Report
Working Group 2: Property Rights

1. Introduction

Seventeen members of the Working Group on Property Rights (WG 2), led by Chair Ashraf
Ghani, met during November 14 - 15 at the offices of the Commission Secretariat in New York
City to develop a plan for contributing to the Commission's work. WG 2 identified several ways
in which it might advance the work of the Commission. Over the coming months, through the
work of its members and drawing upon the energy of national consultations organized by the
secretariat, WG 2 will explore ways in which secure rights and secure access to property can
empower the poor to gain greater control over their lives and free themselves of the stifling
economic and social effects of poverty.

ecision makers committed to eradicating poverty are the ultimate audience for the
Commissions work. The work of WG 2 is intended to help the Commission present a
realistic and informed appraisal of the ways in which property rights can meaningfully contribute
to the improvement of the livelihoods of the poor, as well as a realistic appraisal of the political,
financial and institutional commitments that are necessary to realize these benefits. It is
necessary to define what successful outcomes will look like, and to realize that useful
improvements to property rights regimes will require sustained political and financial
commitments.


Property is a contested term. Historically, it conjures the enclosure, a process of literally fencing,
staking and drawing boundaries leading to the exclusion of the poor in Europe and the Native
Americans in North America. During the colonial period, there was an elective affinity between
law and exclusion, for the colonial state operated through the instrument of law to seize the assets
of the native peoples in all continents and used gender, race, class, caste and tribe as key
categories through which to channel and mediate access to assets. In the 1990s, the implosion of
the Soviet Union resulted in massive seizure of public assets for narrow private gain. And,
conditions of prolonged conflict in 40-60 countries of the world have been making the poor more
vulnerable both to loss of their lives and their assets. Gendering of war has been especially
marked, as unprecedented numbers of women are being subjected to violations of their bodies.
Historical memory and contemporary evidence, therefore, make for caution, if not outright
scepticism, regarding a program premised on the legal empowerment of the poor.

reation of wealth, so goes the other side of the argument, has overcome its process of
genesis in primitive accumulation, for rule of law is critical to the globalizing circuits of
circulation and expanded accumulation of wealth. Property as a bundle of legally defined rights
becomes the lynchpin of a process of transformation of tangible assets into abstract relations of
credit and exchange. If an effective market is the key to the creation of prosperity, then the
greatest injustices against the poor are the constraints that prevent them from transforming their
assets into property regimes and denying them access to the market. The emphasis in this
narrative is on releasing the potential that resides within poor countries and among the poor
people. The key to unlocking dead capital - de Sotos term for assets held by the poor but
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prevented from being given a life through circulation and abstraction - is a process of
transformation of assets into fungible capital. Reduction of poverty, therefore, can be changed
from a mere slogan into a real program of action and commitment.

As people who have devoted their lives to the understanding and reduction of poverty, members
of the group drew on their experience and on the ongoing work and findings of their
organizations to speak to the issue of legal empowerment of the poor. Scepticism and hope were
both in the air, as the discussion focused on the contested conceptual and policy terrain, and on
finding ways of moving forwards. Five key issues emerged as the constitutive themes around
which the future program of the working group could be framed. After feedback from the
Commission and exchange of information with other working groups, our group will decide on a
concrete work program to move forward. The dialogue that began on November 14-15, however,
is continuing virtually, with members sharing their ongoing work and directing the group to fresh
insights and new sources.


2. Value-Added/Rationale

The group sees its value-added contribution at the level of strategy: discerning knowledge in the
pattern of information, and extracting policy wisdom from the knowledge. Conceptually such a
contribution would require dealing with power, law, property, and capitalization as a network of
conceptual relations that can be translated into policies and programs of action.
Recommendations to policy-makers and other stakeholders will be in the form of a menu of
options that can be adapted and tailored to context. Learning from failures will be as significant
as learning from successes. Gender will constitute a cross-cutting theme and vulnerability will be
operationalized to provide a realistic assessment of risks and risk-management strategies.
Drawing lessons from the experience of global, regional and bilateral developmental institutions
that have banked on champions for success of their operations will be particularly important to
foreground issues of implementation through participation and commitment of stakeholders.
Nationally or locally driven programs that have resulted from discussions and pragmatic alliances
among different stakeholders will have particular relevance to understanding sustainability.


3. Mobilizing Power

Any program of legal empowerment of the poor will by definition require a change in the
mechanisms of redistributive and collective power
1
. Distributive power is the power of Actor A
over Actor B. For B to acquire more distributive power, A must lose some. But collective power
is the joint power of actors A and B cooperating to exploit nature or another actor, C, or to create
new mechanisms of wealth creation through agreement on new rules. Structural change in
Europe, North America, and East Asia has entailed creative uses of power to give the people at
the bottom of the economic, social, and political order a stake in the system. Redistributive

1
The distinction was made by Talcott Parsons, 1960:199-225.



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Street, 18
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floor New York, NY 10017 Tel:212.297.5794
power has not disappeared, as these societies remain deeply stratified, but the exercise of public
power has changed from a zero-sum game to a more inclusive process.

he concerns voiced by members of the working group regarding power as an obstacle flowed
from their first hand observation of the practices of the elites of developing countries. Many
a project begun by a minister or president has been abandoned by a successor. And a strong case
can be made that developmental projects prepared without proper attention to their adverse social
impacts have increased the vulnerability, and lowered the standards of living, of the poor.
Equally, structural adjustment programs driven from outside may have contributed to increasing
destitution rather than creating the enabling environment for inclusive growth.

There have, however, been breakthroughs. From Germany, Japan, and the United States in the
late 19
th
century, to southern Europe and Ireland in the late 20
th
century, some political elites have
shown that they can muster the imagination, energy, and will to use power to create mechanisms
for the participation of the poor in the system. Singapore, Hong Kong, and Dubai are examples
of city states that have pursued differing yet successful strategies that have transformed them
from third to first world standards of living.

Whether power will be a constraint or the mechanism for the empowerment of the poor depends
critically on the effectiveness of the state. The group agreed to a classification of countries into
three models effective states, weak states, and dysfunctional states that could be a useful
organizing principle for the groups recommendations. State effectiveness can be judged by the
performance of an agreed set of functions that a modern state performs for its citizens. The
judgement of the citizens as individuals and groups on the degree of responsiveness and
accountability of the public institutions to the public, then, provides an important basis for the
degree of trust to be placed in a
government to undertake a program of empowerment of the poor. The historical record of a
country, therefore, should be a key factor in the analysis of the risks to the poor and the type of
risk management strategies to be put in place before program implementation.


4. Law

In developing countries, law has a closer elective affinity with making the poor more vulnerable
than with their empowerment. The mercantilist state in Latin America used law to redistribute
wealth rather than to create it. Organized into redistributive combines, economic and political
groups under these conditions focused on influencing government in order to obtain a
redistribution which favors them or their members.Pol