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To demonstrate this, let us first look at what inclusive institutions look like, and as this short essay is concerned with economic institutions, that will be the focus. For an economy or economic institutions to be deemed inclusive, two conditions must be satisfied. The first is that everyone within the responsible population has access to participate (Acemoglu & Robinson, 2012, p. 74). Section 71 of the Zimbabwean constitution subsection (2) states that every person has the right to acquire and deal* with all forms of property (p. 35). This extension of ownership, trade and investment to every person is a development towards inclusivity, contrary to the time in colonial history where not every person in the country was permitted to own land and connected properties. The first condition of inclusivity is met here. However, Section 71 of the constitution is subject to Section 72, which states that despite this widespread access to property, the state has authority to “compulsorily acquire” agricultural land (p. 36). Moreover, other property that is not agricultural is subject to Section 71 subsection (3), which states that “no person may be deprived of their property except…”. This clause introduces the second condition of inclusive economic institutions: that each individual’s property is protected by law from mandatory acquisition (Acemoglu & Robinson, 2012, pp. 75-76). Such an institution of protection is referred to as property rights (Acemoglu & Robinson, 2012). The condition of property rights is tragically flouted in Zimbabwe. What follows “except” in Section 71(3) of the constitution is a list of conditions that gives the state legal space to use any reason to acquire land and a rule that the court of law cannot be engaged in defence of one’s property, only in appeal after acquisition to attempt to get the property back.
Not only can the state take what it wants when it wants, it cannot be opposed in doing so. One must surrender. Even if the court does not grant the initial acquisition, “the law entitles any person whose property has been acquired to apply to a competent court for the prompt return of the property” (Section 71(3)(d), Constitution of Zimbabwe). The constitution of Zimbabwe allows property to be seized by the government even if the court rules against it. The property cannot be protected, only (wishfully and often unsuccessfully) “returned”. So yes, every Zimbabwean can own property in Zimbabwe, only up until somebody in the government decides otherwise. Zimbabwe’s economic institutions are extractive.
Why are a lack of property rights a tragedy? Acemoglu & Robinson published an aptly titled book, Why Nations Fail (WNF) in 2012. WNF is a historical institutionalist perspective on development. The authors present a path dependent study of institutions and their effect on development. Histories, critical junctures and other events are selected over hundreds of years at varying intervals, and their social and governmental impacts explored. The result is the discovery that institutions matter, particularly political and economic institutions directly influence development, and the nature of these institutions is path dependent. Further, political and economic institutions are in a constant feedback loop; inclusivity breeds more inclusivity in a process referred to as the virtuous circle and extractive institutions continuously descend into more extraction in a process referred to as the vicious circle. Nations fail when their political institutions are extractive because they create extractive economic institutions. What results is the systematic draining of wealth from the many by the few, hindering the possibility of widespread prosperity. On the other hand, nations succeed when they establish and operate through inclusive political institutions because these result in inclusive economic institutions which equally incorporate all individuals’ pursuit of well-being and thus a nation can prosper. Zimbabwe’s dance in the vicious circle cannot be broken unless the institutions change toward inclusivity.
Property rights are a tangible and effective step toward this inclusivity. Secure property rights are central to inclusive institutions and thus central to economic activity, productivity growth and economic prosperity (Acemoglu & Robinson, p. 75). It all boils down to two principles that property rights inherently uphold: incentive and leverage. Property rights ensure long-term ownership by legal and constitutional protection of that ownership and that creates incentive and leverage (Demsetz, 1994; Ichardson, 2015; Richardson, 2005). Without assurance that the property cannot be arbitrarily lost, an owner has little incentive to invest in it. Without investment, there are less returns, less job creation, and no sustainable economic growth. Without property rights it is more difficult to access loans from the bank as capital to invest because the bank would not accept a property that you might not still own tomorrow as leverage. Without a loan from the bank some cannot invest. Without investment … can you see the picture? Moreover, property rights have been credited with positively influencing other aspects of economic growth. Gwenhamo (2012) undertook an empirical investigation that uncovered a positive impact of property rights on foreign direct investment (FDI) in Zimbabwe (Gwenhamo et al., 2012). Richardson (2005) asserted that property rights encourage investor trust, increases land equity and boosts entrepreneurial knowledge and incentives (Richardson, 2005) In addition, property rights stimulate sustainable use of natural resources and conservation (Richardson, 2005).
Let this work not be misleading, property rights are not the single answer to Zimbabwe’s current deteriorating state. Acemoglu & Robinson demonstrate that the relationship between property rights and economic growth is not exclusive. Similarly, Richardson (2005) phrases it as a non-linear relationship. Jens Anderson (2007), in response to Richardson’s (2005) research, puts it more blatantly by asserting that an understanding of property rights as the sole influence on issues of economic growth and prosperity is reductionist thinking (Andersson, 2007). The purpose of this essay is not to claim property rights as the saving grace of Zimbabwe. It is simply to show that ‘salvation’ is not possible without them. Land ownership in Zimbabwe has undergone four major defining voices in regards to ownership throughout recent history: the Land Apportionment Act of 1930, the Land Husbandry Act in 1951, and the Land Tenure act in 1969. None of these acts have been completely inclusive. Some were oppressive in that they stepped on the access of one group of people, yet protected the ownership of another. Some allowed access to all but denied protected ownership. Earth’s most lucrative asset, the land itself, is fruitful in Zimbabwe yet has been tossed around in a vicious circle of extraction. History of property, absence of rights. We need to stop the music and unlearn the dance. The constitution of Zimbabwe needs to include true and secure property rights – no more get-out clauses.
References
Acemoglu, Daron, & Robinson, James A. (2012). Why Nations Fail. London: Profile Books.
Andersson, J. A. (2007). How much did property rights matter? Understanding Food insecurity in Zimbabwe: A critique of Richardson. African Affairs, 106(425), 681–690. https://doi.org/10.1093/afraf/adm064
Demsetz, H. (1994). Toward a theory of Property Rights. Economic Affairs, 14(4), 55–55. https://doi.org/10.1111/j.1468-0270.1994.tb00220.x
Gwenhamo, F., Fedderke, J. W., & de Kadt, R. (2012). Measuring institutions: Indicators of political rights, property rights and political instability in Zimbabwe. Journal of Peace Research, 49(4), 593–603. https://doi.org/10.1177/0022343311434326
Ichardson, C. R. J. R. (2015). Is This North Carolina or Zimbabwe? 80, 587–605.
Richardson, C. J. (2005). The loss of property rights and the collapse of Zimbabwe. Cato Journal, 25(3), 541–566.