Abstract
This study examines the nature and causes of the evolution of property rights, with particular emphasis on the role of market forces in shaping its outcome. Using the Nigerian Land Use Act as the platform, it constructs an evolutionary theory of property rights assignment that recognizes the role of cultural and political forces, while giving primacy to economic considerations. It concludes that the behavior of Nigerian landowners to the regulatory shock is consistent with rational economic considerations but inconsistent with the expectations of the confiscatory legislation. The study employs data on landowners’ applications for the formalization of existing property rights to the new ‘Right of Occupancy’ over the first 15 years of implementation. The test of the landowner response to this requirement concludes that landowners are holding back on statutory formalization of their property rights as a rational response to the legislation.
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Notes
- 1.
See Cooter and Ulen (2004), Chapter 4 on “An Economic Theory of Property”
- 2.
See Earle (2000) p. 44
- 3.
Op cit. pp. 46–48. Along the same lines, Cooter and Ulen (2004, p. 74) also referenced an African tribe called Barotse for which it was said that “Property law defined not so much the rights of persons over things as the obligation owed between persons in respect of things.”
- 4.
Nigeria is the most populous African country with a population of 140 million according to its latest census (2006) and has a land area of 924,717 square kilometers (357,000 square miles.) According to the UN-Habitat Organization, 45% of its population is urbanized. It runs a mixed capitalist economy more in the tradition of state capitalism. For an exposition of the indigenous property rights framework that predated the Land Use Act, see Elias (1961) and Ola (1977). For a full version of the LUA, see Federal Republic of Nigeria (1989).
- 5.
This position is espoused by Garrett, Jr. [8] who proposed that “An analysis of land use involves an understanding of economic concepts, while the implementation of land use policies occur through the political process that is guided by the judiciary. An analysis of land use therefore must incorporate economics, public policy and court rulings.”
- 6.
Positive Economics deals with the analysis of statements of cause and effect. Such statements can be confirmed or refuted by appeal to real-world observations. This is contrasted with normative economic analysis which deals with ‘statements that embody value judgments’ which cannot be confirmed by appealing to data but only by reference to one’s ethical views. (See Katz, 1994, p. 7.)
- 7.
Allodial interest in land is an ownership right that is absolute and may not be expropriated by any sovereign or other power. It is also not subject to any encumbrance.
- 8.
“Who Owns the Land?”, Editorial, Nigerian Online Today, May 9, 2007.
- 9.
In this way, the transformation of Western societies particularly as may be gleaned from epochs of economic growth and technological progress, provide some paths to possible maturity in the evolutionary process.
- 10.
Some estimate this proportion to be 22%.
- 11.
United Nation Habitat Organization estimated its 2000 population to be 13.4 million being the 6th largest globally at the time. The organization’s projection of its 2015 population is 23.2 million or third largest behind Tokyo and Bombay.
- 12.
These discrepancies for the ‘Private’ Applications were as follows:
Year
Exhibit 3
Exhibit 2
Discrepancy
1987
1251
1814
–31.04%
1988
1151
1147
0.35%
1989
1709
1748
–2.22%
1990
1620
1624
–0.25%
The on-site tally tended to be lower than the official tally. Only the 1987 discrepancy, 31%, is particularly large.
- 13.
The size of the land involved in each transaction could only be determined by cross-referencing the transaction counts from the land registry with survey maps at the Survey Division and the land use maps from the Physical Planning Division, all of which were at different geographical locations. Time, cost and the logistical friction made this exercise unfeasible at the time of the fieldwork.
- 14.
See Iwarere (1994) pp. 255–56.
- 15.
The Lagos State New Towns Development Authority’s list of priority schemes at the time of this study (1996) consisted of 13,816 plots on 6,258 hectares. This gives an average of 0.45 acres per plot. The first set of planned non-agricultural development schemes on Lekki Peninsula in 1985 was for 9,696 plots on 2,844 hectares or 0.29 hectares per plot.
- 16.
Total land area is 357,700 hectares of which 17–22% are estimated to be under water. This leaves 279,000–296,000 hectares, less institutional land not in private hands. The proportion converted could be higher than 10% depending upon the share of institutional land in total developable land.
- 17.
See Braimoh (2006, 2007).
- 18.
See Olayiwola (2005), Page 187.
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Acknowledgement
The author will like to thank two anonymous referees and Dr. Robert A. Simons for their very helpful suggestions. The same goes for the following individuals for their assistance during the author’s field work: Mrs Ngozi Okonkwo and her senior staff at the Lands Division; and Dr Femi Obatomi, Director of Planning and Statistics, all of the former Nigerian Federal Ministry of Works and Housing; Mr. J. A. Adediran of Lagos State New Towns Development Authority, and Dr. Henry Taiwo Iwarere of Ekiti State University, Ado Ekiti. Grants support by Howard University Faculty Research Program in Social Sciences, Humanities, and Education is gratefully acknowledged. The views expressed do not necessarily represent those of these individuals and institutions.
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Iwarere, L.J. (2008). Property Rights and Land Market Dynamics: An Economic Interpretation of the Indigenous Land Tenure Transformation Process in Nigeria. In: Simons, R.A., Malmgren, R., Small, G. (eds) Indigenous Peoples and Real Estate Valuation. Research Issues in Real Estate, vol 10. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-77938-6_10
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