Extending secure property rights

For most of the rural poor in developing countries, land is the primary means for
generating a livelihood and a main vehicle for investing, accumulating wealth and
transferring it between generations. Because land makes up such a large share of the asset
portfolio of the poor, giving secure property rights to land they already possess can greatly
increase the wealth of poor people who, unlike the rich, cannot afford the (official and
unofficial) fees needed to deal with the formal system.Unequal ownership of land is also a critical factor that creates and maintains
differences between women and men, with consequences for the coming generations. In
Kenya, for example, only 5% of the landowners are women, despite the fact that African
women produce 60%-80% of the continent’s food (Kameri-Mbote and Mubuu, 2002). A
World Bank policy research report, “Land Policies for Growth and Poverty Reduction”,
concludes that the increased control by women over land titles could have “a strong and
immediate effect on the welfare of the next generation and on the level and pace at which
human and physical capital are accumulated” (World Bank, 2003). Ensuring that women
have secure rights to land is thus critical in many respects, including the challenges arising
in the context of the HIV/AIDS epidemic, where the absence of secure land tenure for
women who have lost their husbands has been shown to be a key reason for costly conflict
and additional hardship.
Secure title to land not only promotes wealth creation but can also enhance security.
China illustrates that broad-based land access can provide a basic social safety net at a cost
much below alternative government programmes, allowing government to spend scarce
resources on productive infrastructure instead of safety nets. Having their basic
subsistence ensured is likely to have allowed Chinese households to take on greater risks
in non-agricultural businesses. With policies to foster lease markets for land, this also
contributed significantly to a vibrant rural economy.

Improving market access

Productivity gains can mean little without expanded access to markets. Market
structures in many rural regions of the developing world are very weak, so the allocative
efficiencies that markets achieve in fast-growing sectors of their economies do not
materialise. Instead, undeveloped market demand for outputs discourages producers from
raising production, while the consequent failures of incomes to rise in rural areas deters
private traders and rural enterprises from entering and doing business. A vicious cycle. In
the absence of functioning markets, rural areas remain trapped in a subsistence economy
in which neither the narrow agricultural production sector nor the wider rural economy
(both of which generate off-farm employment opportunities) can grow.
In the past many governments tried to address agricultural market failures in rural
areas by creating state-managed organisations, such as marketing boards. Most of these
interventions proved to be costly failures, often enabling widespread corruption to take
hold to rural economies, and are becoming less and less common. The problems associated
with weak markets remain, however, and new efforts are required if the agricultural sector
is to spark sustained and rapid growth in poor countries. These efforts should focus on
creating effective markets through improving the enabling conditions for wider private
sector participation. Removing restrictions on the movement, sale and purchase of
agricultural products is one example where changes are needed.
Insecure property rights, weak financial services and poor infrastructure are three
of the most common barriers to more efficient rural markets, often to the notable
disadvantage of women. There is mounting evidence for attention to all three areas to
transform stagnating rural areas.