Land Titling and Microcredit in Cambodia: Examining the Reality of Hernando De Soto’s ‘Three Steps to Heaven’

Forthcoming in 'Critical Insights on Tenure Security in the Global South', a special issue of the journal LAND

37 Pages Posted: 21 Jun 2023

See all articles by Milford Bateman

Milford Bateman

Juraj Dobrila University of Pula (UNIPU); St Marys University, Halifax; UFF, Rio de Janeiro, Brazil

Date Written: February 1, 2023

Abstract

Starting with the work of Hernando de Soto in the 1980s, the role of land tenure soon took centre-stage in a neoliberal-oriented theory of change based on the possession and use of private individual land titles by the poor. One of the major mechanisms proposed by de Soto involved a three step process whereby the poor (1) “secured” their tenure with land titles, (2) used their newly-acquired land titles as collateral to leverage large amounts of microcredit to be used to establish a functioning microenterprise, and then (3) escaped from their poverty due to the jobs and income associated with founding and running a microenterprise, and the all round wealth creation in the community, that it was assumed would be automatically generated. This paper explores this specific ‘three steps to heaven’ theory of change proposed by de Soto, and thereafter taken on board with gusto by the major international development institutions, particularly the World Bank. With the largest microcredit sector in the world (on a per capita basis), a development that has been almost uniquely facilitated by the extensive use of land titles as collateral, Cambodia provides an ideal setting for testing this specific theory of change. The evidence to date, however, shows that after conferring some initial benefits on the poor in rural areas, the vastly expanded microcredit sector that began to emerge in the late 2010s appears to have played a quite deleterious role in the lives and communities of Cambodia’s poor. I conclude that De Soto's ‘three steps to heaven’ claims are highly problematic in practice and reflect a fundamental misreading of the real institutional drivers of sustainable local economic development and poverty reduction.

Keywords: land titling, De Soto, Cambodia, local economic development, microfinance, informal sector

Suggested Citation

Bateman, Milford, Land Titling and Microcredit in Cambodia: Examining the Reality of Hernando De Soto’s ‘Three Steps to Heaven’ (February 1, 2023). Forthcoming in 'Critical Insights on Tenure Security in the Global South', a special issue of the journal LAND, Available at SSRN: https://ssrn.com/abstract=4474085 or http://dx.doi.org/10.2139/ssrn.4474085

Milford Bateman (Contact Author)

Juraj Dobrila University of Pula (UNIPU) ( email )

Zagrebačka 30
Pula, 52100
Croatia

St Marys University, Halifax ( email )

Halifax, nova scotia
Canada

UFF, Rio de Janeiro, Brazil ( email )

Rio de Janeiro
Brazil

HOME PAGE: http://www.aai.uff.br/

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