Female ownership of land is not a panacea in developing countries

By Ralitza Dimova

            Contrary to conventional wisdom, giving ownership rights on land to women may not be a welfare enhancing panacea in poor agricultural settings. When women have less access to complementary resources such as credit, labour or marketing channels than men, female ownership of land alone would not help them enter into productivity enhancing agricultural sectors and generate income in such sectors. If women control land, while men control all remaining resources – and asset ownership is insecure in an environment of market and institutional imperfections – the outcome for the household as a whole is likely to be negative.

These are the key findings of a new publication by Ralitza Dimova, Sumon Bhaumik and Ira Gang in the Journal of Development Studies. We find that in matrilineal societies in Malawi, where user and control rights over land are in the hands of women:

  • Cultivation of high value crops increases household welfare.
  • The likelihood of high value crop cultivation by households increases with the extent of land owned by men.
  • Income generated from high value crop production decreases with the amount of land owned by women.

High value crops and entitlement failure

In the context of agriculture-based less-developed economies it has long been argued that movement out of subsistence farming into commercial (or high value crop) production is a promising way out of poverty, and that establishing secure property rights on land is an important ingredient in this transition. Prioritising the allocation of land to women has been seen as an important ingredient in policy agendas, aimed at enhancing household welfare though female economic empowerment.

Even as gender sensitive asset allocation policies are pursued, it is well understood that there is widespread entitlement failure, which makes it difficult to translate capabilities and asset ownership into higher earnings. A specific example of such entitlement failure is the inability of households to participate in the production of high value crops, which could increase their income and hence their welfare. This form of entitlement failure is especially acute among women, either due to the absence of customary or formal rights on land, or due to difficulties in enforcing such rights on land as a result of a complex set of economic, social or cultural factors.

Resource ownership in Malawi

We conducted a study of rural Malawi where high value crops, such as tobacco and groundnuts, have been considered to be welfare enhancing. The Malawian rural landscape is particularly interesting because it is characterised by patrilineal and matrilineal land tenure systems. Matrilineal kinship places ownership and control rights on land in the hands of women and provides women with a degree of economic security. However, this economic security can be challenged (for instance, by maternal uncles) and is not matched by complementary resources, such as access to capital and hired labour. We hypothesised in our study that uncertain property rights may reduce households’ willingness to invest in cash crops, while paucity of complementary resources is likely to be a barrier to generating income from high value agriculture in matrilineal societies.

Table 1: Ethnic groups in Malawi, based on Census data

Ethnic group Persons % Classification referred to by Berge et al (2003)
Chewa 4252204 32.6 Matrilineal
Lomwe 2288285 17.6 Matrilineal
Yao 1760843 13.5 Matrilineal
Ngoni 1492850 11.5 Matrilineal
Tumbuka 1152017 8.8 Patrilineal
Njanja 754410 5.8 Matrilineal
Sena 467958 3.6 Patrilineal
Tonga 270833 2.1 Patrilineal
Ngonde (Nkhonde) 129914 1.0 Patrilineal
Lambya 59452 0.5 Patrilineal
Senga 24366 0.2
Nyakyusa 18751 0.1 Patrilineal
Other 357615 2.7
Total 13029498

Source: Berge, E. et al (2003). Lineage and land reforms in Malawi. Norwegian Centre for Land Tenure Studies.

Female land ownership: is it a panacea?

Using rich representative data from Malawi, our paper explores the effect of land owned by men and women on the probability for the household to enter the higher value cash crop sector and the actual income generated in that sector. We make a distinction between:

  • social norm driven land tenure, proxied by whether the household belongs to a matrilineal or a patrilineal kinship group.
  • the actual amount of land operated by either men or women in each of these two communities.

The paper then explores the implications of cash crop adoption and cash crop income on household welfare. The results indicate that although cash crop production unquestionably enhances household welfare and reduces the probability of the household to be poor, female land ownership is not a panacea. Not only does de facto male ownership of land enhance the probability of the household to enter the cash crop sector, especially in the context of matrilineal societies, but also land ownership by women reduces the income generated from cash crop production. We explain this finding with the absence of complementary resources, such as access to capital and hired labour by women. In other words, while women’s ownership of assets (such as land) may be a necessary condition for both female empowerment and enhanced household welfare, on its own it cannot guarantee either of these objectives.

The policy implication is that female ownership of assets cannot be approached in a piecemeal manner. A wider and more holistic approach needs to be adopted. In particular, should asset ownership by women be pursued as a policy agenda, it needs to be complemented with a pursuit of better access of women to capital, hired labour and marketing channels. For the reform to be successful, it would also be important to assure that social norms are well aligned with enhanced female empowerment.

Improving labour conditions in the computer industry

by Khalid Nadvi and Gale Raj-Reichert

Many leading global brands, like Apple and Hewlett-Packard, source components from, and have their products manufactured by, a variety of independent suppliers. These suppliers undertake production in many locations across the world in vast global value chains. Ensuring that these suppliers meet international standards on labour, health and safety and environmental impacts is an increasing challenge for the global brands in the computer industry. These pressures are often accentuated by campaigning non-governmental organisations (NGOs), trade unions seeking to ensure better working conditions, and by governments keen to enforce public regulations. There has been substantial progress by the leading brands to engage with their first tier suppliers on such concerns. However, little is known about how labor standards and codes of conduct are addressed by second tier suppliers found at the lower tiers of global value chains, where the governance of labour conditions can be extremely challenging. Are private or public measures more successful in reaching suppliers down the global value chain? This question is addressed in a recent paper by Dr Khalid Nadvi and Dr Gale Raj-Reichert from the Institute for Development Policy and Management (IDPM) at the University of Manchester, “Governing health and safety at lower tiers of the computer industry global value chain” in the journal Regulation & Governance (the article is offered as open access and is free to everyone).

The paper investigates whether, and how, occupational health and safety standards permeate down the computer industry global value chain. It does so by comparing first and second tier suppliers located in Penang, Malaysia and their engagement with a private voluntary industry code – the Electronics Industry Code of Conduct (EICC), and the publicly regulated European Union Directive on the Restriction of Hazardous Substances (EU RoHs).

The EICC, which was developed in 2004, specifies guidelines for firm conduct and policies on labour, occupational health and safety, the environment, ethics, and management systems. The EICC is a voluntary standard and firms that comply with it are required to ensure their suppliers also implement it. The EU RoHS, which came into effect on 1 July 2006, limits the use of hazardous contents, such as lead and brominated flame retardants, in electronics goods of all electronic products sold in the European Union. The penalty for not complying with EU RoHS includes fines and the denial of market access to the EU. Both the EICC and the EU-RoHS directive have direct and potentially positive impacts on the occupational health and safety conditions of workers in factories that produce electronics goods.

The study reported in the paper investigated a group of second tier suppliers in Penang, Malaysia and found that while none of them complied with the EICC code, the majority of them did meet the EU RoHS requirements. The second tier suppliers managed to comply with EU RoHS largely using their own resources with little or no assistance from other firms or the Malaysian government. Through case studies of different second tier suppliers the paper sets out to explain why these suppliers prioritized the EU RoHS over all other governance measures.

The findings show that EU RoHS because of its mandatory legal stipulation made it a de facto market entry requirement for suppliers that were already plugged into global value chains linked to the European market. These findings raise important questions about the role of public regulation and public governance in improving labour conditions in global value chains. While there has been an emphasis over the past three decades on private standards and private measures for governing labour conditions in global industries, experience has shown these measures to have weak outcomes. When one travels further down to smaller suppliers in lower tiers of global value chains in developing countries, private labour standards can be altogether missing. This is often because small suppliers usually have weaker technical, managerial and financial resources. Moreover, many lower tier suppliers in the electronics industry are located in developing countries with weak government agencies and regulatory oversight over labour conditions. This was exactly the case of the second tier suppliers in Penang featured in the paper. For the majority of these suppliers, government agencies did not assist with the compliance of any type of private or public standards on labour conditions.

The paper highlights a critical and important finding which suggests that mandatory standards directly tied to market access may be better able than voluntary private standards to penetrate down the global value chain to reach second tier suppliers. This signals the efficacy and importance of market access regulation over private voluntary initiatives in the most difficult places of global value chains. While market access standards (especially pertaining to labor and the environment) have been difficult to implement at a global or multilateral level (given World Trade Organization restrictions) there are however many examples that prove it is possible at the regional, national/bilateral, and even local levels. For example, China, Japan, South Korea, Turkey and California have all implemented their own versions of a RoHS.

Moreover, market access standards can have harmonizing effects on an industry. Take the printed circuit board industry as an example. After the EU RoHS banned the use of lead, printed circuit board companies found it more expensive to operate two different types of manufacturing processes – one that uses lead for non-EU markets and one that is lead free, complying with EU RoHS, and destined for the EU market. Also, brands such as Apple and Dell now require all of their products globally to comply with EU RoHS.

The findings of the paper support arguments for complementary public-private governance arrangements. Our findings suggest the need for policy actors and researchers to further investigate how to better integrate private regulation with public regulation and public enforcement in order to improve working conditions at lower tiers of the global value chain.

The paper can be accessed free at http://onlinelibrary.wiley.com/doi/10.1111/rego.12079/abstract

This blog also appears on www.labourandelectronics.net and http://www.risingpowers.net

Policies for youth employment: What can we learn from Lord Sugar’s The Apprentice?

By Nicola Banks

The Apprentice is one of my TV highlights. Watching through open fingers as Lord Alan Sugar tries to find his next business partner amongst a bunch of hapless contestants makes one thing very clear: No amount of self-belief can make you a successful entrepreneur. Enthusiasm can’t make up for a lack of customer awareness or critical business skills…watching James ‘Multiple Business Owner’ Hill singing The Wheels on the Bus while his tour customers groaned and threw tomatoes (not literally) is one of countless comedic illustrations of this.

Yes, these contestants have been selected to make quality viewing, and yes, they face the pressure of short-timelines, the desperation of winning £250,000 and a business partnership with Lord Sugar, and an editing process that puts customer entertainment first. (They can’t all be that bad, can they?!). But watching each of the 20 contestants make poor decision after poor decision, and watching with relief as Lord Sugar fires one after another, it is clear that we are all far from natural born entrepreneurs. If this was the case, we’d all be millionaires. As we apply the term ‘entrepreneur’ in the UK, there is something unique and intrinsic about it – something beyond initiative, ingenuity, skills and the ability to take risks that you can’t learn in school, at university, or through work experience.

So why in global policy have we focused on ‘youth entrepreneurship’ as a promising solution to the global youth unemployment challenge, which is inarguably one of the most pressing global priorities of current times? The reality of work for most youth in developing countries is informal and poorly paid work or unemployment. In 2013, 73.4 million young people were out of work – an increase of 3.5 million since 2007. Worsening economic outcomes for young people are evident in persistent and increasing unemployment and a proliferation of poor quality, informal and subsistence jobs (‘Global employment trends for youth 2013). Is this an environment in which entrepreneurship can thrive? In what possible scenario can we see entrepreneurship absorbing the growing youth populations who are faced with the continuing prospect of jobless growth (Global Employment Trends 2014: The Risk of a jobless recovery).

This week the UNFPA launched its State of the World’s Population Report 2014. The Power of 1.8 Billion: Adolescents, Youth, and the Transformation of the Future, it is called, and its message is clear. Young people matter. They constitute nearly one-third of the world’s population and their developmental outcomes are a game-changer that can make or break national development goals. That their agenda has been so overlooked for so long has severe implications not only for large sections of this 1.8 billion youth as they struggle to secure their livelihoods and make investments in their futures, but also on economies and societies across the globe. Future forecasts for youth unemployment across all regions look bleak moving forwards, considering the ILO Youth unemployment rate estimates and projections by region 2007-2017.

Entrepreneurship is an obvious solution to promote in such a difficult labour market. High levels of poverty mean that finding some form of income is among young people themselves’ top priorities. It is also an intervention amenable to finding quick-fix solutions, so is attractive to governments and NGOs. It lends itself to tangible and measurable interventions, whether this might be number of youth trained, loans given or small businesses started. For many years the microfinance industry cultivated a false confidence and policy rhetoric that “one loan equals one thriving business” (some may argue that this still exists). I see a similar danger in the current dialogue on youth entrepreneurship. The link in reality is not so clear. Vocational training does not necessarily translate into successful businesses. What about focusing on the quality of skills training? What about proper certification processes and making sure that training aligns with local labour markets? What about oversaturated markets and limited client bases? Of course, drawing on impact evaluations into ‘what works for youth entrepreneurship’ many programmes supporting youth entrepreneurship offer multi-pronged packages of assistance that combine locally-relevant vocational skills with financial management, customer awareness and other business skills. Many also offer access to loans so that young people can invest and utilise these new-found skills.

My concern is not that these programmes are better than an alternative scenario in which they do not exist. My concern is that such widespread promotion of youth entrepreneurship removes responsibility away from governments and private sectors in their roles for creating and expanding access to decent jobs for young people. My concern is in the other major stakeholders driving the agenda. Partnering with the Guardian in their ‘Tackling Youth Employment Hub’, for example, is Barclay’s Bank. Unsurprising, therefore, that among the key messages from many of their inspirational stories of youth entrepreneurship is that beginning to teach entrepreneurship in schools will help young people transform their own futures, and that by giving out loans for small enterprise we can accelerate this process. Have we not learnt from the pitfalls of microfinance as a solution to poverty? The ‘swift and systematic’ action this ‘sponsored by Barclay’s’ article proposes cannot address the bigger systemic issues we must address. It cannot meet the multitude of social and economic problems the world’s young people face in scale or substance.

We discuss elsewhere how the project-isation of ‘development’ has limited our capacity for facilitating transformative and more socially-inclusive development. Others apply the same argument to the focus on youth unemployment and entrepreneurship arguing that this has ‘magic-ked away’ the politics of a globalised world and left us with well-intentioned, country-specific projects.

Some youth are, of course, changing their futures through self-employment. Despite their limited financial resources, many others are changing the futures of others through social entrepreneurship, drawing on an abundance of creativity, leadership skills and support from inspirational organisations like Ashoka or Educate!. Herein lies another huge difference between young entrepreneurs in Sub-Saharan Africa and Lord Sugar’s protégés. For these youth, it is genuinely a case of people before profits. You wouldn’t see that in the Boardroom. Now is the time for a call to arms in global policy away from youth entrepreneurship towards a two-fold focus on youth engagement – in which employment is but one improved outcome as young people create a critical mass and place themselves at the core of transformations and solutions – and youth inclusion, so they can strive in this process helped by a more supportive social, political and economic environment. In this, I join the State of the World’s Population’s call to harness the power of 1.8 billion in transforming not only their own lives but also our global future.