Fighting rural poverty, inequality and low productivity through legal empowerment of the poor

Abstract

The purpose of this essay is to introduce the work of the Commission on Legal Empowerment of the Poor (CLEP) to the broader academic community interested in the challenge of eradicating rural poverty and promoting the structural and institutional changes which underpin such a challenge. While rural development research in the past has included work on several components of the legal empowerment of the poor (LEP) agenda such as property and labour rights, much less attention has been given to the other two pillars of the framework – access to justice and rule of law and business rights – which together constitute the four pillars of LEP. However the real difference and value added is the power of the systemic interaction among the pillars and the empowerment approach to change. In this approach, change is initiated bottom up with legal identity, organisations, information, and voice of the poor. In other words an active citizenry, complemented by a democratic and effective state. None of this happens naturally as vested interests and skewed power and asset relationships are bound to get in the way of change to greater equity. Such change is only likely to come through iterative contestations between organisations of the poor, the middle class, and the state. This approach is not presented as a panacea but one which will hopefully complement and accelerate what is already working.

Keywords:

• legal empowerment
• CLEP
• land governance
• rural livelihoods

Notes

¹The establishment of a commission on legal empowerment of the poor was inspired by the ideas of Hernando de Soto, which were attracting global attention but remained controversial. Several countries from North and South, led by Norway, agreed to set up the commission for an independent global examination of these ideas with recommendations for possible action by donors and others. Hernando de Soto and Madeleine Albright were appointed co-chairs. With the blessing of UN Secretary General Kofi Annan, it was agreed that UNDP would host the secretariat of the commission.

²Institute of Social Studies (ISS), the Hague.

³In studies conducted on the ground in 20 countries since 1998 at the request of the governments of Guatemala, Bolivia, Panama, Honduras, Argentina, Mexico, Haiti, Dominican Republic, El Salvador, Ecuador, Colombia, Peru, Tanzania, Egypt, Albania, the Philippines, Ethiopia, Georgia, Ghana, and Pakistan, the Institute for Liberty and Democracy (ILD) conservatively estimated that between 70 percent and 90 percent of the urban and rural population were extralegal. Applying these results to 179 developing and former Soviet nations, according to the degree of development of their institutional framework, it was found that 85 percent of the population lived in extralegal areas. Given a population of 4.9 billion in these 179 countries, it was concluded that at least 4.1 billion live in extralegal areas.

Studies by a number of other organisations confirm this figure. The International Labour Organisation, in the 2002 edition of Key Indicators of the Labour Market estimated that ‘more than 70% of the workforce in developing countries operates in the informal economy’. Taking into account the dependents of these workers, this means that at least 4.3 billion people in these countries rely on informal activities for their day-to-day subsistence. The World Bank Institute (WBI), using conventional definitions of under-employment and poverty, has come up with similar estimates. WBI organised the ‘Inclusive and Sustainable Business: Opening Markets to the Poor’ programme, with the objective of supporting strategies designed by private executives and public-sector leaders for creating opportunities ‘for the world's four billion poor people’.

The ILD estimate has become an international standard, for example, a study supported by the Inter-American Development Bank, the International Finance Corporation, the World Bank Group, Microsoft, and the Shell Foundation, and A. Hammond's subsequent book The next 4 billion: market size and business strategy at the base of the pyramid (March 2007).

⁴‘Business rights’ need not yet be regarded as a new term in law, but rather as derived from existing rights related to doing business of the individual, newly bundled together under this term on the basis of their vital instrumentality in the livelihoods of the poor.