Physiocracy is the 18th century idea that all wealth is derived from agriculture (or ‘working the land’ in some other way). It’s long since been discredited, but has a special place in the history of economics as the first formal economic theory.
Though the physiocrats went wrong by overlooking the added value created by non-agricultural sectors of the economy, it is true that progress in agriculture enables other economic activity. If we weren’t able to rise above subsistence level, then none of us would have the time to do anything else but sow and reap to fend off starvation. But when a surplus of food is produced, then farmers can support a growing population of other workers – including those who make tools and develop methods for enhancing agricultural productivity.
This virtuous circle of surplus and reinvestment has driven growth throughout recorded history and continues to be important today – especially in the poorest countries where subsistence agriculture is still a big part of the economy. To escape poverty it is vital that farmers invest in their land.
But what if it isn’t their land? Or, rather, what if they can’t prove it’s theirs? Without secure rights to a piece of land, you’re less likely to invest in the long-term improvement of its soil, or build a workshop on it, or install a solar panel there.
The importance of property rights to development is something that is well understood, but according to Frank Pichel for Project Syndicate it is still a major problem in many parts of the world. A major component of that problem is the lack of adequate documentation:
“According to the World Bank, more than 90% of Africa’s rural land is undocumented. Overlapping and conflicting land-management systems are the norm, as are inaccessible, out-of-date, incomplete, inaccurate, or nonexistent land records. But while dysfunctional systems of land tenure have no doubt cost African governments millions in foreign investment, they have hurt African farmers most directly.”
As a result, the grounds for investment are missing – literally:
“Africa’s small family farmers – already burdened by soil degradation, climate change, and resource competition fueled by surging populations – face an even more challenging bureaucratic hurdle: no paper to prove that the land they call home is theirs. Uncertain of their ability to control their farms into the next season, farmers’ planning horizons shrink. Instead of investing in terraced fields, planting trees, and buying high-quality fertilizer, Africa’s farmers seek to maximize short-term profits. This is particularly true of female farmers, who face an additional thicket of discriminatory land laws and customs.”
In this respect, what Africa needs is more bureaucracy – i.e. a reliable system for surveying land and documenting its ownership. A properly functioning legal system is required to enforce property rights – but the authorities first have to know exactly who is entitled to what.
The economic, social and environmental benefits are clear:
“Communities with clear legal control over land manage those resources more assiduously than those with shaky tenure. The same can be said for individuals. In Ghana, farmers with strong land rights are 39% more likely to plant trees. In Ethiopia, farmers are 60% more likely to invest in preventing soil erosion when they have secure rights to their plots.”
When western nations first began accurately surveying and mapping their land, it was a top-down process. For instance, Britain’s Ordnance Survey grew from a decision by George II to map the rebellious Scottish highlands. This came fast on the heals of Louis XIV, who ordered the production of the first modern map of France.
In the 21st century, technology is enabling local people in developing countries to take the initiative instead:
“Advances in GPS, drones, and cloud computing have given communities the ability to document land – with or without official recognition or support.”
British aid money is being used to support these grassroots initiatives – which, if we want aid to help people become less dependent on outside help, is exactly the right approach.