Property rights are central to alleviating poverty, but does ownership really matter?

The common understanding of property rights and its link to economic growth is built on the importance of ownership in rural contexts. But what urban dwellers really need is security and legitimacy of property.

Dhaka is already home to over 15 million people and continues to grow daily.

Bangladesh is one of the most crowded countries in the world.  It should come as no surprise that land is a scarce resource in high demand.  For generations, people have viewed land as an asset, often one that enables them to generate income.  Land ownership potentially enables people to make money and increase their wealth.  Additionally, it signals a status of legitimacy and stability, which is also extremely important. The ultra-poor tend to be those that own at most a tiny piece of land, too small for farming.

Bangladeshis are desperate for ownership and access to land.  Women have far less access generally, with just an estimated 2% of agricultural land in Bangladesh belonging to women.  In a largely agricultural economy, access to land largely determines the ability to generate income.  Land ownership historically has been a key strategy for generating wealth.  Therefore, the denial of property rights (and the implied ability to access and control one's land) enables all of the other conditions that contribute to poverty.   This issue has been in the international media more recently because of large land deals for private developers that are conducted without consultation or consent of the communities who own the land.  Most experts conclude that these forced evictions largely result in increased risk of poverty, food security, and more.

Unfortunately, land ownership is a mess in Bangladesh.  Worldwide it ranks 176th out of 183 countries in "ease of registering property." Land disputes account for the majority of cases in the legal system. However, perhaps indicating the inadequacy of satisfactory or enforceable resolution of disputes through legal avenues, land disputes are also a major motivation for violence and murder.

In rural areas, the major cause of property disputes and related issues is the lack of good law enforcement.  The laws are on the books, the property rights are in the files, and the land ownership  system is there. The major issue is how one can actually get the system to do its job!

BRAC has a large legal aid program that recently started working on property rights in limited areas. I met several of our clients, all women, to learn about their experiences of trying to reclaim access to land that they owned.  My first surprise was that their stories were long -- many had been working for over a decade to gain access to their land.  The second was that their property disputes were usually with people who are close -- with the brothers who won't give their sister her share of land after the death of a parent, or with a husband's friend who won't share the profits of a business with a wife after her husband dies, even though she owns the space.  Without access to land and often alienated from the family, these women struggle economically.  Gaining access takes money and time.  Those holding the land may try to intimidate the women or worse -- one spoke of her son getting beaten up as a warning to them both. And going to court may only be a waste of time and money: "How can you win?  I can always pay the judge more than you can!" 

It's hard not to feel a little claustrophobic when walking through
Dhaka's slums.  Geneva Camp.

Land ownership and rights in urban Bangladesh are another story.  The capital city Dhaka is home to more than 15 million people and has an average population density of 115,000 per square mile (for comparison, New York City's is about 26,000 per square mile).  Over 3 million people in Dhaka live in slums, and are officially considered to be occupying land without permission, or "squatting".  They can be, and frequently are, evicted forcibly at a moment's notice.  In the past four years, I've seen bulldozers arrive with no prior warning and heard of slums being set on fire, in order to displace communities.  As a consequence, slum dwellers live in constant insecurity, and cannot leverage their homes or land to begin to accumulate wealth the way that rural landowners can.  Notably, the major issue in urban areas is not ownership (which it often is in rural areas) but security.  

Since cities offer more job opportunities, urban dwellers are largely looking for a place to live, not farm.  Therefore what they need is a place where they can stay safely, keep their belongings securely, and access important services and goods.  People move to the cities for the jobs, and stay because they can earn relatively higher wages, but given the current situation, pursuing these opportunities forces them to take on huge risks.

There are few affordable homes in cities that current slum dwellers can legally purchase or rent, so there is also little chance of moving out of this precarious status.  Some slum communities create their own system of ownership. It's not official, but recognized by the community, enabling people with access to a little more land to draw rent and feel relatively secure in their ownership. In the large slum across from BRAC, Korail, I've met people who hold a paper "deed" to their home. However, if the government decided tomorrow to raze the whole slum and develop it commercially, that paper wouldn't do them any good.  In practice though, they've lived there and rented out other flats there for decades.  But it's all based on informal systems that get no recognition or support from the government.

The illegitimacy has huge economic and social consequences for the communities. Business owners don't like risk.  They are reluctant to invest in areas that might get bulldozed or go up in flames at any given time.  So slums are passed over by many formal investors. The public sector also ignores slums because they are illegitimate.  Though rural dwellers are provided public goods like schools, police, water, and other public goods, slums are denied these.  The police don't respond.  Schools and health facilities are not provided.  Water and sanitation facilities are largely absent from slums, leading to huge health issues.  Even electricity has to be stolen.  

For social services in these contexts, non-profit organizations step in to fill the gap.  But who steps in to fill the void of law and order?  In Bangladesh the "solution providers" are called mastaans, and many slums worldwide probably have a similar "solution": thugs or gangs that enforce an order of their own. They maintain the peace, but in a way that benefits them.

It all starts with the simple issue: tenurial security, with or without owning land.  Given the soaring prices of land in Dhaka, I doubt that property ownership is viable for most slum dwellers.  If that's the case, then the focus should be on securing their rights as tenants and legitimate citizens of the city. Urban elite have this; they sign contracts with terms and conditions, they expect and receive public services, even if they don't own their apartments.  Even without ownership, they have "property rights" as tenants, and this creates a platform for economic success.

But the poor don't, and that is one large barrier to moving out of poverty.  It impedes their ability to create wealth, gives the public sector an excuse to ignore them, and leads to communities ruled by organized crime.  This problem will never be solved through service delivery, training, and system building. The basic problem is one of security and legitimacy, which frankly, seems fairly simple to solve if the political will is there.  Then we can start talking about systems and enforcement and all the other problems that await us!

For more depth, Doug Saunders writes extensively about how cities have successfully and unsuccessfully addressed property issues of the urban poor in Arrival City.  I've also written more about the consequences of tenurial insecurity for urban health and emerging solutions in South Asia.