Introduction

History is rife with examples of state and private actors systematically confis­cating property from one group without consent and without paying just compensation and then transferring that property to another group.  I call these actions property dispossession or property theft.^[1] In some cases, dispos­sessed populations have made resounding cries for reparations during the transitions from the offending regimes to the new political orders.^[2] During Communism, for example, several Eastern European governments took property from the aristocracy and Nazi sympathizers to distribute it to their peasant popu­lations.^[3] After the fall of these governments, pre-Communist owners in the Czech Republic, Estonia, Germany, Hungary, Latvia, Lithuania, and Slovakia demanded reparations.^[4] To placate these constituencies, the transi­tional gov­ernments had to determine how to address the property dispossession that had occurred during Communism.^[5]

Similarly, beginning in 1652, Europeans arrived in southern Africa, estab­lished economic and political dominance, and brutally took ownership of vast swaths of land from the African majority.^[6] In the 1980s and 1990s, Zimbabwe, South Africa, and Namibia transitioned from white minority rule to majority rule.^[7] One of the greatest challenges faced by these new African governments was how to help the African population reclaim their stolen land.^[8]

Similar events have taken place in the Middle East.  Saddam Hussein’s rise to power culminated in 1979 when he was named president of Iraq.  Over the course of his dictatorship, he subjected Kurds to severe discrimination—including unjust confiscation of their property.^[9] In 2003, American troops ousted Hussein, setting the groundwork for Iraq’s tumultuous political transi­tion in which the Kurds gained significant political power.^[10] For the Kurds, addressing past property dispossession was a political priority, but choosing the manner in which to proceed proved challenging.

Another example of property dispossession is the Rwandan genocide of 1994, in which significant amounts of property were stolen or unwillingly aban­doned by citizens fleeing ethnic violence.  In fact, one impetus behind the mass killings was the desire of many Hutus to confiscate Tutsi property.^[11] When the genocidal killing abated, Paul Kagame seized the reins of power and began the political transition.  President Kagame—like many other leaders in times of transition—was forced to ask the recurrent transitional justice question: What can our government do about past property dispossession?^[12]

Transitional justice is the study of those mechanisms employed by com­mu­nities, states, and the international community to promote social reconstruction by addressing the legacy of systematic human rights abuses and authoritarianism.  There is a well-developed transitional justice literature discussing how states can deal with past violations of civil and political rights such as incarceration, murder, sexual abuse, and torture.^[13] There has also been healthy discussion about the value of truth commissions and international and domestic prosecutions concerning these violations.^[14] Despite the important experi­ences of nations in Eastern Europe and Southern Africa, Iraq, and Rwanda that I have discussed, the transitional justice literature on how to address past property rights violations is significantly less developed.^[15]

In this Article, I explore the effects of past property theft on the current property status quo.  The property status quo or property distribution is the existing distribution of property among various racial, ethnic, or religious groups in a society.  This status quo is important because property ownership structures group relations.  When one group owns a disproportionate amount of property, the resulting asymmetries in social status and economic power can leave weaker groups open to various forms of subordination, which can foster deep resentment that undermines social reconstruction.^[16]

When transitional states have the political will to address past property theft and promote social reconstruction, the enduring question is: How can a transitional state accomplish these goals?  The answer to the question is com­plex and highly contextual.  Thus, in Part I, to isolate the key issues that many countries face, I discuss a hypothetical transitional state called Naiku with a historical record that accentuates the challenges at hand.  In Part II, I discuss Naiku’s three main options: (1) maintaining the present property status quo, (2) fully or partially returning to a prior property status quo, or (3) creating a new property status quo.  In Part III, I argue that when a transitional state is determining the most advantageous option, its decisionmaking process is cru­cial.  A state should decide which option to pursue through an inclusive public dialogue with well-informed participants rather than through a less time-consuming, less costly process involving only elites.

I.        The Hypothetical Nation of Naiku

I have created the hypothetical African state of Naiku to illustrate my argument regarding the redress of past property theft.  Three events in Naiku’s history radically transformed the country’s property allocation, and each one led to a new property status quo.  The country is now on the cusp of its fourth potentially transformative event.

1. Archeologists have confirmed that the people of the small kingdom of Alim were the first modern humans to occupy the region now known as the country of Naiku.  The Alim were farmers who tilled the fertile land.  No one owned land, but custom dictated that all had rights to use it according to their needs.  Following a sudden boom in the popula­tion of the neighboring nation of Alieu, coupled with a severe drought, the people of Alieu ventured out of their occupied territory in 1810 and conquered the Naiku region, bringing the concept of communal land ownership with them.  The Alieu murdered the Alim leadership but incor­po­rated the Alim people into the Alieu nation as full citizens with equal rights.  Under the Alieu property system, the chief formally owned and controlled all land and gave members of the nation use rights according to each family’s needs.  In the new Alieu nation, the people of Alim and Alieu lived side-by-side peacefully and intermarried often.
2. One hundred years later in 1910, the British arrived, vanquished the nation of Alieu, declared Naiku a colony, and claimed sovereignty over Naiku’s land.  They immediately evicted the natives from 90 percent of the land, divided that land into deeded lots, transferred the lots to British settlers and several members of the Alieu nation who cooperated with the British government, and created a land registry to maintain a record of ownership.^[17] The British settlers were economically and politically domi­nant from this point on.
3. In 1996, the warriors of Alieu united under the leadership of General Abdeena, ousted the British, and won independence for their people.  Ab­deena was initially highly respected and hailed as the country’s redeemer, but quickly became unpopular because she ruled with a heavy hand and failed to redistribute land as promised.  Instead, without paying just com­pen­sation and without consent, she expropriated all the deeded lots distributed by the British in years prior and transferred over 65 percent of these lots to herself, her family, and her political cronies.^[18]
4. In 2009, Abdeena was deposed in a bloodless coup, and soon thereafter a new government took power in Naiku’s first democratic election.  Layla was elected president, in large part, based on her promise to transform the property distribution.  This political transition placed Naiku on the cusp of the fourth event with the potential to drastically transform its property status quo.  Most citizens—both black and white—agreed that the present property distribution was unjust because General Abdeena’s corrupt allo­ca­tions of property were patently unfair.  But, the corrupt transfers of land made by the general were complicated by the fact that, by 2009, the owners had sold 20 percent of the deeded lots to innocent third parties at market prices.

Chronology of Land Ownership

The vast majority of Naiku’s citizens agree that the state must do something about the multiple layers of land dispossession, so there is tre­men­dous political will to transform present property arrangements.  Today the population of Naiku is as follows: The Alim and Alieu (who are black) consti­tute about 80 percent of the population, while the offspring of British settlers (who are white) constitute about 10 percent.  An additional 10 percent of the population falls under the category of “other” by either claiming both British and African ancestry or some other ancestry altogether.  The economi­cally dominant descendants of the British settlers, backed by the British gov­ernment, are demanding a return to T3—the property distribution that was in place just before independence in 1996.^[19] Meanwhile, the people of Alim and Alieu—now politically powerful—are demanding a return to T2, the pre-colonial property distribution, or to start anew.  A small faction, which traces its ancestry directly back to the Alim, is demanding a return to T1 when the Alim people were the sole inhabitants of Naiku.  In the midst of these varied demands and stark uncertainty, one thing is definite: To consolidate the politi­cal transition, Layla’s government must create an efficient yet fair resolution to the multiple layers of land dispossession that have occurred in Naiku.

T5 is a crossroads for Naiku because the nation has the opportunity to rec­oncile its past in order to secure its future.  There are some constraints, however.  A government’s freedom to imagine alternatives is bound by the extant but unwritten rules that transitional states (especially resource-deprived transitional states) must follow to gain acceptance into the new globalized economy.  If transitional states do not comply with these rules, they will likely experience a decrease in the bilateral, multilateral, and private sector funding necessary for economic development.^[20] At least one nonnegotiable rule for acceptance in the globalized economy is the commitment to protecting private property rights and promoting free-market democracy.  Naiku’s newly elected gov­ernment is aware of this requirement but remains determined to create a property distri­bution that the vast majority of its citizens view as legitimate.

There are, however, problems with each of Naiku’s past property status quos.  General Abdeena’s 1996 land transfers to herself, her family, and her political cronies at T4 was unquestionably unjust; given the short span of time that has passed since then, this injustice still dominates the society’s collective memory.  The violent British acquisition of Naiku and the transfer of deeded plots to British settlers and their supporters at T3 were equally ille­gitimate.  Although these events occurred a century ago, the resulting unequal, racially skewed property distribution lasted until 1996 and has been the source of much anger and outrage among the African majority.  Consequently, the injus­tice is fresh in the nation’s collective memory and has proven to be an explosive issue in current Naiku politics.  The kingdom of Alim’s defeat, the massacre of its leaders, and expropriation of its land at T2 were similarly unjust.  As a result of the lapse of time between the present and T2 (about two hundred years), these are the only events of dispossession that play a nominal role in the nation’s collective memory and are not politically divisive.  Given the com­pli­cated history of dispossession and its effects on the present state of affairs, Naiku must carefully decide its path at T5.

II.      Options Available to the Nation of Naiku

The state’s role in determining ownership patterns is especially pronounced in nations like Naiku where there have been multiple layers of property dispos­session that have created multiple potentially legitimate claims to the same plots of land.  In transitional states, the government’s decision to address or ignore past property theft determines who will be considered the legitimate owner of each plot.  Naiku’s government has three possible courses of action at T5: (1) maintaining the present property status quo, (2) fully or partially returning to a prior property status quo, or (3) creating a new property status quo altogether.

A.       Option One: Maintaining the Present Property Status Quo

If Layla’s government chooses to maintain the present property status quo, it will look forward and not address the multiple layers of past land dispos­session in Naiku.  Instead, her government will rely on the market to place resources in the hands of those who will use them most efficiently.  From an efficiency standpoint, who initially owns the property is irrelevant because the properties will end up in the hands of those who value them most highly, if transaction costs are low.^[21] Thus, following the examples of Namibia, South Africa, and Zimbabwe in their transitions to democracy, Naiku can allow current trade and investment to continue unencumbered by giving current landowners clear title to their property despite how it was acquired.^[22]

Maintaining the present property status quo ensures that investment and trade are not attenuated by protecting existing investment-backed expec­tations, including the expectation that innocent third parties who bought property during T4 at market rates will retain rights to that property without fear of expropriation.  This option also requires the least bureaucratic interven­tion, conse­quently making it the least vulnerable to government failure, which “arises when government has created inefficiencies because it should not have intervened in the first place or when it could have solved a given problem or set of problems more efficiently.”^[23]

One central flaw is that maintaining the present status quo legally legiti­mizes a patently unfair land distribution.  Before General Abdeena was deposed, she titled a vast amount of land to herself, her family, and her politi­cal cronies; consequently, the vast majority of citizens view present-day ownership patterns as illegitimate.  Most importantly, this commonly held view of the cur­rent property distribution has engendered a great amount of societal resentment and anger.  Layla’s government must ensure that this discon­tent is channeled in an orderly manner through existing social, legal, and political institutions; ot­h­erwise, the country risks economic-based political turmoil.^[24] Even if maintaining the current status quo is the most economi­cally effi­cient option, Layla’s gov­ernment should choose a different option to avoid economic-based political turmoil.^[25]

B.       Option Two: Fully or Partially Returning to a Prior Property Status Quo

The second option Naiku has at T5 is to fully or partially return to a prior property status quo by taking the present property distribution as a starting point and using its powers of eminent domain to make land available for return to past owners.^[26] If significant time has passed, and the state can no longer identify the beneficiaries of past unjust transfers, then it must provide the funds to purchase property from its general coffers.  If, however, the beneficiaries of past unjust transfers are readily identifiable, the state can require them to fully or partially finance the return of property.^[27]

To implement this option, Naiku can use two types of redistributive pro­grams: reparations or restoration.  Reparations programs are designed to vindi­cate past property rights.^[28] In a reparations program, if property was confis­cated unjustly, then the dispossessed have a window of time to file claims.  These claims are vetted through a judicial or administrative process to determine whether compensation is warranted.  A defining feature of repa­rations programs is that the beneficiaries do not have a great deal of choice in what they receive; they usually receive either land restitution or money as compensation.

Restoration is also a specific type of redistributive program designed to vindicate a past property right.^[29] As with reparations, the state determines the process for accepting, validating, and paying restoration claims, but resto­ration is distinct from reparations on two counts.  The first point of dis­tinction concerns who is eligible to become a beneficiary.  In a restoration program, beneficiaries must be subject to property-induced invisibility in order to qualify.  As I have previously argued,^[30] in certain situations, dispossession involves more than the confiscation of property; it involves the removal of an indi­vidual or community from the social contract.  I call this property-induced invisibility and use the work of John Locke, Carole Pateman, and Charles Mills to provide a clear definition.^[31]

Property-induced invisibility is defined as:

the widespread or systematic confiscation or destruction of real property with no payment of just compensation executed such that dehumani­zation occurs; the act is perpetrated by the state or other prevailing power structure(s), and adversely affects powerless people or people made powerless by the act such that they are effectively left economically vulnerable and dependent on the state to satisfy their basic needs.^[32]

For example, if a colonial government impoverished my father by confiscating his property during T3 and subjected him to property-induced invisibility, he would qualify for compensation.  But, if my father has passed away and my siblings and I have become well-off, then we would not qualify for compensa­tion from the state because we do not meet the last condition of restoration: We are not economically vulnerable and dependent on the state to meet our basic needs.  In contrast, under the reparations paradigm, the current financial posi­tion of the dispossessed person or her descendants is irrelevant, so my siblings and I would qualify for compensation despite our elevated socioeco­nomic standing.

The second point of distinction between reparations and restoration pro­grams is what the beneficiaries receive.  When the confiscation of a commu­nity’s or individual’s property causes property-induced invisibility, the state’s objective should not be simply to compensate them for the stolen property; the need is more profound.  The state’s objectives should be to bring them into the social contract, to restore their visibility, and to affirm their humanity.  A state can accomplish these objectives by giving the dispossessed a choice.^[33] It is important to allow those subject to property-induced invisibility to partici­pate in determining their compensation in order to give them control over the terms of their reentry into the body politic and affirm their humanity.  The choices may include: the return of the confiscated property; the grant of alterna­tive property if the original property is no longer available; financial compensation; or a variety of in-kind benefits, such as subsidized credit, free higher education or vocational training for two generations, or urban housing rights. ^[34] In contrast, the focal point of a reparations program is not providing the victim with a choice.

Regardless of whether a state implements a reparations or a restoration program, to return to a prior property status quo, it must surmount six potential roadblocks.  The first hurdle involves identification of program bene­ficiaries.  When those who were originally dispossessed have died, it can be difficult to identify who should receive compensation in their stead.  Some may argue that once the dispossessed person dies, his or her claims die as well.  Others argue that a debt is not extinguished upon death.  Instead, the debt is owed to the deceased’s estate; and so should be the case with debts arising from dispossession.  If individuals of Alim and Alieu descent successfully prove that their ancestors were dispossessed during T3, then the heirs of the dispos­sessed should receive compensation.  But, identifying heirs can be extraor­dinarily diffi­cult when a significant amount of time has passed between the event of dispossession and the moment of compensation.  With each genera­tion, the num­ber of heirs increases exponentially, and the state will require complicated family trees to identify them.

If the Alim and Alieu community is intact, however, it can make a community claim for compensation.^[35] This approach is more akin to a living victim making a claim because the community transcends the lives of its indi­vidual members and endures through time.  The compensation would go to the collective for the betterment of all its members.^[36] All people of African descent whose ancestors were born in Naiku are part of the Alieu nation that existed at T2.  Due to frequent intermarriage, a return to T1 (when the Alim were the sole occupants of the land) would be almost impossible because the Alim are no longer a distinct community.

The second challenge to implementing a reparations or restoration program is obtaining verifiable proof of prior ownership or occupation.  Produc­ing a deed or other official written document would be the simplest way to prove ownership or occupation, but there were no deeds in Naiku until the advent of the Europeans at T3.  Nevertheless, if the nation of Naiku desires to restore rights in existence prior to T3, it can accept diverse forms of evi­dence to prove that an individual or community had a right to a particular plot of land, as South Africa did in its land restitution program.^[37] South Africa relied upon a variety of forms of evidence, including documents in the national archives, physical evidence such as graves or ruins that indicated occupation, and oral evidence such as testimony concerning ownership or occu­pation from the claimant verified against testimony from other occupants or their descen­dants who lived nearby.^[38] But, despite a state’s willingness to use diverse forms of evidence, the undeniable reality is that verifying who owned or occupied land becomes more difficult as time passes because, for instance, people who can provide oral evidence to confirm ownership eventually die.

The third hurdle in fully or partially returning to a prior status quo is acknowl­edging people who never owned anything in the past.  Before the state makes a decision to reinstitute a prior property status quo, there must be a national consensus that the previous arrangement was significantly more legitimate than the present one.  This consensus will be informed by a nation’s memory of the past as kept alive through historical texts, oral traditions, and popular culture.  Nevertheless, even if there is a consensus, the prior status quo had various imperfections and those imperfections will be restored.  Con­se­quently, restoring a past property status quo can serve to resurrect a former aristocracy and to exclude those who never owned property in the past.  Option three, which I discuss in the following Subpart, addresses this concern directly through a full-scale redistribution of wealth.  In the alternative, to address the needs of people who are currently poor and have never owned property in the past, a state can implement a restoration or reparations program in concert with significant redistribution effected through the tax and transfer system, as demonstrated in South Africa.^[39]

The fourth challenge to returning to a prior property status quo is the uncertainty that results from using eminent domain.  When returning property to prior owners, the state should use eminent domain and pay existing owners just compensation.  The determination of just compensation should use the fair market value as the starting point but must also take into consideration factors such as the conditions of acquisition, acquisition price, and any state subsi­dies from which the owner benefited.^[40] Using eminent domain to restructure property rights promotes fairness to all groups, including nonindigenous people who immigrated to Naiku in the last one hundred years and at no point bene­fited from any unjust past land transfers.  The downside of using eminent domain is that it can cause uncertainty and dampen investment.  Jahangir Saleh notes that “[u]ncertainty of expropriation affects the uncertainty of returns and tends to discourage investment for risk-averse decision makers.”^[41] This uncer­tainty begins when the redistributive program is announced (or when the public believes that it has a high probability of being implemented) and ends when the new owners of the land are determined.^[42] Once the uncer­tainty ends, trade and investment are no longer affected unless the government does not make a credible promise that the transformation is a one-time ordeal.^[43]

The sixth and most formidable hurdle in returning to a prior property status quo is answering the question: How far back?  That is, a reparations or res­toration program rectifies property rights violations that occurred during a specific time period, and the state must determine the eligible time period.  This is a daunting question for nations like Naiku that have experienced mul­tiple layers of property dispossession.  Should Naiku’s program compensate people for property rights violations that occurred from 1910 to 2009 (includ­ing only T3 and T4) or from 1996 to 2009 (including only T4)?  Or should the state include all violations that have occurred since 1810 (the period encom­passing T2, T3, and T4)?

Numerous countries have dealt with these hard questions.  In 1994, after the fall of apartheid in South Africa, the new political dispensation contended with apartheid-era land theft by enacting the Land Restitution Act, which instructs the state to compensate individuals and communities for a “right in land or portion of land dispossessed after 19 June 1913 as a result of past racially discriminatory laws or practices.”^[44] Similarly, in the Balkans prior to the NATO bombing of the region in 1999, thousands of Kosovo Albanians were forced to flee their homes due to a Serbian-led ethnic-cleansing cam­paign.^[45] The interim U.N.-led civilian administration (the United Nations Mission in Kosovo or UNMIK) enacted a reparations program that gave any person who was dispos­sessed of a property right as a result of discrimina­tion between March 23, 1989, and March 24, 1999 a right to restitution in kind or compen­sa­tion.^[46] In Germany, the government enacted the Law on Settlement of Open Property Questions in September of 1990, which permits return of property that was expro­priated by the East German government after 1949 as well as property expro­priated by the Nazis between January 30, 1933, and May 8, 1945.^[47]

In 1991, the Hungarian government enacted the First Compensation Law for owners subject to Communist-era expropriations;^[48] and in 1992, the gov­ernment passed the Second Compensation Law, which mandates compen­sation for Jews dispossessed by Nazi Germany and ethnic Germans expelled from Hungary in the wake of the Nazi retreat.^[49] Australia’s reparations program—instituted by the Aboriginal Land Rights (Northern Territory) Act of 1976—set aside a twenty-year period (1976–1996) during which the state allowed abo­riginal people to make a collective property claim to crown land that had been stolen from them during conquest.^[50]

Like many countries before it, Naiku must also decide which property violations it will rectify.  It can return to the property status quo that existed at T1, T2, or T3, each of which has its own specific virtues and vices, which I review below.

1.       Return to T1 or T2

The most compelling argument for returning to T1 is the principle of first possession: first in time, first in right.^[51] The Alim are the first known human inhabitants of the land and are the only group in present-day Naiku to have an indisputable claim to just acquisition.  But, an addendum to the first-in-time principle is Locke’s labor theory, which posits that being first to occupy is not sufficient to constitute ownership because land ownership results only when labor is mixed with the land.^[52] Under Locke’s labor theory, the Alim owned, and thus only have a potential claim to, lands that were under cultivation or being used in other productive ways.  Similarly, the virtue of returning to T2 is that at T2, both the Alim and Alieu occupied the land on an equitable basis because the chief distributed land fairly according to each family’s needs.

There are, however, specific obstacles to returning to T1.  It has been about two hundred years since the Alim exclusively inhabited Naiku in T1 and just less than one hundred years since the Alieu nation ruled in T2.  Due to consistent intermarriage, the two communities are no longer distinct, so returning to T1 is logistically impossible.  But, since the Alieu community endures, a community claim is appropriate, and all present members would bene­fit from the compensation distributed by Layla’s government.  In contrast, with individual or family claims (or claims of an extinct community), the origi­nal claimants are deceased, so the beneficiaries are their heirs, who are potentially numerous and difficult to locate.  Consequently, given the sig­nificant passage of time, a return to T2 is logistically possible only because the Alieu nation is a surviving, functional entity that can identify its members and distribute com­pen­sation for the betterment of all.

Even if a return to T1 were logistically possible, it is not clear whether it would be a morally appropriate solution.  Jeremy Waldron’s supersession thesis argues that circumstances change such that what was rightfully owned at one point may not be rightfully owned at a later time.^[53] He reasons, for example, that if someone steals another person’s car, this is a continuing injustice, so compensation provided for the car is not meant to rectify something that hap­pened in the past, but rather to address a present ongoing injustice.^[54]

Waldron tempers his claim by acknowledging that various circumstances erode even continuing entitlements.  Consider, for instance, two communities—M and O.  Each community has its own water source; thus, M has a moral right to exclude O from using M’s water source, and O has a moral right to exclude M from use of O’s water source.  But if a drought dries up M’s water source, then O no longer has a moral right to exclude M because the exclu­sion could lead to mass suffering and death in the M community.  Even if M invaded O’s waterhole by force prior to the drought, once M’s water source has dried up, M has a moral right to continue using O’s well because it is immoral to deprive someone of something necessary for her survival.  Conse­quently, the initial injus­tice perpetrated against O (that is, the invasion) is superseded by circumstance (the drought).^[55] In the case of Naiku, the Alim owned land at T1, a time of plenty.  At T2, drought and population explosion caused land scarcity—the impetus behind the Alieu nation’s attack on the Alim in 1810.  Thus, according to the supersession thesis, subsequent circum­stances superseded and morally justi­fied the Alieu’s use of Alim lands.  According to the superses­sion thesis, returning to the property status quo at T1 and making the Alim the exclu­sive beneficiaries of the reparations or restoration program would therefore be morally unjust.

Returning to T2 also has it problems, namely evolving land ownership systems.  In Naiku, land was not owned individually in fee simple until T3 when the British arrived, divided the land, and deeded each plot.  Under the Alieu nation at T2, the chief owned all the land and parceled it out to his subjects according to their needs.  The system introduced by the British, however, persists today, so a return to T2 would be problematic because a different land ownership structure existed then.  One way to reconcile the dif­ferent land ownership systems would be to treat occupancy rights at T2 as ownership rights in fee simple for purposes of the restoration or reparations program.^[56] This is what the South African state did in its reparations efforts, for example.

2.       Return to T3

A return to T3 is the most logistically feasible option if the state intends to compensate individuals rather than groups.  When the British arrived in 1910, they introduced a property system based on written deeds and a land registry system.  Therefore, determining who owned which parcel of land after T3 would not be nearly as challenging as returning to the period before British conquest.  Also, since British settlers were dispossessed in 1996, concerns about identifying who should receive compensation are attenuated because most owners are still alive; if they are not, it will be simpler to track down their heirs than the heirs of those who passed away one hundred or more years ago.

The primary downside of returning to T3 is the unfairness of the extant property distribution.  T3 marked the advent of colonialism, which forced Africans into economic and political subordination.  Returning to T3 would ignore the injustices of colonialism, cement the consequent illegitimate eco­nomic gains accrued by whites, and likely erect a permanent color hier­archy in Naiku.  Most importantly, the African majority could resist (if not violently rebel against) a return to T3 because that property status quo was unfair and illegitimate.  Leonid Polishchuk argues that “if private property rights are not sufficiently broadly recognized in the society as legitimate and fair, it makes the property rights regime unstable.  This instability precludes efficient relocation of assets, and as a result expected efficiency gains of private ownership fail to materialize.”^[57] If Naiku wants its system of private property to thrive, the option of returning to T3 is not feasible.

C.       Option Three: Creating a New Property Status Quo

If implemented correctly, creating a new property status quo has the poten­tial to level the playing field, to equalize wealth, and to promote stability.^[58] The state can implement wealth redistribution through the tax and transfer system or by redistributing real property through land equalization, a concept that I develop in this Subpart.

1.       Tax and Transfer

Louis Kaplow and Steven Shavell argue that “redistribution through legal rules offers no advantage over redistribution through the income tax system and typically is less efficient.”^[59] Through the tax and transfer system, the gov­ernment can broadly reallocate wealth from more financially astute citizens to those with greater financial vulnerability.  Redistribution through taxation could include wealth in the form of real, personal, and intangible property, which would allow Naiku to move beyond the narrow problem of land dispos­session and to address the larger problem of asset inequality.  This is a particularly attractive remedy for nations that have moved from an agrarian-based economy, in which access to land is vital, to an industry- or services-based economy, in which access to land is less important.^[60]

Taxation is not a perfect solution, however.  First, many transitional states have weak tax bureaucracies that are not effectively able to collect taxes and to transfer them to beneficiaries in the form of cash payments or social pro­grams.^[61] Second, higher taxation gives the wealthy an incentive to transfer wealth outside of the country and can dampen the incentives to create wealth domes­tically.^[62] Third, while a reparations or restoration program mandates a one-time asset transfer to beneficiaries, tax and transfer programs redistribute wealth gradually, leaving beneficiaries vulnerable to changing political winds over time.^[63] Layla’s government has an incentive to announce a substantial tax and transfer program to quell present discontent concerning land inequality.  But, while her political administration may be genuinely committed to cor­recting past wrongs using redistributive programs, future administrations may neglect such programs or cancel them altogether.^[64]

This is the problem of time inconsistency: A present promise of future performance will not necessarily be honored.  Time inconsistency is more likely to be a problem when beneficiaries constitute a politically powerless group because they cannot use the political system to influence future admini­stra­tions to continue tax and transfer programs.  But, problems associated with time incon­sistency can even affect politically powerful groups like the Alieu in certain instances.  For example, in some countries, international economic organi­za­tions, such as the International Monetary Fund, pressure local politi­cians to drastically reduce government spending in order to balance the country’s budgets and thereby increase their capacity to repay international loans.^[65] This coercion reduces the amount of funds available for use in the state’s redis­tributive programs.

A fourth problem with taxation is that tax and transfer programs will not be sufficient in certain states because the novel attributes of land make its actual transfer essential.  In his empirical evaluation of public opinion related to land in South Africa, James Gibson found that “70% . . . of African respon­dents . . . agreed that ‘Land is special: Having land is more important than having money.’”^[66] Land is special because it often has an unquantifiable cultural value that derives from the key role it plays in individual and group identity.  Communities are often spiritually and emotionally tied to the land where their ancestors are buried.^[67] As a result, although a group or individual may have been dispossessed long ago, dispossessed owners can still have a deep cultural connection to particular parcels of land that does not erode with the passage of time.  Land is also unique because it is a highly visible sign of wealth; as a result, perceptions about inequality may not shift without the significant transfer of real property.^[68] Additionally, land is special because it is the basis of sovereignty.  If an oppressed indigenous majority does not reclaim land that was unjustly dispossessed by its colonizers, political inde­pend­ence can ring hollow.^[69] Finally, in some societies, land is the most important means of produc­tion, making access to land the primary way to counteract poverty and marginalization.^[70] Therefore, while some states can address inequal­ity resulting from past land theft through tax and transfer programs, others require land redistribution.

2.       Land Redistribution

At T5, the government of Naiku can choose not to pursue a reparations or restoration program and thus dispense with the work of identifying who owned or occupied particular land parcels and the work of locating their heirs.  Naiku’s government can instead implement a program to redistribute real property that is not focused on vindicating past rights in land.  The objective of land redis­tribution in Naiku would be to provide greater access to land based on an individual’s current socioeconomic status or membership in a previously disadvantaged group.  For example, in the redistributive prong of South Africa’s land reform strategy—the Land Redistribution for Agricultural Development (LRAD) program—a citizen can qualify for a state grant to purchase land if he or she is an adult from a previously disadvantaged group who intends to engage in full-time farming and can contribute a minimum of R5,000 ($665) towards the acquisition.^[71] To secure land for redistribution, the state can either rely on willing sellers to whom the state pays a mutually agreed-upon price, or in the alternative, it can rely on eminent domain.  In the latter case, the state determines the amount of just compensation given the circumstances, and the landowner has the right to appeal to the courts if she thinks the amount is inadequate.

Land equalization is a specialized type of land redistribution program that is best suited for societies in which land is a key economic commodity and in which historical injustice has led to multiple ownership claims to the vast majority of the nation’s land parcels.  It is a way for a society to wipe the land ownership slate clean and start over.  Land equalization places individuals and corporations on equal footing without heeding the Marxist call to abolish all private property.

The difference between land equalization and taxation is that the former focuses on the redistribution of land rather than all wealth.  In addition, land equalization mitigates time inconsistency concerns by delivering benefits to individuals and communities in a shorter timeframe.  The most important dif­ference between land equalization and land redistribution is their respective moral starting points.  The starting point for land equalization is that everyone is entitled only to his or her fair share of land.  Under land redistribution, the state assumes current owners are entitled to their current land holdings, so to acquire their land, the state must wait for current owners to willingly sell their land, or the state can invoke eminent domain and pay the current owners just compensation.

A system of land equalization in Naiku might look like this: Every citizen who reaches the age of eighteen by a certain date will be allocated a certain number of points, and each point is worth a certain amount of money.  The primary caretakers for people under the age of eighteen will qualify for a set amount of additional points per dependent.  The government and corporations will also receive predetermined amounts of points.  Through a participatory process involving government, civil society, and international experts, Naiku will devise a system by which each parcel of land, both publicly and privately owned, will be assigned a certain number of points based on its value.  This determination will account for factors such as the price paid, fair market value, existing improvements, circumstances of acquisition, and the strategic impor­tance of the land.  These factors will ensure that land acquired in good faith is treated differently than land that was transferred under dubious circumstances.

Imagine that Naiku decides to allocate 100 points to each citizen.  If X presently owns land worth 150 points, then she has two choices.  She can either pay for the 50 points that she holds in excess of her 100 point alloca­tion or relinquish her title to land worth 50 points in order to bring her land worth down to 100.  In either case, to increase accountability, the money or land would be deposited into an internationally monitored land redistri­bution account.  A corporation should receive points based on its contribution to soci­ety (determined by the number of people it formally employs, the amount of money invested in society, etc.); unlike individuals, corporations could not receive money from the redistribution account but would be required to pay into it.^[72]

In contrast, if Y owns land worth 25 points, she can take a cash or an in-kind payment worth 75 points, acquire land worth 75 points, or receive some combination of both from the redistribution account in order to raise her point total to the allocated 100.  In-kind payments are crucial to land equali­zation because the process of choosing from a wide array of viable options makes citizens active agents in the process of transformation.^[73] All in-kind payment options would have predetermined point allocations and could include things like specialized vocational training, higher education for two genera­tions, priority in an existing housing program, and access to subsidized credit.^[74] The list of in-kind payments would have to be tailored to the abilities of the gov­ernment and the needs of its people.^[75]

The land equalization process would unfold in two rounds.  The purpose of the first round would be to build up the redistribution account.  Private citi­zens who own property in excess of 100 points would decide whether to place land or money into the redistribution account, and the government and corpo­rations would place land in excess of their predetermined allocation of points into the account as well.  In the second round of the process, the state would dis­trib­ute land, money, and in-kind payments to those with less than 100 points.  A national lottery would determine the order in which people spent their points.  After the initial allocation of property rights through the point system, there would be no restraints on alienation, so people would then be free to trade at will.

Land equalization’s main strength is its potential to reorder the property status quo and to level the playing field.^[76] It is not designed to restore a prior status quo, so those who have never owned land are not excluded from the redistributive program as they are in restoration or reparations programs.  A shortcoming shared by both land equalization and land redistribution pro­grams is that wealth accumulated as a result of past land theft can be transferred to non-land-based investments such as securities, thereby achieving land ownership equity, but not asset equity.^[77] Consequently, the state should implement tax and transfer programs alongside land equalization and redis­tribution programs.

III.    The Process of Choosing From the Available Options

I have discussed the options available to Naiku and other states that have the political will to address past property theft.  In this Part, I will argue that the process a state uses to choose between the available options is vitally important.  More specifically, I argue that when choosing between options, the state should use a highly participatory process involving a broad swath of the pol­ity because this will increase the perceived and actual legitimacy of the resulting property status quo.  As it stands now, groups of elites often decide how states address past theft.

For example, in South Africa’s Land Restitution Program, both the deci­sion to compensate only those who were dispossessed of a right in land after 1913, as well as the process the state would use to compensate citizens, were made primarily with the involvement of political parties and experts with limited direct consultation of average citizens.^[78] Likewise, in Kosovo, the deci­sion to provide restitution in-kind or compensation only to persons dispossessed between March 23, 1989, and March 24, 1999, was made by international actors, with limited involvement of average citizens. ^[79]

States that limit the participation of average citizens in their deci­sionmak­ing processes fail to avail themselves of several advantages of broad participation.  First, because one primary purpose of addressing past theft is to increase the legitimacy of the state and present property arrangements, curtailing public participation in the process can place the perceived legiti­macy of the program at risk.  The evidence shows that people are likely to believe that the outcome of a legal process is legitimate even if it is unfavorable to them, as long as the process involved fair procedures and was conducted by the appropriate authori­ties;^[80] Tom Tyler and others have proven that “the opportunity to express one’s opinions and arguments, the chance to tell one’s own side of the story, is a potent factor in enhancing the experience of procedural justice, even when the opportunity for expression really accom­plishes nothing outside the proce­dural relationship.”^[81]

Second, true participation results in the devolution of power to average citi­zens and hence serves as a check on the power of traditional deci­sionmak­ers.  For example, if the process is transparent and highly participatory, it is more difficult for program administrators to perform corrupt acts because people have been allowed behind the closed doors and are actively watching.  Third, a public conversation can help to ground citizens’ expectations in reality.  Some transitional states cannot afford to give everyone compensa­tion, so the public con­ver­sation can provide people with information about exactly what resources are available and what programs the state can offer given its lim­ited resources.  Fourth, direct citizen participation introduces a unique perspective not available when the decisionmaking process is dominated by elites.  A broadly representative group of people is better suited than elites to know the population’s preferences.  Lastly, democracy is strengthened when people partici­pate in deciding issues that directly affect them.^[82]

When states decide to address past theft through an inclusive, highly partici­patory process, they must be ready to navigate around several poten­tial pitfalls.  First, the process can become time-consuming given the number of people who should be involved and the challenges of synthesizing the infor­mation received.  But, by investing time in participatory procedures on the front end, the state can receive the dividends in the form of increased legiti­macy at the back end. ^[83] Second, meaningful public participation requires significant resources that many cash-strapped transitional states cannot provide.  Thus, it is crucial for states to involve civil society and interna­tional organi­zations in managing the process, which can reduce state expenditures and increase transparency.  A third potential drawback of a highly partici­patory process is the difficulty of facilitating a conversation that adequately balances participation and deliberation precisely because participation has the potential to undermine deliberation.  A common solution to the deliberation-participation paradox is for the organizing entity to choose community representatives.^[84] But, there is no guarantee that the people the entity chooses will be accountable to, or representative of, the larger public.

Fourth, a public conversation about past property theft could serve to inflame extant divisions and ethnic- or religious-based hatred lurking just below the surface.  But, it is not necessarily bad that talking about past injus­tices has the potential to cause latent animosities to boil up to the surface, so long as the conversation leads to a solution that will assuage the ethnic rancor moving forward.  Fifth, the very concern a public conversation is intended to address—a lack of legitimacy—may prevent people from participating in the decisionmaking process.  If people are discontent because of an illegitimate property distribution, this could result in apathy and disengagement rather than a determination to find a solution.  Lastly, and most problematically, even if a state manages to facilitate a meaningful public conversation, there is no guar­antee that the output of the conversation will affect the ultimate decision.  The entire process can devolve into a propaganda campaign designed to give the illusion of power sharing when in actuality the state is carrying on with business as usual, and the decisions are being made by those in power with no regard for what average citizens desire.^[85]

While the importance of involving the public in the political deci­sionmaking process is largely undisputed in the literature,^[86] the level of control the public should have in the decisionmaking process is a very controversial matter.  At the very basic level of participation, power holders aim to educate the public about options, rights, and responsibilities, but information flows in one direction.^[87] This is not true participation.  A moder­ate participation level involves token participation from certain stakeholders who are informed or consulted, but the present power holders are not forced or inclined to truly integrate the knowledge and suggestions of these partici­pants.^[88] Alterna­tively, a few handpicked citizens who are not accountable to their communities may be invited to join a decisionmaking body.  In both situations, the commu­nity has no true opportunity to decide.  A high partici­pation level is achieved when participants exercise a significant amount of control over both the process and outcome;^[89] this is the type of public participation envisioned in this Article.

To achieve a high participation level, a state must use a bottom-up approach for defining the relevant public groups, which may include stakeholders such as political parties, bureaucrats, community organizations, average citizens, and experts.^[90] To ensure significant buy-in, the state must include both organized groups and citizens not affiliated with particular groups.^[91] The end goal is to make the final decision about how to address past property violations in collaboration with a diverse, representative group of citizens.

Conclusion

One of the most important issues facing transitional states is what they should do about past property violations.  There is, however, a paucity of schol­arship that explores the options a transitional state has.  I examined the potential courses of action for a hypothetical country called Naiku in order to highlight the challenges many transitional states confront.  Countries like Naiku, with the political will to address past land theft, have three options: (1) maintaining the present property status quo, (2) fully or partially returning to a prior property status quo, or (3) creating a new property status quo alto­gether.  The main conclusion of this Article is that no matter which option a transitional state chooses, its decisionmaking process is crucial.  Ensuring legiti­macy and lasting results requires a well-informed, inclusive public dialogue rather than a less time-consuming, less costly process involving only elites.

For example, a state may decide to maintain the current property status quo because it does not have the bureaucratic capacity to redistribute property.  While this is an important decision, what is more important is the participa­tory nature of the decisionmaking process.  If the property status quo has been sullied by asset-based inequalities resulting, in large part, from past land dispos­session, then a top-down decision not to reorder property arrangements can result in widespread resentment and feelings of injustice.  In contrast, if the deci­sion is a result of a highly inclusive, public dialogue, studies show that the population will likely perceive it as just.^[92]

In sum, this Article aims to further the literature about how transitional states can deal with past property violations.  While I created the nation of Naiku to streamline the discussion, the problems that Naiku faces are very real and deserve further intellectual inquiry.