HOW IMPORTANT IS CLEAR TITLE TO PROPERTY? Kids, Hernando de Soto’s campaign to make the possibility of clear ownership of property widely available is controversial. This wikipedia article summarizes de Soto’s thesis: “no nation can have a strong market economy without adequate participation in an information framework that records ownership of property… Unreported, unrecorded economic activity results in many small entrepreneurs who lack legal ownership of their property, making it difficult for them to obtain credit, sell the business, or expand.”
This article in Slate by John Gravois from 2005 gives an idea of the criticisms of de Soto. Gravois and other critics of de Soto seem especially troubled by de Soto’s emphasis on individual private property. Gravois says that de Soto has “botched the details, especially by pushing one solution—individual property titles”. However, Gravois recommends for consideration “granting informal neighborhoods groups land rights for some period of time”—a recommendation which seems to me to accept the importance of clear property rights, but to take issue with who should have those rights.
For me, disputes about whether and where to have private or collective property rights are interesting (reminiscent of debates among English historians about enclosure), but whichever way you come out on those issues, a failure to have clear property rights creates harmful and needless barriers to development. Gravois in fact agrees with this, saying: “De Soto is right to point out the importance of legally sorting out who owns what in the Third World.”