

Sub-Saharan Africa has received tens of billions of dollars in foreign aid over the last fifty years yet economic development has remained elusive. In many countries absolute poverty has increased and life expectancy has declined.

Karol Boudreaux and Paul Aligica argue that the results of traditional approaches to development policy have been disappointing. Instead, the focus needs to be on the adoption of sound political and legal institutions. In particular, clearly defined and enforced private property rights are needed to encourage entrepreneurship and economic growth. However, institutional environments in Africa are both complex and challenging, and the creation of secure property rights is far from a straightforward process.

The authors examine several case studies of property rights reform in the developing world and suggest that universal policies applied regardless of local culture and tradition tend to fail. Reforms are more likely to succeed when they evolve gradually and are tailored to local norms and values rather than imposed from above by governments, aid agencies and supranational institutions.
I found the book very useful in understanding the ways property rights can be established, the various approaches, their advantages and their pitfalls. Various case studies provided in the book help the reader to fully grasp the complexities of establishing property rights. The authors have tried to highlight the fact that there is no universally applicable policies regarding the property rights. Neither the fiat/ legislative approach nor the evolutionary approach are flawless. A combination of both approaches is necessary for achieving the results.