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Pitfalls For Privatization

  • Esther Mwangi
  • In The Mystery of Capital, Hernando de Soto (2000) emphasizes that formal land titles can improve the livelihoods of the world’s poor. He, along with others, has argued that formal, individualized property rights can enhance investment, productivity, and sustainability.

    But the process by which private property comes into existence faces problems of equity and efficiency. This fact is illustrated by the transformation of community property rights among Maasai herders in the Kajiado district of Kenya into private rights during the 1980s and 1990s.

    In 1968, the Kenya government established group ranches in Kenya’s semiarid areas to control environmental degradation and to increase herd productivity. Group ranches are land that has been demarcated and legally allocated to a group such as a tribe, a clan, section, or family (Kenya 1968). The members jointly own legal title to the land and elect a management committee to coordinate and implement development projects on the ranch. Individuals retain certain rights, such as residency rights, and the group as a corporate body retains some rights, such as control over grazing rights, tillage, and water resources.

    This collectivization is widely viewed as a failure, however. Demands by Maasai pastoralists for subdivision into individual, titled parcels gained momentum in the 1980s. Among other things, the members wanted to use their land as collateral for loans that could be invested in ranch development. Although this interest in privatization has been widely documented (see, for example, Galaty 1999; Mwangi 2003; Rutten 1992), little has been written about the process of subdivision. As a graduate student in public policy at Indiana University, I studied the subdivision process in four group ranches.

    When making the decision to subdivide, members of the group ranches agreed that parcels following subdivision must be roughly equal. They agreed that an elected management committee would oversee the division, assisted by a demarcation committee, and that group ranch members would register their preference for parcel location either verbally or in writing to the official management committee.

    The group ranch committee, on behalf of its members, was expected to formally apply for subdivision to the Registrar and then the Land Control Board. The final duty of the Land Control Board was to confirm that all registered group members have been allocated parcels that are relatively equal.

    Although group ranch members endorsed the oversight of the management committee, they did not determine ways of bringing the committee to account in case it failed to fulfill their expectations. However, they did select to the committee those individuals they perceived to be honest and industrious. Some committee members were also drawn from the Maasai customary leadership structure. The demarcation committee, constituted to assist the official committee, was also chosen on the basis of personal integrity as well as with the aim of achieving clan and age balance and ensuring that all residential areas in each group ranch were represented in decision making.

    Contrary to members’ expectations, however, the subdivision did not result in equal parcels�?quite the opposite. In the group ranches Enkaroni, Meto, and Nentanai, two-thirds or more of the registered members received belowaverage parcels. Nine percent of their registered members ended up owning more than 25 percent of the land. Moreover, committee members ended up owning between 25 and 35 percent of the land that they were entrusted to subdivide.

    For example, the average size of the Enkaroni committee members’ parcels was 100 hectares, compared with an Enkaroni average of 36 hectares. Meto committee members received parcels that averaged 113 hectares, compared to a Meto average of 50 hectares. Nentanai committee parcels averaged 133 hectares, compared to a 72-hectare average for Nentanai. Committee parcels were frequently more than twice the average size of ordinary members’ parcels. Committee members allocated large parcels to themselves, their friends, and relatives. Wealthy individuals with large herds also received large parcels. Poor livestock herders and widows ended up with smaller parcels.

    Attempts were made to reject these allocations. In the Enkaroni group ranch, for instance, about 50 individuals, including widows, organized to challenge the committee’s skewed allocation. They approached the committee to renegotiate parcel sizes but were told that “the fingers on one hand are not equal,” so how did they expect everyone to get equal-sized parcels? This response, of course, violated the stated aim of creating equal-sized parcels in the subdivision.

    The complainants then approached local elders. The elders’ barazas or public meetings were unfruitful�?but then, the elders had a vested interest in the outcome. More importantly, elders did not have sufficient power to override committee decisions. The group of 50 then forwarded their complaints to officials in the Department of Lands Adjudication and Settlement and to the district officer in charge of the administrative unit under which the Enkaroni group ranch falls. But the government administration had adopted an attitude of noninterference in matters of group ranch subdivision. Many individuals believed that their appeals to government went unheeded because officials had been bribed.(1)

    As their final recourse to justice, the Enkaroni complainants appealed to the High Court. They demanded that land be allocated equally and that the subdivision be declared null and void and halted until their suit was heard.(2) The High Court judge dismissed their application. The judge ruled that the plaintiffs must provide evidence showing why it is wrong that they were allocated smaller land parcels than others, and that they must show beyond mere allegation that they had been given smaller portions of land than those given to others.(3) The complainants conceded defeat and did not reorganize to appeal the High Court’s ruling.

    Meto members chose to confront the committee on an individual basis. However, the committee was unresponsive and threatened to any complainant that his or her parcel would be withdrawn and allocated to other more deserving parties. Dissatisfied individuals in the Nentanai group ranch did not contest their committee’s allocation. Many of those affected were very poor and had shifted residence to urban areas.

    Quite clearly, well-connected individuals and powerful elites such as wealthy herders and the group ranch management committee will manipulate the privatization process to their advantage at the expense of less powerful and more vulnerable groups such as widows and poor livestock herders. Indeed, when such processes are embedded within an uninterested or unaccountable governance/administrative regime, an inequitable property assignment results. Cultural constraints that would ordinarily have limited individual self-interest are also severely undermined.

    Consequently, formal titling programs will not always benefit all potential beneficiaries because of the race to secure and concentrate gains. Similarly, over the long run the costs of competition�?for example, the time and effort spent in contesting distributional consequences�?may well outweigh the benefits anticipated under a formalized property regime.

    How can the outcomes of such transitions be improved? In the absence of trust among the primary rights holders, checks and balances may need to be specified from the outset. In the case of the Maasai group ranches, members and their committee should have specified acceptable minimum and maximum parcel sizes for possible allocation to each member. Variation within this specified range would have been justified by varying family size and wealth distribution.

    In Senegal, land of variable quality was subdivided fairly equitably among a heterogeneous community of customary users (Bloch 1993). Slightly larger land units were allocated to larger families, and each family was allocated land in both high and low productivity areas. But there was an important difference. An external, unbiased agent, the U.S. Agency for International Development, administered the allocation.

    1. Enkaroni Group Ranch Disputes File, Department of Land Adjudication, Kajiado District, Kenya, letter dated February 9, 1990 (unnamed author); Enkaroni Group Ranch Disputes File, Department of Land Adjudication, Kajiado District, Kenya, letter dated April 15, 1992 (unnamed authors).
    2. High Court of Kenya, Plaint, Civil Suit 3956, July 22, 1992.
    3. High Court of Kenya, Ruling, Civil Case 3956, July 31, 1992.

    Bloch, P. C. 1993. An Egalitarian Project in a Stratified Society: Who Ends Up with the Land? In Land in African Agrarian Systems, ed. T. J. Bassett and D. E. Crummey. Madison: University of Wisconsin Press, 222Ð43.
    De Soto, Hernando. 2000. The Mystery of Capital. New York: Basic Books.
    Galaty, J. G. 1999. Property in the Strict Sense of the Term: The Theory and Practical Rhetoric of Land Tenure in East Africa. ALARM Working Paper No. 4. Kampala, Uganda: Centre for Basic Research, August.
    Kenya, Republic of. 1968. The Land Adjudication Act. Chapter 284 of the Laws of Kenya. Nairobi: Government Printer.
    Mwangi, Esther. 2003. Institutional Change and Politics: The Transformation of Property Rights in Kenya’s Maasailand. Ph.D. dissertation, Indiana University.
    Rutten, M. M. E. M. 1992. Selling Wealth to Buy Poverty: The Process of the Individualization of Landownership Among the Maasai Pastoralists of Kajiado District, Kenya, 1890-1900. Nijmegen Studies in Development and Cultural Change, vol.10. Saarbrucken, Germany: Verlag Breitenbach.

    Esther Mwangi is a consultant with the Environmental Services Theme of the World Agroforestry Center based in Nairobi, Kenya.

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