Like every Friday, from Raj Nallari and Breda Griffith's lecture notes.
This and upcoming weeks we will be looking at the linkages between land, economic growth, and poverty reduction.
Access to and ownership of land is of critical importance to the lives of the poor and in particular for the rural poor, affecting directly their capacity for moving out of poverty. Owners of land have a greater incentive to make that land more productive and thereby increase their welfare. Land as an asset assumes that it can be exchanged through market and non-market channels. For example, land can be used as collateral to raise funds for further investment thus contributing to economic growth and the reduction of poverty. Non-market channels refer to inheritance and land redistribution by the state.
Land inequality is a serious problem in most developing countries, impeding efforts to increase economic growth and rein in poverty. Under these circumstances, the state can play a critical role in achieving socially-desirable land allocation and utilization, in particular where unequal land distribution has served to keep large sections of the population in poverty.
In examining the issue of land, economic growth and poverty reduction, we will begin by looking at the reasons why land inequality has characterized the developing world and the impact that this has had on economic growth and poverty. Then we will examine in particular the effect of the unequal distribution of land for the rural poor. Land inequality has been shown to impact on three key aspects of economic development —education, institutions and financial development—we will examine the literature behind these aspects. Finally we will look at the role that government can play in bringing about a more equal distribution of land by discussing the role of property rights. We will conclude with an examination of land titling that has become a modern property rights tool and the pluses and negatives associated with such titling.
Next Friday: Unequal Distribution of Land in Poor Countries: Background and Impact