3 - The Political Origins of the Property Rights Gap

Summary

This chapter begins with existing explanations for rights informality: weak state capacity, left-wing ideology, and competing state goals. It then develops a theory for understanding why governments that distribute land often withhold property rights, presiding over widespread rural property informality for long periods, and why other governments grant more secure property rights over land. Authoritarian regimes tend to redistribute land from large landowners to peasants but withhold property rights. Democracies often grant property rights to beneficiaries of previous land reforms but do not redistribute additional property. This difference is driven by how political regimes empower or disempower landed elites and peasants, differences in institutional powers, and constraints that political elites face, and the incentives of incumbency and political competition. Democracies are better at channeling popular demands into policy. But policies can also be blocked by the powerful in a legislature. Finally, foreign pressure during economic crisis can force a country to turn to international financial institutions for help. Privatization and greater security of property rights can be a condition for support.