A little story about what is said to be the most effective piece of foreign aid ever -- some typewriters. This is one of those stories that is true at base even if the “ever” there might be being a little too extreme. For it is actually true that there was once a cargo of foreign aid which was incredibly successful and effective -- and it consisted simply of some typewriters.
This speaks to an editorial in this newspaper. Where the point is made that land is important. Of course, that's obvious -- without it we've no place to make a stand now, do we?
But the system -- the seemingly boring system -- of registering who owns land, who can do what with it, is vital to an economy.
That is, this isn't just about fairness -- hey, that's mine and you can't have it -- it's about everything. Including whether a nation gets to be a developed economy or not.
Typewriters seem quite a long way from that but they matter. Madagascar has its own language, like a lot of places, which means that the layout and even the key ordering of a typewriter is different.
Madagascar also has a land registration system, the usual nightmare of paperwork you'd expect if the historical colonial power was the French.
But what Madagascar also had was just the typewriters, in that Malagasy script and layout, that had been left from colonial times. Therefore the land registration system could not work.
For typing out a document on a typewriter that's too old is like printing a document on a printer out of toner. Especially when carbon copies are required -- hey this was French bureaucracy, of course carbon copies were required.
The decades of use had simply worn down the typeface so much that one might gain a useful smear on the paper rather than the desired clear character.
For once, someone with some brains was in charge of US aid to the country and they ordered up -- from Smith Corona, the last typewriter makers the US had at the time -- a set of Malagasy typewriters.
This enabled the land market to work again. To the great benefit of those who would inherit, those who wanted to sell or buy and -- of course -- to the food supply and the economy in general.
Do you want proof of this? It's too perfect a story to ever be investigated for proof, journalism union rules that is. However, I assure you that it is true!
The reason why it was so effective was something pointed out by the economist Hernando de Soto. Many people own things but that de facto (in fact) ownership, while hugely important in real life, is very different from de jure (in law) ownership. For only if you have legal ownership can you then use that ownership in a legal sense.
Well, obviously, say the crowd. But now think about what you can do in law -- you can borrow money. You can borrow to improve your property, you can borrow to do something else.
No bank will lend to a farmer to improve his paddy if he cannot prove that he owns it. No utility will put electricity, water, sewage, etc into an area dependent upon “traditional” forms of housing or land ownership.
They want documents, proof that can be carried to a law court. So, slums remain mired in sewage and dark at night. Those who do actually own a house cannot leverage that into a bit of borrowing for a tea cart or a rickshaw.
Now yes, I'm using the activities and desires of the desperately poor here. But then they are the people for whom legal recognition -- de jure -- of de facto property rights is most important. You and me, we'll be fine.
That shack in the country, well, as long as we get to use it for weekends, who cares? But to someone poor, that's their starting capital in this life. To us, legal ownership isn't the point as long as we can use it. To someone poor that legal document is absolutely vital.
So, yes, the legal system for the registration of land ownership is very important. Vital even, as this newspaper says. But the people it really matters to are the poor.
Because those who have little to near nothing need to be able to prove what they do own -- cheaply, efficiently, and fairly.
Tim Worstall is a senior fellow at the Adam Smith Institute in London.
