3 Theoretical Background of Institutional Analysis of Land Degradation
3.6 Property Rights Systems for Land
The ability of individuals to produce their living or increase assets is dependent on their access to resources and the ways that they efficiently use and control those resources (Berry 1989: 1). In agrarian societies, land has played a major role as a means of living for generations, for the accumulation of wealth and the transfer of an asset to the next generation.
Land property rights determine the social status of the households (Deininger and Feder 1998:
1), and structure the use of natural resources, particularly in the case of its maintenance for the long term (Beaumont and Walker 1995: 1).
Output Average Benefits Average
Cost Benefits
Cost
0
Demsetz (1965: 354) explains the case of resource use with the help of three property regimes: communal, private, and state property regimes. In the case of the communal property regime, if one member wants to maximize his communal right, he will hunt more frequently.
This has a negative effect on the rights of all other members of the community and causes a strong need for negotiation among the members. The costs could be very high, because it will be difficult for some members to reach a particular point of agreement. In the case of private land, the owner wants to maximize his present value by taking into account alternative future cost-benefit streams. He is interested in the best selection of his present rights for maximum present values. “The state, the court, or the leaders of the community could attempt to internalize the external costs resulting from communal property by allowing private parcels owned by small groups of a person with similar interests.” A private owner can reduce costs and use resources efficiently and tries to maximize its present value (ibid: 356).
Hector Saez (1997: 1) has also examined the problem of land degradation by examining state farms, cooperative farms, and family farms. The author suggests that the family farm system is the best for resource conservation. He concludes that these farms change with respect to soil modification, plowing time period, and small scale deforestation (ibid: 483) because of human interference. Although state farms use state-of-the-art techniques of cultivation, these methods cause degradation in land, e.g., more use of fertilizer results in contaminated water. State farms are overstaffed with inefficient labor (ibid: 483). Small scale farms have the advantage of efficient workers who spend more hours on their fields and have more information to prevent their resource from degradation (ibid: 483).
Larson and Bromley (1989: 235) have discussed two fundamental concepts related to land degradation and property rights: 1) the control of a resource must be vested in a well-defined group for socially efficient use the called composition axiom, and 2) a well-defined groups must also act with a unified purpose known as an authority axiom. They explain that land as private property is better than that in the common property regime. This priority of private property is attributable to two different reasons; first, groups are not competent to use resources according to the preferences of the society, and secondly, individuals with distinctive authority are capable of using resources according to the societal preference in a specific time frame. Private users are always efficient in the management and allocation of resources, whereas the group cannot use them effectively, which causes resource degradation (Larson and Bromley 1989: 236).
The resource degradation issue is related to property rights only because of a misconception of the property rights’ regime of common property with open access (Bromley and Cernea 1989: 6). In developing nations, land degradation is caused by the ‘common property systems’, which is the result of some local level institutional setup of resource use. This system is established by powerful rulers, local administrators, or family heads. The interest of the whole group is the same at the beginning, but gradually, because of differences, heterogeneous interests, and an unequal concentration of power, there are chances of excludability from resource. As a result, deterioration and degradation of the natural resources are observed (Bromley and Cernea 1989: 10).
“An individual property right in a resource is a claim of value that the owner of the right can expect to be enforced by some power” (Larson and Bromley 1989: 237). It is not compulsory that a party holds all property rights; sometimes, another individual has certain rights.
Restrictions are imposed on certain behavior by state, community, family, or kinship (ibid).
The transfer of land from one person to another is a beneficial process, but only in the case where the new owner is more efficient and a good manager and has better ideas for its usage.
Normally, land-use change causes bad effects and degradation of the land. Its major examples are urban expansion and infrastructure development. The land tenure system is helpful in saving land from degradation, but at the same time, it requires the proper management and planning for land use and land-use change. In the case of the lack of planning and management, the productivity of the land can easily be lost, even land handled by a private owner.
A thorough review of the literature reveals that land-use change is generally accepted to cause land degradation, and therefore, in this study, a general preposition to be tested is that
“together with the negative effect of intergenerational land distribution and land transfer rights, land-use conflicts have positive effects on land degradation”. For the preposition, the hypothesis is “because of improper management and lack of planning, land-use change conflicts together with the land distribution cause land degradation”.
The theory of property rights in case of conflicts deals with the incentives of actors in their actions in the way that they confront each other in the struggle related to land (Alston et al.
1999: 171). In the model of Alston et al. (1999), actors are considered to behave in a strategic manner for the selection of land supply. This pattern is based on game theory and uses the rules of antagonist motivation. They have derived this model for the Brazil Amazon region.
The aim of all the actors is to win the ownership of the land, and violent conflict is defined as personal injury or death and/or physical damage of the property (land) under dispute. A conflict arises from the encroachment of squatters and efforts to expel the owner, which is legally supported by Brazilian law12 (Alston et al. 1999: 165).
The first important variable is the land value, as explained in Table 3.3 (ibid: 171).
If land owners are successful in attaining their rights and evict shareholders from their land, then the value of the land for them will be at a maximum, and the shareholders will not receive any shares. The second outcome is in favor of shareholders, and here, the land owners are deprived and receive compensation prices lower than the market share, as 0< γ <1. For these two outcomes, there is no conflict, as there is no ambiguity (Alston 1999: 172).
The third outcome is an unsolved case in which shareholders are neither evicted nor expropriated. Land owners want the maximum land back, and so they are in favor of the first option. Shareholders want to attain higher benefits, and so they prefer the second option. Both the land owners and the shareholders try to obtain a maximum. This stage can be prolonged for years until the conflict is resolved, because of a variety of reasons, which are sometimes external factors, such as the inefficiency of the relevant departments (registration and revenue), or some unsolved issues of both the actors involved directly in the conflict (Alston 1999: 172).
Table 3.3: Land Values under Different Outcomes
Outcomes Land value to
Shareholder
Land value to Land owners
Land owners successfully evict
shareholder 0 L
Shareholders successfully
expropriate land owners L γL
No result ΠL δL
Source: Adopted from Alston et al. (2000: 172)
In the case of the distribution of the property of the deceased among heirs, if we consider the rule of distribution or no distribution of land, the above theory can be explained in different
12 Constitution of year 1988, Article 196
ways. If land is not distributed between legal inheritors, then a conflict will arise, and if land is distributed but not transferred, then there may or may not be a conflict. These conflicts will cause degradation on the basis of land use. If the land is distributed and transferred, then again, there may or may not be conflict.
All these cases are explained in Table 3.4. The first situation is one of power asymmetry, where land shareholder 1 is stronger than the others and obtains a decision to his liking of not to distribute the land. His share of the land is in the form of whole land as ‘L’. Shareholder 2 receives no land in this case. All control of the land is in the hands of shareholder 1. Conflict is possible as a result of this distribution. The second possibility is that the land is distributed, and both shareholders get their shares. In this situation, two further outcomes can be expected;
there may or may not be conflict. In the case of no conflict, shares are given according to the law, and both shareholders are satisfied with their shares ‘L’ and ‘γL’, respectively. In the case of conflict, shares are not distributed according to the rules, and one shareholder is deprived of his actual share and is allotted less land. If shareholder 1 obtains a smaller share of the land, thenγ >1, or, in case ofγ <1, shareholder 2 is deprived. The third situation also has two outcomes. In this situation, the land might be distributed but not transferred to the actual owners. No conflict arises if all the shareholders are willing to live together and want to keep their land combined. In the second case, if the shareholders want to use their land on their own, then passive conflict might occur.
In this theory, the important variable is the conflict between the shareholders and the cases will be defined in Table 3.4.
Table 3.4: Land Conflicts under Different Outcomes Shareholder 2 gets
Together with land distribution, land-use change lies at the base of conflicts and land degradation. Hence, conflicts on the basis of land-use change are another important variable in this theory.
The relation between land degradation LD and property rights is dependent on three different variables: land being distributed between shareholders denoted by Ldis, land being transferred between shareholders and other persons ‘LT’, and land distribution conflicts arising between shareholders ‘Cdis’.
The first step explains the effects of property rights on the land degradation. For this purpose, the study will use three variables, viz., land distribution, land transfer, and conflicts attributable to land distribution, as independent variables and will regress all of them to land degradation as in Equation 3.1. increasing land degradation because of the improper implementation of land property rights of land distribution. If these laws are not appropriately executed, more conflicts will be generated and cause the occurrence of more degraded land.
In the case of land-use change, the efficiency of the different available options will be calculated in this study, as will the effect of different conflicts related to land use on land degradation on order to establish the second hypothesis. For the effect of land-use conflicts on land degradation, another regression is presented in Equation 3.2.
)
In this Equation, the ‘positive’ value of CLUC will establish that, with an increase in land-use conflicts, land degradation will also increase, whereas Cuse1 and Cuse2 indicate the response of respondent 1 and respondent 2 with regard to whether they will avail themselves of the option of land-use change or not. The positive signs of all these variables indicate that they all affect land degradation. The positive trend of these two variables supports the positive relationship between the land degradation and land-use conflicts. The last equation, Equation3.3, will establish the second hypothesis, as inappropriate land distribution and improper decisions for land use will cause land degradation.
3.7 Summary and Conclusion
Institutions and property rights affect the functioning of land and cause land degradation. In order to analyze such a situation in a particular region, three theories have been proposed and explained in this chapter: distributional theory of institutional change, the theory of property regime, and property right theory in case of conflicts. The framework has been built on the Institutions of Sustainability framework proposed by Hagedorn et al. (2002). In this framework, on the basis of the characteristics of the land and actors, some situations are created in the action arena, and as a result, some outputs are obtained as conflicts, which can be tested for the reason of land degradation.
On a theoretical analysis, this establishes that private land is more efficient with regard to ownership than any other type of ownership of land, and that land-use rights play an important role in the degradation of land. Similarly, distribution theory of institutional change is in favor of the distribution of land but is based on bargaining and some high costs. This theory concludes that if one party has a source of income other than the land, the members of that party are in a better position for bargaining and are the risk takers. They can set their own time preferences according to their resources and income. Because of the heir asymmetric power, they have a strong influence on the decisions regarding land distributions, causing land-use conflicts.
The property right theory applied to conflicts explains the situation of land degradation attribuTable to the land distribution and land-use conflicts. There are increased chances of land degradation because of land distribution resulting in family conflicts and land-use conflicts. To the best of my knowledge, no work has been done at the level of family conflicts with regard to land distribution and land-use change causing land degradation. This study will provide information to fill this gap by collecting data from the selected regions.