Property rights essential for development

In this excellent presentation, property rights expert Professor Craig Richardson explains that property rights are the key to economic development. He says they are like a foundation for a house - hidden strength that allows a number of important things to take place - allowing collateral for loans, transforming people’s time frames from months to generations, and stimulating economic activity to a far higher level as a result. He backs up these claims with statistics and hard data.

Professor Richardson also discusses the importance of making it simple and quick to set up a new business. For example, according to World Bank statistics, it takes just 4 days in Rwanda, whereas in Zimbabwe it takes 61 days;  registering a property in Rwanda takes 7 days while in Zimbabwe it takes 36 days.  He says that property rights are not only key for local business development, but also in the eyes of foreign investors around the world. Again, Rwanda had made superb gains in this area to become nearly the best in the world.

Professor Richardson also challenges the argument of controversial Professor Ian Schoones (who has written extensively on farming in Zimbabwe) that government-regulated land is in fact superior to freehold title. He points out that under present conditions, the government has the right to cancel an agricultural lease with only 90 days notice, if the leaser of the land is not living up the subjective standards of how the land is to be “properly used”.  This represents tremendous risks to lending institutions, which at the very least will push higher interest rates onto the borrowers, and at the worst will freeze up credit lending, he says.....  

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