Stop the presses! Hernando
So argues John Gravois, a reporter for the Chronicle of Higher Education, in a recent Slate article. Gravois sets out to debunk the man he considers "the patron saint of the global elite." He makes some good points—more on those later—but his charges against
Gravois accuses
This is a gross distortion of
Case Specific
The book that first brought
Indeed, as
"Peruvians, in general, and informals in particular, have specific preferences, skills, and patters of behavior which can be regarded as social, cultural, or ethnic factors that dictate the existence of informality. They also have preferences for specific goods and services, which can be regarded as economic factors." (p.184)
In addition to culture, he also notes that legal institutions are crucial:
"All the evidence suggests that the legal system may be the main explanation for the difference in development that exists between the industrialized countries and those, like our own, that are not industrialized." (p.185)
Without rule of law, any reforms—including titling—cannot occur in anything resembling a sound manner. In many countries, like
Gravois does give some credit to
Ineffective? Harmful?
First, the allegedly ineffective. On lending, Gravois notes that, in some countries, "Faced with a massive surge in legalized but tenuous properties owned by poor people, banks have simply adjusted their criteria for lending, and in some cases care more about stable employment than a land title." That banks care most about income is obvious. So is the fact that they also care about collateral. Would Gravois argue that an employed laborer with a land title is no better off than an employed laborer without one? He doesn't say. Also, to find work, individuals need to feel secure enough in the land to be able to leave it.
Now, the allegedly harmful. Forced evictions, like those he cites in
Gravois rightly condemns gross misapplications of land titling. So would
Gravois also misrepresents
"Contrary to the belief widespread in Latin America, the economic importance of property rights is not that they provide assets which benefit their holders exclusively, but that they give their owner sufficient incentive to add value to their resources by investing, innovating, or pooling them productively." (The Other Path, p. 178)
Further, the approach Gravois endorses, British urban planner Geoffrey Payne's plan to introduce improvements before titling to give those titles greater value, could very well complement
The Other Path, Indeed
Hernando
So why does Gravois show such distaste for
Gravois makes some valid points. There are no panaceas for economic development. Policies can be misapplied. And there are other things besides property titling that are necessary to lift people out of poverty. On this last count, he unfortunately fails to mention an essential element--so glaring by its absence in his