None of the rulers from the time of Abdur Rahman’s death until the communists seized power in 1978 had his reputation for violence, and the country enjoyed a long peace from the 1930s through the early 1970s. Our theory can explain why despite substantial political order, property rights did not develop much: the rulers who made minor progress in establishing legal property rights had very little state capacity and could not maintain political control, and there was never much progress in establishing political constraints. The communist governments faced even fewer constraints and were largely insulated from local institutions, which contributed to a massively unsuccessful effort to redistribute land, while the Taliban, despite providing some semblance of order and recognizing the importance of customary and traditional institutions, were largely unconstrained and without much administrative capacity to implement any sort of reform. Together, these developments illustrate a key implication of the theory: meaningful progress in establishing property rights requires a monopoly on coercion, high state capacity, strong political constraints on rulers, and inclusive political and legal institutions. Weakness of any of these elements can prevent the emergence of private property rights.

Chapter 2 presents our theory of property rights. The chapter begins by reviewing the literature on property rights, including all relevant theoretical perspective on the emergence of property rights. In our theory, property rights require definition and enforcement. Unlike political theories of property rights, which view the government as the source of property rights, we recognize that organizations whose authority lies outside the state often have an organizational structure comparable to governments. Unlike existing theories of informal property rights, we highlight that the emergence of self-governing property rights requires overcoming dilemmas like those confronting governments. Thus, states and non-state organizations, such as customary council or a tribe, confront similar challenges in establishing property rights. In our theory, property rights protection is more likely when the organization in question has a monopoly on authority, administrative and enforcement capacity, constraints on organizational decision makers, and decision-making institutions are inclusive. We use the theoretical discussion to clarify situations when property rights to land are provided as a public good, the success of self-governance at securing property rights to land, and when legal titling improves social welfare. The chapter concludes with clear empirical predictions that will guide the empirical studies.

In much of the developing world, legal titling – the registration of land ownership through a formal, judicial process – is viewed as a path to economic development and political order. The introductory chapter explains why legal titling is unlikely to fulfill this promise. It begins by making a case that the new institutional economics and public choice, which were developed and applied to date in mostly Western contexts, are useful in understanding political, economic, and social institutions in the Islamic world. We then introduce our theory of emergence and change in property rights, which explains the situations when we expect the government to define and enforce property rights, when self-governance of property rights can work, and why it is unlikely that legal titling will be feasible as a development strategy in a typical fragile state. We conclude by introducing our empirical study of Afghanistan. The highlights of the empirical study include fieldwork conducted by one of the authors in thirty villages in rural Afghanistan, which resulted in hundreds of interviews with ordinary villagers, customary village leaders, and local government officials.

Our theory can explain why governments do not define and enforce property rights. The political history of Afghanistan illustrates the persistence of non-emergence of legal property rights. We also seek to explain why the Hobbesian account of the world in which there can be no sense of justice and no concept of property without a state is mistaken. According to our theory, self-governance would substitute for the state as a source of property rights when organizations have local monopolies, when they possess the capacity to resolve conflicts over land disputes, when their key decision makers face constraints, and when the institutions for local collective action are inclusive. Chapter 5 investigates this claim. Using original evidence from fieldwork, we show that self-governance of property works well in rural Afghanistan because customary governance satisfies the above criteria. Our theory can also explain why the formal property regime remains ineffective nearly two decades after state building commenced in 2001. Importantly, the property institutions in rural Afghanistan are typically private property rights, not unlike property rights in Western contexts. The difference is that customary private property rights in Afghanistan are effective despite not having any legal recognition.

Chapter 6 considers self-governance of two important types of commons: water and forests. The mirab, or water manager, is a person who works on behalf of a group of communities to ensure members across villages have access to irrigation water. Forest shuras govern use and access to forests. Mirabs and forest shuras are often effective in governing commons, for reasons our theory predicts, but are vulnerable to outside threats that cannot be collectively countered by the community: irrigation infrastructure has often been destroyed during conflict and is too costly for communities to provide, and the Taliban, commanders, or warlords are often able to extract forest resources by force. Thus, our conclusion is that foreign aid and other government assistance should focus on threats from the outside while leaving daily management of the commons to communities. Our analysis thus extends the insights of Elinor Ostrom, who understood well the possibility of self-governance of property, to self-governance in especially fragile, war-ravaged states such as Afghanistan. In such contexts, war – and organizations that come about during war – can be a great destabilizing force for governance of the commons.

In Chapter 3, we consider property rights in Afghanistan from the formation of the Afghan state in 1747 through 1901, when Abdur Rahman, one of Afghanistan’s most ruthless kings, died. The Afghan state during its first century was fragmented and marred by frequent political conflict. Nonetheless, its political arrangement, which we call a de facto federation because it dispersed political power in practice but not formally, provided a political foundation for the emergence of land-use rights and vibrant trading routes. The situation was not unlike England’s de facto federation that enabled the rise of markets after the Glorious Revolution, one in which the fragmentation of political power at the national level and the rise of towns contributed to a political environment in which institutions were allowed to change in response citizens’ needs. Unlike in England, where wealth-creating economic institutions strengthened over time, these productive institutional developments in Afghanistan were reversed at the conclusion of the nineteenth century as Abdur Rahman began to consolidate political power. Our theory can explain why: because coercive and administrative capacity occurred alongside the dismantling of political constraints, consolidation of political power resulted in the destruction of private property rights and trading routes.

According to its advocates, legal titling promises to improve investment (both public and private) and prospects for political order. A persistent puzzle is why its actual impact is often ambiguous or even harmful. Our theory suggests the answer lies in the qualities relating to government: when the state enjoys a monopoly on coercion and administrative capacity, when political decision makers face constraints, and when there are inclusive institutions linking communities to the state, legal titling can improve economic and political well-being. Since these political preconditions for successful legal titling are likely to be absent in conflict-affected states, it is unlikely that legal titling will be effective in such states. The evidence from Afghanistan supports our theory. The legal-titling projects in the country have not worked well, for the reasons just listed. Yet community-based recording of landownership – donor-assisted, community-initiated programs that partner with communities, not the state, to document who owns what land, buildings, and commons – have improved household land-tenure security. These community-based programs illustrate how working with customary governance institutions improves the impact of development assistance.