Download the file - United Nations Rule of Law

and insurance — to facilitate transactions andimprove economic outcomes. Land, housesand moveable property can thus be leveraged,and assets transformed from static investmentsinto capital which can be bought andsold. However, property rights are a necessarybut not sufficient precondition for the developmentof these financial mechanisms; theyalso develop through partnership between themarket, special funds targeted at access tofinance, and the state.4) As an instrument of social policy. In the absenceor failure of the market, the state oftenplays a direct role in addressing the needs ofthe poor. The state has at its disposal instrumentsthat can be used to endow its citizenswith assets as they relate to property, suchas public housing, low interest loans and thedistribution of state land. Such instrumentshelp to overcome natural competition for assets.The state also supports social cohesionthrough the development of co-ownership ofinfrastructure and services by government andthe citizen, supporting the equilibrium betweenindividual and collective interests. Provisionof infrastructure by the state criticallyaffects the value and desirability of assets,and can therefore fundamentally affect opportunitiesfor the poor.Dysfunctionalities in PropertyManagementThese four key building blocks can be viewed as acoherent framework through which to understandproperty rights. It follows that analysis of theseblocks allows us to identify where dysfunctionalitiesin property management might arise andwhere there are disconnects within key elementsof this framework. As far as the poor are concerned,they have trouble getting property in thefirst place (unfairly limited access). Where theyhave assets, their rights are often not adequatelyrecognised, or enforced, or given full backing ofthe law, and are consequently vulnerable to beinglost. Unfairly limited access to property and insecurityof assets are caused by dysfunctionalitiesin the property system that can be understoodfourfold:1) Misalignment of social practice and legalprovision. Social practice and law reinforceeach other when aligned towards commonobjectives, but when misaligned can underminestate legitimacy and accountability andweaken ties of citizenship. Law must evolveorganically to suit the context in which it is tobe applied and should not be perceived as theinstrument through which a minority imposesits power. Legal aspects of property systemsmust grow from land practices on the groundand incorporate customary interactions andnetworks. There have been two common sourcesof misalignment. Firstly, some states, particularlyduring the colonial period, imposedproperty systems on vast tracts of land thatwere previously regulated through customaryregimes of rights and obligations. The resultwas a major gap between daily practices of thepeople and requirements of formal law. Secondly,in urban areas, as de Soto has pointedout, ill-conceived laws have forced millions ofpeople into informality, as gaining access toland for housing is a lengthy process, measuredin terms of years if not decades. 162) Misuse of rules governing property. While rulesfor property systems may be both appropriateand equitable, they may still be open toabuse by those in power. Rules are resourcesthat can be subverted to serve the interests ofthe few, through corruption and lack of transparency,rather than acting as a framework67