Poor to Gain from Bureaucracy

It may sound ludicrous and many of us hate it, yet, increased bureaucracy may be just what ‘the poor’ in developing parts of the world need. Presently, four billion (!) people live without an official address, which is actually a bigger problem than one may think.

Why you ask? Well one reason is that, because without an address, some taxes cannot be collected and, while this sounds great to many, it also inhibits a country from raising the required revenue to develop essential services, such as its infrastructure, education and, healthcare amenities.

Perhaps an even greater problem arising from the lack of bureaucracy is the lack of property rights and the consequent effects this has on people’s behaviour. The World Bank actually conducted an experiment on land ownership in Benin, and found that farmers that were able to register their land, compared to those that couldn’t, didn’t only invest more into their land, but also invested into longer term projects/crops such as palm oil trees. They also found that they had to spend less time guarding their land which allowed them to focus on ‘other’ (a.k.a. more important) tasks, such as generating additional income.

Development organisations largely acknowledge these findings and are increasingly focused on deploying capacity building initiatives, such as providing accounting and IT related courses. That said, capacity building programs have attracted critique as well as you can see in this ”Vocational Bridges to Nowhere” article. 



 

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Poor to Gain from Bureaucracy

by Rogier H.C.M. Want time to read: 1 min
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