Land Titling and Microcredit in Cambodia

Examining the reality of Hernando De Soto's ‘Three steps to heaven'

Starting with the work of Hernando de Soto in the 1980s, the role of land tenure soon took center-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.
  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. 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.

About this Publication

By Milford Bateman