Source: Ideas and Institutions Issue #8
Analysis
Understanding Land Policy Issues by Studying Land Litigation
Land is one of India’s least reformed factor markets, and the quantum of land litigation is often treated as an indicator of the underlying malaise with land policy. I too have pointed toward land litigation statistics in the past to problematize India’s land policies. In this essay, I argue that this attribution is incorrect based on available evidence. I argue specifically that the volume of land litigation by itself does not convey any useful information about the problems of land policy.
A DAKSH survey in 2018 found that two-thirds of civil disputes in India were related to immovable property. An overwhelming majority of those surveyed were poor and had low levels of education. This fact has been used as a call to action to change land laws and argue for a focus on land laws that give rise to litigation. This assertion is based on the premise that litigation adds to transaction costs in business and is a sign of underlying inefficiencies in the land market due to faulty land laws.
Understanding whether land litigation is caused by bad land policy is important for understanding how to improve India’s land markets. It would seem that the fact that two-thirds of litigation comprises property disputes is, in itself, a call for action to reform land laws.
However, one runs into immediate problems when trying to use this statistic for designing policy responses. How do we know how much extra litigation land laws cause, relative to other laws? If not two-thirds, what is the proportion of property cases Indian policy makers should aim at—half or one-third? Most importantly, how do we draw a causal connection between land-related litigation and land policies? It is possible that many other factors, which have nothing to do with land laws and policies, could be leading to land litigation.
The dominant paradigm for understanding such causal links rests on the arguments posited by the nineteenth-century sociologist Emile Durkheim. He posited that changing socioeconomic structures lead to changes in how legal institutions are created and used. This theory has been developed further by others over the years. Researchers have tried to test this theory empirically by studying the links between socioeconomic changes and trends in litigation.
Clark (1990) analyzes intra-country litigation trends in six civil law countries with a view to link them to socioeconomic changes within these trends. He finds a positive correlation between economic development and rising litigation within economically similar regions for all six countries. Munger (1988) reviews similar literature to state that even if increasing economic complexity does not by itself lead to litigation, studies have indicated that rapid changes lead to conflicts and a need for intervention through law.
This is also the theme of a study on the causes driving the rise of civil litigation in China. The researchers Bujakowski and Schmit (2022) study Chinese province-level data across more than two decades to understand the links between litigation and structural transformation. According to them, in the twenty-four years of study, the “proportion of China’s GDP generated from service sector activities increased from 34.5 percent to 51.6 percent, and the proportion of China’s workforce employed by private enterprises rose from 21.6 percent to 84.0 percent.” They find that privatization “can explain at least 15 percent of the growth in civil litigation rates” between 1993 and 2016, but they do not find a similar relationship between litigation rates and the change in the composition of GDP in the economy.
Others have sought to test the prevalence of societal norms on litigation rates. One study on Japan’s litigation increase in the 1990s sought to understand the reasons for the low litigation rates in Japan compared to the U.S. in the period prior to this. The study sought to test the dominant discourse that the Japanese had a greater preference for informal mechanisms of dispute resolution compared to the U.S. The study found the rapid increase in litigation in the 1990s attributable to “an increase in attorneys per capita”. The authors point out that starting in the 1990s, there was a conscious policy decision to expand the size of the bar, and the number of law graduates doubled by the year 2000, compared to 1991. The prefectures that added the most lawyers saw the highest increases in litigation. Second, reforms to civil procedure law in 1998 that reduced the costs of litigation, and the addition of judges also had a positive effect on litigation rates. They use these findings to make the case that institutional constraints, not cultural norms, were responsible for low litigation rates in Japan prior to the 1990s.
Sometimes, reforms in land governance systems may themselves cause an increase in litigation. This is the focus of a study in Benin that aims to understand the “consequences of formalizing land rights by focusing on the causal effects that different types of land rights institutions have on land-related litigation.” Data from Beninese rural villages indicates that the “formalization of land rights significantly increases the likelihood of land related litigation.” This is because the land titles awarded by the government remained incomplete in some respects, and title recipients sought to complete these by using courts as a complementary mechanism. The formalization of land rights increased the land’s value and reduced eviction, but also created a demand for perfecting the land title awarded by the government.
This brief review of research on the causes of litigation patterns highlights that land litigation in India could be due to several factors other than land laws and policies—structural transformations in the economy, modernization, and so on. Some litigation could also be a positive effect of improvements in land governance policies and institutions. Therefore, we should be careful in drawing a direct correlation or causal linkage between land laws and land-related litigation in the absence of better evidence. Immovable property is the most ubiquitous asset in an Indian household’s portfolio. It should not be surprising that a large volume of civil disputes in India pertain to immovable property, and neither does it by itself reflect a problem with land policy.
Another implication of this line of research is that an increase in litigation is not necessarily bad if it is symptomatic of positive transformations occurring in the economy. An increase in litigation becomes a problem only if courts cannot deal with them in a timely and affordable way. However, this is a courts problem, not a land policy problem.
The opposite inference has also been made—to argue that litigation is leading to inefficiencies in the land market. Again, we run into problems of demonstrating causation and correlation. How do we establish that, the optimum transaction cost for sale of land is X, and litigation increases the cost to X+Y? Second, to the extent that Indian courts are bad in general, how do we establish that land litigation is especially costly compared to all other litigation? In other words, the quality of the judicial system imposes a standard transaction cost on all disputes that end up in courts, not just the land-related ones. So, again, the problem is courts, not land policy, unless otherwise demonstrated.
This is not to say that studying court cases is not useful. Unpacking the nature of litigation can provide many useful indications to policy makers. For example, a study of Supreme Court cases on land acquisition done by Namita Wahi at the Center for Policy Research finds that procedural irregularities were an issue in one-third of the cases they studied. Devendra Damle and Karan Gulati have unpacked litigation in the Delhi High Court to find a much smaller proportion of cases pertaining to land than the DAKSH survey. Scholar Nick Robinson has empirically demonstrated that a disproportionate number of litigants who file cases in the Indian Supreme Court are based in and around Delhi, raising important questions of access. Common to these studies is the fact that they seek to study the underlying attributes of litigation rather than attribute causality on the basis of the litigation itself.
To further unpack land-related litigation and to determine whether such litigation poses a land-policy problem, we first need to:
- Establish reliable benchmarks of litigious behavior against which to measure land litigation rates.
- Measure land litigation rates in proportion to those owning land.
- Identify the causes of land litigation.
- Measure the costs of land litigation as compared to other litigation.
—By Anirudh Burman
Review
The Intellectual Odyssey of Albert Hirschman
Collective action in pursuit of the common good is among the most profound puzzles of social sciences. We see it in practice, but in theory, such action should be undermined by the “free rider problem”, as one can benefit from others’ efforts without incurring the costs. But what if the efforts do not feel like costs? What if there is, as Albert Hirschman put it, “a turning of what is normally sensed as a cost that is to be shirked into a benefit, a rewarding experience, and a ‘happiness of pursuit’ in which one simply must share”? Hirschman argued that successful movements achieve this fundamental mutation.
In his prodigious writings over six decades, Hirschman produced many such ideas and insights. His work has informed and inspired research in economics, political science, political theory, sociology, social psychology, history, and other areas. It is not easy to take a comprehensive view of such a fertile and eclectic mind without losing the thread. Michele Alacevich’s intellectual biography of Hirschman, which was published in 2021, achieves this feat.
A worthy companion to Jeremy Adelman’s wonderful biography of Hirschman, the book takes us on a journey from Hirschman’s formative years to his final years, focusing primarily on the development of his ideas. Alacevich finds in Hirschman’s contributions “an intellectual trajectory of startling imagination and profound coherence.” While those who have read Hirschman know the brilliance of his imagination, Alacevich brings out the coherence in his body of work.
While shedding light on the life experiences, persons, institutions, voluntary efforts, and other influences on his intellectual life, the book does not burden itself with explaining away the sources of ideas. It only suggests why Hirschman came to work on a problem and how he proceeded to work on it.
The book puts special emphasis on Hirschman’s formative years, growing up in an assimilated Jewish family, getting the best of the Gymnasium education—with its spirit of cosmopolitanism and tolerance, intellectual rigour, and a commitment to classical studies—being forced to leave due to the rise of Nazism, having the studies repeatedly disrupted by the “world”, and so on.
The book also pays attention to how Hirschman’s character and the choices he made shaped his intellectual life. He fought in the international brigades that supported the Spanish Republic, worked as a key problem solver in an illegal operation in France to help Jewish and leftist refugees flee Europe after the Blitzkrieg, served in the Office of Strategic Services (the predecessor of CIA) during the second world war, and lived and worked in Colombia with his family during La Violencia. Alacevich quotes Hirschman, “When I felt that there was the possibility of doing something I seized the opportunity.”
Hirschman’s distillation of experiences during the world war seems to have made him sceptical of simple ideologies and straightforward prescriptions. His brother-in-law Eugenio Colorni’s mentorship of Hirschman played a crucial role in this. As Hirschman put it, Colorni and his friends had set out to “prove Hamlet wrong: they were intent on showing that doubt could motivate action instead of undermining and enervating it.” This doubt and openness can be seen in his work and in the many debates Hirschman had with others. On most occasions, his responses were thoughtful. He was also open to updating his ideas based on new information. He tended to revise and improve upon his ideas for years after initial publication. He also had a propensity for “self-subversion”—providing the counterargument to his own arguments.
This openness went along with his commitment to reform. He disliked certainties of conservatives and revolutionaries. He had a progressive reformist outlook that focused on specific ideas and opportunities for improvements. These values underpinned his commitment to democratic dialogue and participation. As he wrote, “This sort of combination of participation in public affairs with intellectual openness seems to me the ideal micro-foundation of a democratic politics.” These values can be seen in Hirschman’s work on development. In the 1950s, he was an early dissenter against comprehensive planning. He found the technocratic emphasis on comprehensive planning to be simplistic and undemocratic.
His understanding of democratic processes also made him somewhat sanguine about social conflicts. His view was that conflicts in pluralistic market societies are often on issues for which a compromise can be found. This kind of conflict is likely to contribute to forming the community spirit that a democratic market society needs. Hirschman argued that trying to quiet down conflicts by invoking community spirit is like deploying a deus ex machina. He suggested: “What is actually required to make progress with the novel problems a society encounters on its road is political entrepreneurship, imagination, patience here, impatience there, and other varieties of virtù and fortuna.”
Perhaps because of these values, Hirschman was also sometimes critical of the role of intellectuals in democratic societies. Writing about the rise of authoritarian governments in Latin America following years of economic development, Hirschman argued that the intellectuals may have enabled this by exaggerating the scale and nature of the problems in the economy. As he put it: “…ideological escalation may well have contributed to that pervasive sense of being in a desperate predicament which is a precondition for radical regime change.”
Social theorists tend to emphasize certain aspects of reality while leaving others out. Hirschman was adept at harnessing the problems that arise from this polemical nature of social thought by illuminating, through his occasional dissents against prevailing orthodoxies, certain aspects of reality that were left out by a dominant theory. But, as Alacevich demonstrates, he was no contrarian. He dissented only when it seemed to him that what was being left out was necessary for successful social action. Alacevich’s book provides the context that is crucial to understand Hirschman’s dissents.
His ability to see important omissions in worldviews enabled Hirschman to synthesize different theories into more context-specific explanations. For instance, he argued that, depending on the context, different theories of the social effects of capitalism could co-exist. Commercial transactions can help develop norms of trust and reliability and a pervasive element of calculation and instrumental reason. So, Hirschman argued, the moral basis of capitalist society can be seen as “constantly depleted and replenished at the same time,” and the right balance is a movable and unstable target. Alacevich suggests that this indeterminacy was an important aspect of Hirschman’s analysis. He quotes Hirschman—“After so many failed prophecies, is it not in the interest of social science to embrace complexity, be it at some sacrifice of its claim to predictive power?”
This indeterminacy is also associated with Hirschman’s approach to history. He avoided deterministic arguments about path dependence. His reading of history showed him that major changes can happen unexpectedly. This tied in with his commitment for reform. He believed that reform is usually possible, even if it does not seem probable. This “possibilism” gave a special place to imagination and choice. In his first book, he quoted Paul Valery, “Peace is a virtual, mute, continuous victory of the possible forces over the probable appetites.”
Similarly, his brand of theorizing was, Alacevich writes, “not aimed at producing tight and imposing laws of social change, but at building middle-range models, abstract enough to isolate specific elements and show their explanatory potential, but not so particularistic as to abdicate their analytical role.” His theories are “interpretive lenses that can help us make sense of historical processes, but they need to be fed with historical material to be of any use. Contextualization is fundamental to using Hirschman’s analyses properly.” Hirschman insisted, for instance, that the two basic functions activated through a process of economic growth—an accumulation function that enables growth but unbalances society, and a reform function that moderates growth but rebalances social disequilibria through some redistribution—must be paced appropriately. This requires context-specific judgement, something that countries like China, India and South Africa have struggled with in recent years.
Right from his first book, Hirschman trespassed on disciplines and methodologies. But this was done well enough to attract serious engagement by scholars in the disciplines in which he was trespassing. Although he had excellent command over statistical methods, he preferred using case studies to draw out insights. He also often preferred analyzing the development of ideas endogenously, without due regard to exogenous factors. Due to these methodological preferences and because he often shared tentative ideas, some of his works came under criticism for being one-sided. His otherwise insightful books Development Projects Observed and The Rhetoric of Reaction were criticized for being too one-sided.
Cass Sunstein described Hirschman as a behavioural economist because of his work on the psychology of project design and management. Hirschman’s emphasis on the role of decisionmaking structures and his de-emphasis on the traditional bottlenecks relating to the factors of production also anticipated some of the explanations of new institutional economics. For instance, Douglass North’s emphasis on the adaptive efficiency of societies—“the ability to flexibly adjust in the face of shocks and evolve institutions that effectively deal with an altered “reality”—echoes Hirschman’s emphasis on decisionmaking as the key constraint for development.
Alacevich’s book does justice to Hirschman by bringing out the subtlety, complexity, and coherence of his thought and by critiquing his work wherever appropriate. The book is worth reading not just to understand Hirschman’s intellectual life but also for a reminder of many ideas and insights that continue to be relevant for those who seek to understand the world before trying to change it.
—By Suyash Rai