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Property rights, collective action and poverty reduction: a review.

While much attention has been given to examining various aspects of poverty, a number of studies have shown that welfare outcomes are determined by the institutional environment in which the poor exist, thereby, emphasising the inherently vital importance of institutions for poverty reduction. Though, sustainable natural resource management (NRM) can contribute to poverty reduction, other aspects must also be considered, including the distribution of property rights--between and within communities and households and the level of collective action. While, much recent work on property rights and collective action focus on their roles in NRM. inadequate attention has been paid to their role with respect to poverty reduction. By reviewing the relevant literature in this regard, this paper argues that understanding the role of property rights and collective action can provide insights into how policies and programmes can improve the choices and capabilities of poor people to pursue their goals and helps in improving their wellbeing.

Introduction

The failure of the trickledown theory to reduce poverty is now well acknowledged in the development circle. Benefits from economic growth have often bypassed specific groups, generally the poorer sections of society and even some times responsible for increasing internal inequality and a widening gap between rich and poor. This evidence indicates that not only growth, but the attention to the distribution of benefits from growth is crucial to eradicate poverty. However, the failure of both strict state control and unregulated market policies to reduce poverty brought a new focus on the role of governance institutions as well as on more micro-oriented targeted approaches. Though, sustainable natural resource management (NRM) can contribute to poverty reduction, other aspects must also be considered, including the distribution of property rights between and within communities and households and the level of collective action so as to get a better understanding of the issues related to poverty reduction. However, much recent work on property rights and collective action focus on their roles in NRM. rather than on how they can contribute to poverty reduction. In this paper an attempt is made to bring to the centre stage the institutions of property rights and collective action and their role with respect to other institutional factors often neglected in poverty research

Conceptions of Poverty

Despite the general agreement that Poverty is a serious debilitation of human welfare and potential, the exact definitions of poverty vary widely, from quantitative economic measures to broad definitions of social conditions. Monetary measures of poverty are subject to widespread critique for being too narrow to capture the critical dimensions of poverty (Narayan and Petesh, 2002). Poverty has many faces and exists in different dimensions and needs to be described and analyzed accordingly. Poverty, especially chronic, is always enmeshed in a matrix of power relations arising from informal patronage relationships, credit and market linkages, interaction with state, security of tenure etc (Kumar, 2004). Absence of secure rights exacerbates the relative powerlessness, as it provides rent-seeking opportunities to petty officials and facilitates alienation of assets through market or coercion. Thus, the power aspect behind poverty is absolutely crucial (Knox, 2004). Therefore, any analysis, which examines the link between poverty and property rights, can become meaningless where power dynamics are not taken into account. Thus, it is now increasingly accepted that poverty is not just a lack of material necessities, assets and income rather a multi-dimensional concept constituted by an interlocking web of economic, political, human and socio-cultural deprivations, and characterised by insecurity, vulnerability and powerlessness (Wangila, 2004). It therefore becomes important to understand poverty beyond income or consumption metrics and consider other poverty measurement issues. Thus, the notion of poverty has been broadened to include a deprivation in capabilities, voice and power that contribute towards a lack of well-being.

Moreover, many scholars now argue to assess poverty in a participatory way, i.e. to allow the concerned communities to define the parameters of poverty instead of using the usual internationally developed approaches which are based on outsider's or expert's view about the key attributes of poverty (Arisetiarso, Brian Jones). It might be more useful to let people define poverty themselves, as those affected know better than anyone else what poverty means. According to them recognising individual's understanding about his/her poorness is ethically acceptable than 'designate' poverty to them based on what they have or have not (Arisetiarso, 2004). Since, most of the interventions are based on outsider/ expert's view, therefore, they fail to capture the critical dimensions of poverty and ultimately distort our understanding about the cause of poverty. However, experience indicates that in many cases when a development project is introduced to a village, all members of the communities suddenly consider themselves as poor or poorer (free-riders) in order to seize the opportunities. Moreover, adoption of this approach to identify the key attributes of poverty again raises another issue with respect to the ability to do comparisons across regions and countries where perceptions of what defines poverty may be very different (Jagger, 2004). In this context, they give stress to understand the cultural background of the poor, which is essential to understand why some people remain poor while the other getting rich (Bromley, Arisetiarso). However, many scholars find problem with the concept of poverty, which defines poverty in terms of people's weaknesses and warn that such an approach may exacerbate or even prolong such a state (Colfer, 2004; Birner, 2004).

Property Rights and Poverty

Majority of the poor and poorest of the poor find themselves in the clutches of asset poverty which can be defined as a situation where the poor people because of their limited possession of assets face huge constraints in investment possibilities to improve the assets (make them more valuable) and accumulate assets. Property rights over natural resources are the key assets on which rural people build their livelihoods. The rural poor are usually those with weakest property rights; thus secure rights over land, water, trees, livestock, fish, and genetic resources are fundamental mechanisms for reducing poverty. The proponents of property rights school argue that assignment of exclusive property right give necessary authorisation and control over the resources and thus, will assure the right holder of the future benefits of investment and careful management, and bear the losses incurred by misuse of the resources. As a result, securing property rights provides a strong incentive for management. Although it is acknowledged that security of right is very relevant in many circumstances, yet many scholars disputed the claim that it is the only and most important aspect for poverty alleviation (Fakir, 2004; Mwangi, 2004) Other resources (technical knowledge on production practices, skills and labour, financial capital to finance expenditure on inputs, information on markets and marketing etc.) are needed to complement the effort that one requires to make prudent investment decisions for overcoming poverty. There are also issues of quantity and quality of these resources. Most poor people also happen to be mal-resourced in terms of land; having some parcels that can hardly sustain any surplus production or even meet the basic subsistence needs. Moreover, the rural agricultural landscape also depends a lot on injections from off-farm income, at least in the initial stages of farm development. Again the poor lack access to such income, which further limits their choices to move out of rudimentary agricultural production. Therefore, property rights do not work in isolation. But it must be understood in terms of what is going on in the broader economy, the nature of capital accumulation between different economic actors, and how they influence resource allocation, the working of the market, the macroeconomic decisions of the government, trade relations with other countries and the price of goods and services (Fakir, 2004). Thus, property rights in themselves have not and do not always translate to increased productivity and its desirable consequence-increased incomes for alleviating poverty (Kariuki, 2004; Pasha, 2004).

Much of the thinking about property rights and tenure security stresses the importance of completeness of the bundles of rights as increasing incentives for investment, etc. Exclusion rights are often seen as very important in this. However, assignments or change in property rights has a re-distributional effect: since assigning exclusive property (to individuals or groups) will automatically exclude others from sharing in the benefits who are accustomed to use the resource before the assignment/change of rights. Thus, any change affects the current distribution of benefits and always has a political component. Improving security of rights through titling schemes in fact change existing property right structure and create 'losers' as well (Di Gregorio, 2004). In many cases it is poor people who end up getting excluded. This has happened in a number of watershed management programmes in India (Meinzen-Dick, 2008). On this basis many scholars argue that property rights assignments are zero sum in their effect. However, many scholars disagree with such a view and optimistic in this regard (Colfer, 2004; Di Gregorio et al. 2008; Mwangi, 2004) According to them, the zero sum characterisation of property assignment may be a possibility at the initial time when property right is assigned. However, opportunities may be broadening out for those excluded after sometime. By re-contracting rights in different ways, disadvantaged actors may create opportunities to turn around their initial disadvantages into a more beneficial arrangement for them. So, the distribution of gains and losses may not be static (Mwangi, 2004; Meinzen-Dick, 2004). If the exclusion gives incentives for enough investment to be able to make the resource more productive, then it would not necessarily be a zero sum game overall. Thus, it has been pointed out that exclusion may lead to an improvement. If this is shared, then this will have a positive impact on poverty. However, Bromley expresses doubt about the efficacy of better property rights arrangements that are assumed to induce enough new investment to bring forth gains that could be used to compensate those who have lost out. According to him, such situations are only potential pare to improvements (PPI). If a section is powerful enough to enforce exclusion the probability is high that it will be able to exclude the marginal sections from the increased benefits (Husain, 2004).

Securing property rights through titling and formalisation of land tenure concentrates power with officials who maintain and update land records. It also advantages the elite because of their greater ability to access capital and negotiate the intricacies of bureaucratic and legal systems. It is clear that ensuring formal property rights may not ensure that poor will enjoy the benefits of the assets (Kumar, 2004). Therefore, any policy that affects existing property rights needs to look at what the situation on the ground and be careful and try to avoid actual dispossessions especially those that have the weakest rights (Di Gregorio et al., 2008). Changes in rights need to level the playing field and reward those who enhance productivity. Otherwise, changes in property rights may evoke conflict across gender and age. Moreover, ownership of property does not suggest that those who possess it are able to participate freely in the economy. In fact many factors, including their personal choices and choices of others can determine whether they are excluded or included within the overall economy (Fakir, 2004).

Collective Action and Poverty Reduction

Most of the poor find themselves in poverty not because of any failure of property rights system, but because of their negligence of collective action opportunities and obligations. Most of the collective action occurs when the economic system in which they are embedded fails to provide agreeable results and coordinated action is required to achieve this (Bromley, 2004). The rich and comfortable have little need for collective action to secure their assets via better property rights since they are embedded in political-economy system that can be relied upon to deliver comfortable income streams on a regular basis. Local elites generally use collective action to maintain the poor to remain poor (Arisetiarso, 2004). On the other hand, collective action or social mobilisation is important avenues for asserting the rights of the poor. Collective action can be important when no other avenues present themselves, and the poor certainly deserve protection from the acquisitive rich. Thus, collective action to solve poverty may be seen as a desperate effort by the extremely marginalised members of society to secure for themselves what the wider political-economic system has failed to provide for them (Bromley, 2004). However, the contribution of collective action to poverty reduction seems to be mixed (Pant, 2004). In some cases collective action may have helped the poor and in other cases may have made life more difficult (Mwangi, 2004). Thus, collective action and poverty are linked in two different ways. On the one hand collective action can be the tool of the poor who are powerless and will give a platform to express their voice. In the other hand, any kind of cooperation has costs and poverty reduces the ability of the poor to engage in collective action (Di Gregorio, 2004). Moreover, any action that is directed towards asset redistribution is intrinsically political in nature as it affects the underlying institutional rules that sustain the current status and tends to polarise constituencies: potential beneficiaries will push for redistribution, while previous owners (often including the state) will feel threatened by it. Here, collective action or social mobilisation can be crucial to sustain and strengthen claims and call for redistribution of assets. It is very unlikely that any redistribution ever happen without pressure from civil society. How the redistribution is implemented is also likely to be governed by power relations. All these changes require political will and political pressure and collective action plays an important role in this regard.

However, the presence of collective action does not necessarily guarantee success with respect to poverty alleviation, the process of creating and managing collective action is critical to the outcomes. Communities are complex pluralistic entities, with members being part of different overlapping socio-economic groups. Such membership imparts power that can be used for exclusion of weaker sections from collective action. This will obviously increase poverty and vulnerability. So, we have to look at the boundaries of the community undertaking collective action, and examine the socio-economic identity of non-members. Thus, it is important and necessary to consider the distinction between the geographical/political community and the group undertaking collective action (Husain, 2004). In many circumstances, the outcomes of poverty alleviation paradoxically promote extensive appropriation of natural resources, which in turn threaten the collective action initiative itself in the long run (Arisetiarso, 2004).

The primary effect of monetarisation and its hegemony within the communes has been the weakening and de-valuing of traditional social capital; and the subsequent need for new forms of social contracts, incentives, and compliance. Local institutions that are unable to adjust to these new social pressures are incapable of maximising the value of their collective economic assets. As national economies become more and more monetarised, new conception of shareholding, rights of access, use, and apportioning of benefits become a prerequisite. This highlights the need for a supportive environment at the local level that allows for rapid adaptation to new kinds of social contract and institution building. As a result of the changing circumstances, traditional forms of collective action are changing due to market pressures and globalisation. As societies and cultures change, new forms evolve to accommodate new circumstances. (Kunen, 2004).

Thus, securing the property rights of the poor is only a partial solution that fails to address the fundamental problem-the systemic issues that produce poverty. The problem that the poor face is a result of their lack of power to influence decision-making, and resource allocation, within the overall economy (Mwangi, 2004; Bromley, 2004). Lack of control implies vulnerability to risk and future impoverishment. Moreover, it is akin to lack of power and capacity for affecting change and self-determination which are fundamental component of poverty (Knox, 2004). They are at the very bottom of very poor societies because the institutional arrangements throughout those economic systems are structured over time to protect the interests of the powerful and wealthy.

Institutional Change and Poverty Reduction

Although consensus has been achieved among the scholars that institutional change is essential for development in general and for alleviating poverty in particular, yet there exists much disagreement about how to achieve such a change. According to Bromley, institutions (norms, rules and entitlements) are nothing but reflections of the prevailing ideas held by a group of people. And they have been constructed over time by those in a position to have their ideas (their view of the good) given the official sanction of the state. So institution can change only when the reigning idea about some aspect of our daily life is no longer seen as natural, or normal, or right. However, institutional change is not mechanical but ideational--the citizenry gradually comes to hold new ideas about what is good (Bromley, 2004). Thus, institutional change can be viewed as a process/exercise where old ideas lose out to new ideas, and then the norms and rules and entitlement relations in a nation-state undergo change.

According to Bromley, development is nothing but an idea, the idea of moving beyond the status quo in a way that improves the life prospects of all members of the nation-state. But, scholars like Bimer have expressed doubt that ideas are conducive to bringing about the necessary institutional change and viewed social justice as a more powerful idea than development. However, Bromley is very much sceptical about the efficacy of social justice to bring institutional change (which Bimer advocates as a motivating reason for institutional change). In this context, Bromley argues that political pressure does not only come from the disadvantaged in the respective countries, but that the donor community can also play a very important role and put pressure on the unjust regime to bring the necessary institutional changes. Giving the example of South Africa's sudden shift in institutional arrangements Bromley argued that highly stratified and unequal settings and circumstances would not be corrected by appeal to social justice. Those inequities will be addressed and corrected only when the international donor community puts serious and compelling pressure on the regimes responsible for those situations. Bromley also appeals to the research community to make a case in this regard by showing the negative implications of serious inequality on the economic and political future of unjust regimes. He strongly believes that such an approach will tackle systemic poverty and inequality on instrumental grounds rather than on moral grounds (social justice) and recommended this approach as a plausible model for other rogue regimes around the world.

The donor community has been identified as a key actor, and their pressure on rough regimes as one avenue through which desired institutional change might occur. Bromley also recommended to the international donor communities that they should attach a new form of conditionality i.e., development conditionality and should make clear to the aid-receiving countries that assistance will be given to them only if they accept the new conditionality, i.e. no assistance unless the settings and circumstances of the least-advantaged members of society are the direct and durable (and predominant) beneficiaries of that aid. He is optimistic that if the assistance will come with this new conditionality, then the search for allies to implement the development activities will not be problematic. In the other hand, the proponents of social justice consistently are placing the burden of deep structural change entirely on the poor-the very ones who often have the least power, and the most to lose from confronting the status quo. It is true that if the poor will gain greater bargaining power, then they will be able to meaningfully negotiate their interests. But the non-poor and relatively wealthy persons who claim to embody morals of social justice should come forward and use their influence, power, and access to political space to bring the desired changes from above. So, instead of entrusting the task of institutional change only on the poor, the time has come to involve the non-poor and the research community in this process (Knox, 2004).

Conclusion

Much of the conceptual and empirical literature on property rights and collective action has dealt largely with natural resource management rather than poverty reduction. Understanding the effects of existing property rights and collective action rules on the conditions of the poor can go a long way to inform policymakers on how to achieve better poverty reduction results.

References

Arisetiarso, S (2004). Conceptions of Poverty and the Contributions of Property Rights and Collective Action to Poverty Reduction (Overview of Concepts), 1St Session; E-conference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

Bimer, R (2004). Actors, Institutional Change and Poverty Reduction; (5th Session), E-conference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

Bromley, D.W. (2004). Actors, Institutional Change and Poverty Reduction; (5th Session), Econference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

Bromley, D.W. (2004). Asset Poverty, Provision and Access to Public Goods/Services; July 6th-llth (2nd Session), E-conference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

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Mwangi, E.N. (2004), Conceptions of Poverty and the Contributions of Property Rights and Collective Action to Poverty Reduction (Overview of Concepts), 1st Session; E-conference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

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Pant, L. (2004), Conceptions of Poverty and the Contributions of Property Rights and Collective Action to Poverty Reduction (Overview of Concepts), 1st Session; E-conference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

Pasha, S.A. (2004), Conceptions of Poverty and the Contributions of Property Rights and Collective Action to Poverty Reduction (Overview of Concepts), 1st Session; E-conference organised by CAPRi on Poverty, Property rights and Collective Action (CAPRi-talk).

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San jit Kumar Rout, Economist, Livelihoods and Natural Resources Management Institute (LNRMI), Hyderabad. E-mail: sanjitrout2003@yahoo.co.uk.

M. Srinivasa Reddy, Assistant Professor, Research Unit for Livelihoods and Natural Resources (RULNR), Centre for Economic and Social Studies (CESS), Hyderabad. E-maihsreenivasdrreddy@yahoo.com
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Author:Rout, Sanjit Kumar; Reddy, M. Srinivasa
Publication:Madhya Pradesh Journal of Social Sciences
Article Type:Report
Geographic Code:9INDI
Date:Dec 1, 2013
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