(Photo: WFP/Praveen Agrawal)
This article originally appeared on the TrustLaw blog.
Natural disasters affect millions of lives each year and bring humanity together around a common goal of helping the victims and supporting reconstruction. The Asian tsunami of 2004, the 2010 earthquake in Haiti, or the deadly foods in Pakistan later that year are just a few examples of tragic events that triggered the outpouring of donations to relief efforts. Yet, all too often this well-intended generosity fails to translate into commensurate results on the ground.
One reason is the sheer volume of aid that tends to overwhelm the absorptive capacity of governments, aid agencies, and non-governmental organizations (NGOs). Another key reason is corruption caused by the urgency to disburse aid that often leads to dangerous corner cutting when it comes to controls on spending and accountability.
The need to tackle corruption in disaster aid has been brought into focus again by the destruction wrecked by typhoon Haiyan, or Yolanda as it is known in the Philippines. In response, so far nearly 18 billion pesos ($414 million) in cash and relief goods have been pledged. The challenge of administering this magnitude of aid creates considerable corruption risks.
As we celebrate the Global Entrepreneurship Week, we are reminded time and again that making entrepreneurship work takes an entire ecosystem of supporting factors. CIPE’s recent report, “Creating the Environment for Entrepreneurial Success,” highlighted the complexities involved and focused on many elements needed for entrepreneurs to succeed. Property rights and institutions that create healthy property markets are among such crucial elements of building vibrant entrepreneurship ecosystems.
Property rights are key building blocks of modern market economies. They are also a fundamental human right, enshrined in Article 17 of the United Nations Universal Declaration of Human Rights, which states that:
- (1) Everyone has the right to own property alone as well as in association with others.
- (2) No one shall be arbitrarily deprived of his property.
These simple statements seem self-evident. Yet, it takes a multitude of intertwined and interacting laws, rules, and institutions to ensure that property rights are accessible to all members of the society and adequately protected so that they can become equal stakeholders in their country’s future.
The International Property Markets Scorecard, a tool jointly developed by the Center for International Private Enterprise (CIPE) and the International Real Property Foundation (IRPF), takes such a holistic view of property rights in their broader context. The Scorecard maps the institutional components of property markets and evaluates their effectiveness, providing a methodology to investigate the six core elements necessary for sustainable property market development:
- property rights laws and enforcement,
- access to credit,
- efficiency of governance,
- rational dispute resolution,
- financial transparency,
- appropriate regulations.
The Scorecard is a tool for in-country reformers, international policy advisors, and market analysts as it provides comprehensive snapshots of market conditions, identifying key areas for reform as well as market risks. CIPE and IRPF have been using this methodology to conduct research and support local partners’ advocacy efforts over the last few years in countries ranging from Armenia to the Philippines. Today we finally brought all the findings together under the newly launched International Property Markets Scorecard website, www.propertymarketsscorecard.com.
“We’re approaching the end of a bloody century plagued by a terrible political invention — totalitarianism. Optimism comes less easily today, not because democracy is less vigorous, but because democracy’s enemies have refined their instruments of repression. Yet optimism is in order, because day by day democracy is proving itself to be a not-at-all-fragile flower. (…) No, democracy is not a fragile flower. Still it needs cultivating. If the rest of this century is to witness the gradual growth of freedom and democratic ideals, we must take actions to assist the campaign for democracy.”
Although these words were spoken more than three decades ago by President Ronald Reagan at the address to the British Parliament delivered on June 8, 1982, they still ring true today. While the threat of communism has since waned, new challenges to democratic freedoms abound. In the Westminster speech, Reagan pledged to boost support for democracy, and a year later the U.S. Congress created the National Endowment for Democracy (NED) – a private, nonprofit foundation dedicated to the growth and strengthening of democratic institutions around the world through its four core institutes including the Center for International Private Enterprise (CIPE). The role of the NED in today’s struggles for greater freedom for all remains no less crucial.
Yesterday, the NED celebrated its 30 anniversary at a ceremony appropriately hosted at the place where founding documents of America’s own democracy reside: the National Archives. In a strong statement of bipartisan support for the work of the NED and its institutes, both Speaker of the U.S. House of Representatives John Boehner and Minority Leader of the House Nancy Pelosi spoke at the event. Their remarks were followed by a distinguished panel moderated by George Stephanopoulos.
I’m not a devoted fan of Rush. My husband, on the other hand, has all the Rush lyrics memorized and he recently pointed out a song that stuck with me called Heresy. The song appears on Rush’s 1991 album Roll the Bones and talks about the fall of communism in Central and Eastern Europe – something I experienced first hand in Poland.
The song’s opening evokes familiar images from a quarter century ago of the unthinkable becoming real: the Berlin Wall coming down…
“All around that dull grey world
From Moscow to Berlin
People storm the barricades
Walls go tumbling in”
But the song doesn’t dwell on that dramatic moment of euphoria. Instead, the mood shifts quickly to palpable anger over decades of oppression, poverty, and life in fear that spanned both sides of the Iron Curtain due to the ever-present nuclear threat.
Here is how Rush’s lyricist Neil Peart explained his reasons behind writing the song, “The deconstruction of the Eastern Bloc made some people happy. It made me mad. (…) it was all a mistake? A heavy price to pay for somebody else’s misguided ideology, it seems to me, and that waste of life must be the ultimate heresy.”
OpenCorporates, a UK-based enterprise founded by Chris Taggart and Rob McKinnon, was created with a simple yet ambitious goal in mind: to have a web page for every company in the world. How would one go about it? OpenCorporates started with taking a closer look at the basic source of information on companies registered in any given country – that country’s corporate registry.
While in principle corporate registries are a part of the official public record and should be easily accessible to the public, in practice that is not always the case. Some countries have registries that are non-searchable or very difficult to search; some require registration and/or payment to search the registry; some carry a licence that explicitly prohibits the reuse of data. The quality and depth of available data also varies. Some registries are incomplete and out of date. Many provide only very basic information that contains no statutory filings or information about directors and significant shareholders, which does not allow for establishing beneficial ownership.
OpenCorporates, with support from The World Bank Institute through its Open and Collaborative Private Sector initiative, set out to change that through establishing the Open Company Data Index. The idea came out of the Open Government Partnership meeting in Brasilia in 2012 and OpenCorporates has since explored over 100 registers to score the access to data and the ability to reuse that data for over 70 countries around the world. Chris Taggart and WBI’s Benjamin Herzberg explained how the index works and why it is important at a lively event on Monday at the OpenGovHub in Washington, DC.
The United Nations recently published a report of the High-Level Panel on the post-2015 development agenda. The 27-member panel is composed of leaders from civil society, the private sector, and government – including Betty Maina, the Chief Executive of the Kenya Association of Manufacturers (KAM), one of the country’s leading business associations and a long-time CIPE partner.
The panel’s finding were based on extensive consultations with more than 5,000 civil society organizations in about 120 countries and CEOs of 250 companies in 30 countries with annual revenues exceeding $8 trillion, as well as academics from developed and developing countries, international and local NGOs, and parliamentarians.
The report concludes that the post-2015 agenda for the international community to agree upon before the expiry of the Millennium Development Goals (MDGs) needs to be driven by five big, transformative shifts:
- Leave No One Behind
- Put Sustainable Development at the Core
- Transform Economies for Jobs and Inclusive Growth
- Build Peace and Effective, Open and Accountable Public Institutions
- Forge a new Global Partnership
In a recent blog post, Karol Boudreaux, Director for Investments at the Omidyar Network, references this report and rightfully notes that property rights are key to achieving MDGs – in particular the first two: ending poverty and empowering girls and women – and therefore crucial to the success of these larger post-2015 goals as well. She says, “new attention is focused on encouraging bottom-up, participatory efforts that recognize and formalize the legitimate rights that individuals (including women and girls), communities and businesses hold to a variety of resources.” That matters tremendously because the poor – both informal urban entrepreneurs and small farmers – are the largest group of business people in the world.
A steady stream of rural workers coming into urban areas has fueled China’s rapid economic rise. Yet, these migrants remain constrained in their upward social mobility by the household registration system – hukou – that assigns an individual residency status as either “rural” or “urban” and is very hard to change. As a result, some 260 million migrants – or about 20 percent of the country’s population – live as second-class citizens in their adopted cities. In the biggest cities, as much as 40 percent of the population does not have the city hukou.
In the 1950s, the Communist Party started using the ages-old hukou family tracking system to restrict population movement. The intent was to spur industrialization through the “iron rice bowl” deal: urban workers were compensated for low wages by the promise of lifetime employment, health care, pension, and education for their children. For the system to work, rural workers had to be kept on farms to supply cities with cheap food.
Many now recognize hukou as unjust and an obstacle to China’s further development, and the government is contemplating reform. For the time being migrant workers still lack the status of permanent urban residents and the access to public services that city residents enjoy. This, in turn, makes just paying rent a struggle and creates high demand for affordable housing.
Enterprising farmers on the outskirts of fast-growing cities took notice. They started renting or selling their houses to migrants and building new ones. In some cases the entire villages invested in such developments – which include not just housing but also small factories, shops, and hotels. The owners received certificates of “ownership” (actually a limited land use right that can’t be sold, inherited, or mortgaged) recognized by their rural collectives. But when cities expand, these so-called “small titles” have no outside legal standing. The owners are supposed to be fairly compensated for expropriation but that rarely happens given the incentive structure: city governments have a monopoly on buying rural land and converting it into urban land by reselling to commercial property developers at a considerable financial gain.
The central and city governments maintain that construction and sale of “small title” properties are illegal. Yet for decades they were tolerated or even encouraged by local governments to facilitate their land take as “sideline payments” or accommodate migrant workers or lower-income city residents. Once urban land prices exploded, and following the 1994 fiscal reform that centralized fiscal revenue and put more pressure to raise revenue on local governments, the incentives changed. Not surprisingly, though, the central government’s efforts to remove “small title” properties and re-develop the land are encountering strong local resistance. In fact, conflict over land accounts for 65 percent of the more than 180,000 mass protests occurring in China annually.