Publication: Yale Human Rights and Development Law Journal
Publication Date: 01-JAN-06
Delivery: Immediate Online Access
Author: Blocher, Joseph
Article Excerpt
This Note addresses the intersection of customary and statutory land law in the land tenure policy of Ghana. It argues that improving the current land tenure policy demands integration of customary land law and customary authorities into the statutory system. After describing why and how customary property practices are central to the economic viability of any property system, the Note gives a brief overview of Ghana's customary and statutory land law. The Note concludes with specific policy suggestions about how Ghana could better draw on the strength of its customary land sector.
INTRODUCTION
Land makes up nearly three quarters of the wealth of developing countries, (1) and development leaders, (2) businesspeople, (3) and academics (4) have long argued that well-crafted property rights are necessary to unlock the value of that land and encourage economic development. Though some celebrate the notion that property rights are constantly evolving towards efficiency, (5) scholars are increasingly recognizing that the emergence of efficient, enforceable property rights is not inevitable, especially in the developing world. (6)
Recent high-profile work on property rights has sparked renewed popular interest in legal solutions to land-based development issues, (7) but unfortunately that interest has often been "directed at the viability in emerging market societies of these ideas, relationships, and institutions as transplanted from Western industrial democracies, not at unearthing their roots and nurturing those roots within the local communities." (8) Across Africa, for example, attempts to craft property rights have largely been state-driven, top-down programs which attempt to replace customary forms of land ownership with Western-style property practices such as formal land title registration. (9) Programs attempting to implement these reforms have largely failed. The present wave of land tenure reform in Africa is uniquely placed to learn from these mistakes and craft a new and more development-friendly approach to land tenure policy. (10)
This Note argues that rather than attempting to undermine norms about property, successful land tenure reform must use those norms as the basis for an integrated property system that combines custom and statute. Building from theory and using Ghana as a case study, the Note seeks to address why and how customary land practices must be incorporated into formal land law in order for land tenure reforms to promote efficient and equitable economic growth. In doing so, it attempts to build a bridge between the theoretical underpinnings of property reform, exemplified by the New Institutional Economics approach described in Part I, and the practical issues of land administration in developing countries.
Reconciliation of customary and statutory property law in Africa has never been more important, nor more difficult, than it is now. Countries across Africa are currently struggling to create rational, efficient land policies that merge modern statutory law with the traditional customary law that governs many people's day-to-day lives. (11) The costs of failure, of the divergence between formality and reality, can be alarming. The government bulldozers that destroyed thousands of homes and businesses throughout Zimbabwe in the summer of 2005 as part of President Robert Mugabe's Operation Drive Out Trash gave a particularly vivid representation of this battle. (12) Those homes, like the shanties, kiosks and unofficial markets that make up a large share of Africa's "informal" economy, existed outside of Zimbabwe's formal law. This made them, in Mugabe's vision, "trash." Although some scholars have begun to address the issue of how property rights transition from customary or Marxist systems into private capitalist systems, (13) few have taken on the difficult and relatively unglamorous task of proposing feasible, country-specific solutions for how custom and informal rights can be integrated with statute into a nationwide economy. At best, failure to turn theory into practice deprives the informal sector and hence the economy of growth opportunities. At worst, it leads to destructive conflicts like Operation Drive Out Trash.
Ghana is not as extreme an example as Zimbabwe. But, like most sub-Saharan African nations, it depends on land as the basis of its economy while simultaneously struggling to solve land-related problems and reconcile a legal system that is divided between custom and statute. (14) Land is Ghana's single most valuable asset and the foundation of the national resource base. (15) Agriculture accounts for more than sixty percent of the country's jobs. (16) Despite its economic importance, however, the land sector in Ghana is plagued with a number of major problems. (17) The National Land Policy (NLP) of Ghana, published in June 1999 after years of broad consultation, provides a good overview of the nature and scope of the obstacles to land sector development, including indeterminate boundaries, weak land administration, and inadequate land tenure security. (18) These problems, and the importance of land itself, are representative of problems across the countryside.
Land sector problems are particularly acute in urban and peri-urban areas, where the growing population has increased social and economic demand for land. (19) Rather than being able to profit from rising land values, some Ghanaians have found their livelihoods sold out from under them by unscrupulous chiefs or government administrators. Lacking the power to claim just compensation, many Ghanaians are doomed to landlessness. (20) In peri-urban Kumasi, not only are instances of "rough sleeping" (on verandahs, kiosks, or pavements) increasingly common--one in six men and women do so--but overcrowding is also on the rise, with some villages averaging six to twelve people per room. (21) The housing crunch has also led to occasional hostility between displaced landowners and the chiefs and developers they perceive to be benefiting from their calamity. (22) Recent studies report that customary ownership rights in rural areas, too, are becoming less secure as commercial transactions and development increase. (23) The homelessness, poverty, and violence springing from these property failures demonstrate that land tenure security is a problem not just of economic development, but of human rights.
Government interventions meant to address these problems have sometimes worsened them. (24) Well-intentioned but ill-considered land reforms can exacerbate the division between custom and statutory law, leaving vulnerable groups such as women with less protection than they had under customary systems. (25) The government's acquisition of vast tracts of land in high-pressure urban areas only compounds the problem, especially when that land is cleared and then left unused. Shanties and kiosks begin reappearing almost overnight, stubbornly asserting customary claims in the face of government bulldozers.
Moreover, competition for land rights has led to a rash of land disputes, (26) draining time and resources away from land development. The wave of land-related litigation has completely overwhelmed the government bodies responsible for dealing with property disputes. Formal land courts are themselves hampered by poor case management, corruption, staff shortages, and antiquated procedures such as recording of evidence by the judge in long hand. (27) Customary courts, which are still popular and powerful, offer a potential alternative to the state courts, but they lack state power to compel attendance or enforce decisions. (28)
This Note argues that many of these problems can be solved by better integrating customary law and customary authorities into the statutory system. Part I introduces the theoretical analysis, using New Institutional Economics as a framework to argue that the economic success of a property system is dependent on the degree to which it integrates social norms and customary law. Parts II and III then flesh out the theory by describing the various statutory and customary land rights which prevail in Ghana. Understanding of these rights is an essential predicate to the formulation of feasible policy proposals. Part II describes the statutory land law of Ghana, which, like that of most African nations, is heavily influenced by colonialism. Part III briefly describes the other half of Ghana's dual property system: customary property law and its attendant rights and structures. Finally, Parts IV and V translate the first three Parts into specific policy prescriptions for Ghana, suggesting, in Part IV, practical ways to integrate legal systems, and, in Part V, methods of integrating legal authorities such as chiefs into the formal system.
In keeping with the argument of this Note that land tenure policy must be country-specific and attentive to practical realities, these policy solutions are meant to be both flexible and specific to Ghana itself. They certainly do not comprise a one-size-fits-all land reform for all of Africa. Nonetheless, it is hoped that they can be valuable both to academics and to government officials contemplating land reform.
I. THE ECONOMIC AND SOCIAL ROOTS OF PROPERTY
This Note argues that land-based economic growth in developing countries like Ghana depends on the successful integration of statutory and customary land law. (29) In other words, the two foundations of property--as formal law and as a social agreement--must be closely aligned in order for property to play a role in enhancing economic efficiency. (30) In support of that practical argument, and to give theoretical justification to the policy prescriptions in Parts IV and V, this Part draws on New Institutional Economics (NIE) theory, which recognizes the value of both formal and informal institutions and applies a transaction costs-based approach to property rights and social norms. (31) By emphasizing practice as well as law, and taking a broad view of the institutions that make up an economy, NIE helps frame and explain the problems which the rest of this Note seeks to address.
This Part briefly explores two major characteristics of property rights institutions: First, that property rights play a role as an economizing institution, but second, and equally crucial, that they are also created by and dependent on social norms. Those two arguments can be synthesized into a third: The ability of formal property rights to provide economic benefits is largely dependent on how well those rights build on preexisting custom. In other words, two foundations of property--as formal law and as a social agreement--must be closely aligned in order for property to play a role in enhancing economic efficiency. (32) Well-drafted property laws do more than simply set down clear regulations for people to follow and rules for them to respect. They build on social understandings already in place. When they do not, the "transaction costs" of legal change can threaten the success of reform. Losing touch with realities of property practice can be particularly costly in societies such as Ghana where practice diverges significantly from written law. (33)
A. New Institutional Economics: Property Rights as Economic Institutions
Ronald Coase gave initial foundation to the notion that property rights could positively affect economic outcomes and helped set the stage for institutional analysis. Coase's The Problem of Social Cost illustrated the point that, given the assumptions of neoclassical economic analysis, (34) a clear delineation of property rights would lead to an economically efficient allocation of resources. "[I]f market transactions were costless, all that matters (questions of equity apart) is that the rights of the various parties should be well-defined and the results of legal actions easy to forecast." (35) But Coase himself recognized that transactions are costly; indeed, the neoclassical economy "only lives in the minds of economists but not on earth." (36) He warned:
A better approach would seem to be to start our analysis with a situation approximating that which actually exists, to examine the effects of a proposed policy change and to attempt to decide whether the new situation would be, in total, better or worse than the original one. In this way, conclusions for policy would have some relevance to the actual situation. (37)
Douglass North writes that Coase's "most important message, one with profound implications for restructuring economic theory, is that when it is costly to transact, institutions matter." (38) Indeed, the major efficiency-related contribution of institutions, and the most important economic reason for their existence, is a reduction in the transaction costs of exchange. (39)
North writes that institutions are "the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction.... [They] are perfectly analogous to the rules of the game in a competitive team sport." (40) Institutions are thus central to all human interaction and organization, and economists and other theorists have proposed appropriately broad frameworks to explain institutions' nature and functions. New Institutional Economics (NIE) is the most successful of these theories. (41) It suggests that institutions can reduce transaction costs by regularizing interactions and spreading knowledge through norms and other mechanisms. North argues that the "major role of institutions in a society is to reduce uncertainty by establishing a stable (but not necessarily efficient) structure to human interaction." (42) Property, specifically, is the institution most uniquely focused on reducing transaction costs. (43)
B. Social Norms, Transaction Costs and Property
Not all cost-reducing institutions are created by the state. Informal property institutions like social norms and custom can perform an economizing function just as formal property institutions such as statutory law and government do. (44) Indeed, property theorists have come to accept that community norms, operating independently of formal law, can lead to efficient resource allocation. (45) Sometimes this means that "social" property institutions act to address market failures. (46) A strongly held norm or custom of transparency in dealings in land, for example, "may render many economic transactions possible without a need to rely on elaborate and costly safeguards. In this, custom may contribute to economic efficiency." (47) Indeed, property conventions, norms, and customs are often more predictable and unchanging than statutory law itself, (48) as the lurching changes throughout the history of Ghana's own statutory land law demonstrate. (49) Internalized norms are often followed even when their violation would go undetected by society, (50) making formal policing less necessary and thus lowering enforcement costs. (51) This suggests that transaction costs can be lowered not just by improvements in statute, or technology, but by trust and noting consistent behavior. (52) In societies that do not have effective formal enforcement mechanisms, values such as trust and honor play an important economic role by filling the "enforcement gap." (53) It is thus common, when statutory law cannot meet the economic needs of the people, to turn to custom and other "institutions that act as alternatives to contract law." (54) In Ghana, where courts often cannot be relied on to enforce contracts, social relationships and norms take on an especially important role, just as they would in any society where state-run enforcement mechanisms do not adequately address enforcement costs. And besides aiding in enforcement, social norms can also help reduce search and measurement costs. (55) Because bargaining and measurement costs are high, particularly in developing countries, most contracts are incompletely detailed, (56) and thus informal agreements inevitably play a large role in their performance. Relying on these agreements when possible, rather than on costly formal institutions, minimizes the transaction costs associated with measurement and enforcement of contracts.
The importance of this informality reinforces the notion that property is in essence a relationship, not an object or a written rule. It is "simply an abbreviated reference to a quantum of socially permissible power exercised in respect of a socially valued resource." (57) In a legal and philosophical
sense, then, "property" does not refer to a physical object, but rather the rights to use it. (58) This is why, in legal parlance, one does not own land but rather rights in land, and these rights exist not as against other pieces of land but as against other people. The strength of property rights obviously depends on their acceptance by others, and thus social norms play a crucial role in the creation and maintenance of property, (59) Indeed, as Platteau has argued, "[t]he point is that, if property has no social legitimacy, it is no property because it lacks the basic ingredient of property, recognition by others." (60) Kevin and Susan Gray also point to the relational nature of property: "[T]he deep structure of property is not absolute, autonomous, and oppositional. It is, instead, delimited by a strong sense of community-directed obligation, and is rooted in a contextual network of mutual constraint and social accommodation mediated by the agencies of the state." (61)
Understanding property as a set of social norms makes it clear how broadly those norms apply. At times they overlap with formal rules, at times they compete with them, (62) and at other times they fill in gaps where formal rules do not or cannot reach. Social acceptance of property rights is thus of paramount importance not only in supposedly communal systems but also in systems that are relatively formal and give significant scope to "private" property rights. (63) Even in systems which seem to be dominated by considerations of market efficiency, social norms play an enormous role. (64) In such formalized systems, social convention may still serve as a kind of interpretive framework for deciding difficult property-related issues,...
NOTE: All illustrations and photos have been removed from this article.
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