More on Africa and Live 8

Bruce's comments (see comments below) came on the heels of an email from Fernando Leon regarding China - Africa relations, giving me a chance to respond to both.

Bruce is right that stable property regimes aren't enough to solve Africa's problems. All I wanted to argue was that they are a better place to start today than what Live 8 is doing. Let's assume that we can't, or won't, adopt the "change every government we don't like" option (in Africa, it's all too often: "meet the new boss, same as the old boss"), and that, while culture matters, trying to change it through policy is nonsense. (NOTE: I don't accept the argument that African culture makes people unfit for integration into the global economy, but I know Bruce also rejects that argument, so I won't rehearse the arguments here). That leaves your "social engineering" option, and the question of redistribution.

True, creating property rights requires legal changes that may look like social engineering. But de Soto's method of legalizing what is already possessed escapes some of the worst elements of progressive social engineering. He does not set up a plan for what "should be" done, but simply provides a means of entitling what people "down below" have already done. In most countries, the land occupied by individuals and families is public land. Giving them title to what they have possessed for years simply legalizes prior arrangements. Admittedly, it does get more difficult when the public land has previously been granted by the country's president to his friends. And that takes us to the more difficult question of political leadership. A "titling" program requires political leadership, and some will question whether African governments are willing to provide that leadership. Perhaps, and perhaps not. The actual cost of a "titling" program to a government is fairly minimal (people are already living on the land, and it is not being used for other purposes), and the political benefits of showing leadership are substantial (more stability and a good chance of re-election). In the cases were political leadership does not get behind a "titling" program, legislative moves to devolve some powers to local communities can begin the process of constraining the national government.

(ASIDE: A question I haven't thought about a lot comes from research being done by Rob Fleck and Andy Hanssen of Montana State regarding the neighborhood effects of good and bad government. With regards to the issues here, the question is whether political leadership with regards to a "titling" program in a region characterized by "bad" government might not have the negative effect of migration from neighboring countries that undermines the benefits the nation's citizens received from "titling" program. Andy and Rob's research suggests that these neighborhood effects are a major reason why we see "clusters" of good and bad governments. But their research also suggests that good governments tend to have positive effects on the goverance of neighboring countries, so the possible negative effects of migration may be relatively short-lived.)

What I've said about the benefits of a "titling" program may suggest my response to the question of redistribution. If redistribution is done from the top down, the inevitable result will be that the political leadership's friends will get more, and people will get less. A "titling" program approaches redistribution a different way: let's formally recognize what people already possess, rather than giving them more. De Soto estimates that the poor of the world possess (without title) trillions of dollars of assets. For them, those assets are "dead capital" because they can't be brought into the legal sector. All de Soto wants to do is turn that "dead capital" into mutable assets. The process of doing that will simultaneously change our measurement of "wealth" in developing nations, and reduce the poor's costs of doing business. Hence, they simultaneously are able to gain in terms of measured wealth and in terms of enhanced economic options.

Fernando asked about China-Africa relations. Should we support greater Chinese aid for corrupt governments? My foreign affairs pals in IR at JMC will probably disagree, but I don't really see the diffence between Chinese aid in this case and US aid. From the African end of things, a significant portion of foreign aid will be siphoned off into the hands of the political leadership, or will be directed to projects that help the leader's political situation rather than actually helping people. What we want to do is encourage the establishment of systems which restrain governments' abilities to do this. Property rights regimes and/or community-based development projects are a start. Most of the concern about Chinese aid is more about foreign policy than it is about which source of aid will help people more.