Monday, August 18, 2008

Deadwood and Land Tenure

My wife and I were recently re-watching Deadwood, an HBO series that takes place in a post civil war Dakota gold mining town. A major plot point of the show is how Deadwood might eventually be incorporated into the United States as it was in unclaimed territory. The hope of the local business leaders is that their current claims to both mining rights and down town land will be recognized once the territory was brought into the union.

To develop businesses or mine claims, the prospectors need guarantee of title. In one of the first episodes, Al Swearengen a local leader sells a plot of land to Seth Bullock and Sol Starr so they can build a hardware store. Yet, Deadwood is in an unclaimed territory and has no clear way to enforce the title to the land. I guess Swearengen’s backing is enough to give confidence that the improvements made on the land will be upheld.

Through a system of enforceable property rights Deadwood was able to develop into a sizeable mining town. Yet, many countries still lack a means for enforceable property rights. In my visits to rural Mexico, it seemed that many farms did not have title to their land and although they could be reasonable sure no one would steal it, it was difficult to sell. The lack of the ability to sell land or use it as collateral has been pointed to as one of the causes of underdevelopment in many countries.
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