Money Isn't Everything

"But," says a priest friend, "it's so darn close, it's hard to tell sometimes." Which is what came to mind as I read Austin Bay's piece on land reform in Iraq in this morning's WaTi. The column highlights the efforts of one Peter Schaeffer, a Vietnam vet and advisor to Hernando de Soto (our hero). Schaeffer says:
less than 5 percent of Iraq's cultivatable agricultural land is "freehold" (owned with clear title). Ninety-five percent of the cultivatable land in Iraq is therefore "dead" (illiquid) and cannot be used as security for a bank loan. "Iraqi farmers who lack clear title can't get [bank] loans," Mr. Schaefer said.
That limits economic creativity, particularly in a population demonstrably successful at small business operations. Mr. Schaeffer believes 95 percent of family homes in Iraq also lack clear, secure title.
Schaeffer thinks President Maliki should announce title reform and a mortgage program for banks today. The goal?
Property rights reform also provides a political tool for assuaging sectarian and ethnic fears among Iraqi citizens, Schaefer said. Good title "means Iraqis can protect their houses with the law on their side."
This is nation-building at a subtle but fundamental level: moving from the rule of the gun to rule of law. Consider the case of Sunni Arabs who have abandoned property in Shia Arab neighborhoods. "Anyone who loses a home, but has solid title, will have legal recourse to regain [lost property] through the courts," Mr. Schaefer said. The law becomes a nonviolent option preferable to gang or militia-inspired retribution.
Remember this? And for that matter Bush's speech on Latin America yesterday? Money may not be everything, but property rights almost are.