The starting point for any programme of development often lies with the intrinsc value of the existing land. Wherever there is an existing concentration of people, land has a value, whether existing in rental arrangements, sale value or occupation. The other way in which land may obtain a value is by reason of associated demand connected with natural resources. But control over the natural resources may lie with government rather than the landowner. To initiate development, capital must be liberated so that people and assets can be moved away from a subsistence-based existence to capitalist accumulation and reinvestment.

 

The financing for this step change may come from land, where it is in demand and therefore whre there is a market (or there could be a market) in land. Instruments to release or render liquid the capital inherent in land may be developed by financiers, the most well-known of which is the mortgage. But mortgages can be crude instruments, too legally clumsy to permit diverse participation in the commoditisation of land and its incidents.

 

The contemporary development economist therefore prepares a range of financial instruments and legal enforcement methods to help commoditise land and spur growth. This must be done consistently with the interests of existing landowners or occupiers, even if those interests are informal. Otherwise the social tensions resulting may have costs higher than the development benefits. Moreover a class of putative capitalists - original owners - may be excluded from development. The long term consequences of this can be social division, another inhibitor of effective development.