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Sunday, 3 January 2010

Chiefs and the economy : An Economic Institution

The starting point for understanding the role of chiefs in economic development is appreciating that the chieftaincy is inherently an “economic institution”. That is to say that the chieftaincy provides the basic foundation for economic activities in areas under traditional jurisdiction.Chiefs are to all intents and purposes as economic as any government, although the scope and depth of their reach is naturally restricted by historic and social factors. We have touched on this both here and here.

This observation becomes obvious when we consider that a foundational part of the operation of the local economy, indeed any economy, is the existence of social order that allows citizens and other "economic units" to conduct their economic affairs unhindered or in safety and security. In developed countries, social order is principally maintained through formal government structures. In Zambia, and much of Africa, the majority of people live in remote rural areas where the reach of state institutions is minimal or at best absent. To resolve ambiguities in social rules, rural dwellers typically do not rely on the government sanctioned system of social order, at least not primarily, but rather than on the local chieftaincy or other traditional organisations (as was the case in some parts of Zambia before "chiefs" as currently were imposed by colonialism). These essentially constitute village elders and tribal chiefs who collectively maintain and disperse “customary” governance.

The chieftaincy therefore serves a critical function in promoting economic development, when it fills this critical gap in maintaining social order. Equally the chieftaincy may be seen to stand in the way of "economic development" where it's system of administration appears to restrict the expansion of stronger reforms of social order e.g. expansion of formal state structures with greater accountability, all things being equal.It goes without saying that the existence of traditional authorities is essentially a function of history and current demand for their services. That chiefs exist is clearly because their existence is "demanded". Or to put it differently, chiefs locally exist for the similar reasons that national governments exist- namely as a solution to the "collectivism problem". The negative effects are therefore minimal given the counter-factual is “no – order” at all. If chiefs don’t provide local governance or maintain social order the government would not immediately fill the gap. The result would be break down in social order with minimal economic activity nor is there any guarantee that such an outcome would necessarily be superior to the current situation.

A key aspect of maintaining social order is the provision of a legal system that allows for resolving disputes and provides for protection of societal rights as "naturally" and socially conferred. By fostering justice, dispute resolution mechanisms reduce the prevalence of crime and insecurity which keeps vulnerable groups and people in position of dependency and poverty.

Prior to independence traditional and native courts were the main providers of legal justice. As part of Zambianisation of the new institutions (without indigenisation), the post independence government abolished the existing native authorities and local administration were stripped of most of its predecessor's functions, which were distributed among central government ministries and their agencies. A key part of this was that the Local Courts Department of the Ministry of Justice took over the reorganization and running of the old Native Authority courts. Similarly, responsibility for law and order was devolved on the police, although local authorities retained a small force of constables to assist in the enforcement of council bye-laws.

But it was in the area of court administration were significant problems emerged which has continued to fuel significant demand for customary justice as mediated through traditional courts. This demand has principally emerged from two critical sources : insufficient capacity by central government to provide appropriate court capacity and necessarily expertise to adjudicate cases. This is despite the fact that traditional courts (and customary laws) have no formal status and exist parallel to the formal legal system.

Local courts run by central government officers have been ineffective in administering justice. They lack both the knowledge of customary law of tribal chiefs and the respect given to traditional leaders. The local courts are the lowest courts of the formal system but share a common jurisdiction in customary law matters with the unrecognised chief’s courts. This lack of respect for the local courts has driven people to constantly resort to traditional courts.

It could also be argued that traditional law mediated through the traditional courts is inherently superior to our setting. Although English law provides the main foundation for the national system, it is effectively alien to the majority of our people. This is largely because it is not fully embedded in the customs and tradition of many of our traditional societies. But also because it is complex, technical and expensive for local citizens individuals to understand. For ordinary people it is inaccessible and usually with cases conducted in a language they do not understand. Traditional courts potentially offer a solution to these many challenges, which has ensured their continued use.

There are two additional factors working in favour of traditional courts.

First, customary laws have a strong advantage of having never been unified or codified, with the application of the exact law depending on the tribal region concerned, as well as the authority administering it. Whilst this may impose "transaction costs", with limited rural mobility this has not be a problem (unless it can be demonstrated that these laws do prevent rural mobility). In fact the diversity of laws is one of the great benefits of traditional justice. Since it is not written it can evolve with the needs of communities at a local level.

Secondly, customary laws also incorporates strong mediation and restorative elements: compensation can be paid to the wronged and reconciliation is emphasised within a framework in which the entire community is engaged. These elements are in tune with local traditional culture and especially suitable for non-criminal dispute.

Linked to dispute resolution is the traditional authorities maintenance of law and order through direct provision of “policing services”. The Chiefs Act (1965) which defines the role of chiefs also places a significant responsibility on chiefs to maintain public order in their area of influence. It requires them “to preserve the public peace in his area and to take reasonable measures to quell any riot, affray or similar disorder which may occur in that area”. Presumably the idea was for the Chief to rely on the “ba kapaso” (messengers), however in recent times Chiefs have often been forced to “contract out” these services.

Not long ago Chieftainess Mwenda of Mazabuka hired four retired Police officers in her chiefdom to train 14 vigilantes whose duties will be among other things to maintain law and order in the chiefdom. Her Royal Highness has taken such steps because Police in Mazabuka have lamentably failed to provide security to her subjects: ''There is lawlessness in my chiefdom. I can’t trust Police in Mazabuka to protect lives and property of my subjects, so these vigilantes will assume the role of police”. Such actions are only too common in the absence of ineffective centrally provided police services.

As initially hinted, the provision of “social order” is the foundation for local economic life. However, there are other ways in which chiefs shape the scope and nature of economic activity. A crucial element is the control of the factors of production or strategic resources. In rural areas this are principally land (and including water sources).

Land is a critical factor and one which gives chiefs significant de-facto power. No land, no chief. Zambia inherited four categories of land in 1964: State Land (formerly Crown Land); Freehold Land; Reserves and Trust Land. But this changed after independence, when chiefs were relieved of their de jure responsibilities for land allocation. The Land (Conversion of Titles) Act (1975), vested all land in Zambia in the hands of the President, to be held by him in perpetuity on behalf of the people of Zambia. Freehold land held by commercial farmers was converted into leaseholds for 100 years and un-utilised tracts of land were taken over by the state. Freehold titles in residential areas were similarly treated. All sales of land per se (excepting the developments on the land such as buildings, farm infrastructure, etc.) were prohibited.

However, in spite of these legislative changes, chiefs’ de facto position remained broadly unchanged as they were not replaced by effective structures. Indeed, in 1985, partly to gain favour with the chiefs and partly in recognition of their custodianship of customary law and rights, government decided that the chiefs ought to be formally consulted when customary land was being granted for leasehold purposes. These powers are confirmed by the Lands Act (1995), which continues to be the substantive land law in place. A significant concession considering customary land accounts for 94% of the land, giving chiefs significant amount of economic (and political) influence. This power is often leveraged through the way chiefs allocate land.

Historically, chiefs did not allot the land directly to their subjects who used it. Rather, land was allocated to sub-chiefs who in turn allotted shares to village headmen. The headman then allotted land to heads of subsections or heads of families and they distributed the land to their dependants. Each of the persons granted land in this way was therefore sort of secure in his rights and could not be expropriated without fault. He could transmit his rights to heirs, but could not transfer them to anyone else without the permission of his seniors. If rights are vacated they rest in the next senior in the hierarchy. In many parts of Zambia, this practice continues but increasingly, with the lure of cash from “foreign investors”, have led chiefs to more direct allotment. The lure of men in brief cases has clearly turned out to be too hard for the existing system to resist. Why let the headman take the bait when you can do it yourself? With that closer involvement chiefs have become even more influential in direct economic fortunes of their subjects, and indeed the nation at large.

The other thing it has done of course is given some chiefs opportunities to change their own economic standing. This becomes self-evident when we observe the main land and succession disputes ravaging various chiefdoms. The increasing lucrative nature of land has increased the attractive of chieftainship and the desire for some chiefs to go beyond their existing boundaries.

Significant succession disputes have developed, with anyone with a hint of royal connection seeking to be a chief. The current power struggles among chiefs reflect the de-facto power that the Land Act (1995) confers, and the lack of clear territorial boundaries among chiefdoms.

Successive governments have always struggled over the role of the chiefs in land administration and a great deal of ambiguity surrounds their current status. For their part chiefs (and many of their supporters) argue that far from leveraging de-facto economic power, chiefs are the victims. Many argue that chiefs are not well informed about the law and there are many widespread reported incidents of ‘land grabbing’ by government officials. To complicate matters, it appears if customary land is leased and for some reason is repossessed, it no longer falls under the jurisdiction of the chief. Thus it would seem that once land is granted in leasehold, all customary rights to that land are extinguished and so is the authority of the chief over that land.

Taken on the balance, there had certain be some erosion of their power but by and large chiefs continue to shape economic fortunes of their locals through land administration. This occurs through providing land directly and accommodating foreign investors. But it also occurs through chiefs themselves using the land to undertake productive activities. The extent to which that happen depends on another critical factor they possess more than individual subjects : financial capital.

As we discussed in Chiefs in colonial Zambia local chiefs and their officers in the Native Authorities used Native Treasuries to enrich themselves. The revenue from the treasuries became sources of capital which they invested in productive ventures (and presumably non-productive as well, though this aspect is not well documented in Zambia). The investment patterns generally tended to follow regional specialisation. Although these privileges have somewhat diminished, chiefs maintain preferential access to significant revenue through their ability to use royal influence to exact concessions from investors and other tributes given to them. Chiefs also benefit from significant privileges as conferred by the state. These include motor vehicles, subsidies and other financial inducements.

An equally important dimension is that chiefs also act as informal magnets for investment. Chiefs provide an immediate solution to the collectivism problem in the local economic sphere, by virtue of their position. Chiefs are able to get rural dwellers to pool credit together for common investments. Crucially they can also act as conduits for building investment alliances across tribal areas, helping overcome coordination failures and enhance economies of scale. This is especially the case for large scale investments traversing various local boundaries.

The discussion above suggests that the general relationship between chiefs and the local economy can be viewed in two ways. First, chiefs are intrinsically embedded in the system as social actors as they provide the basis for economic activity through mediation of social order in face of the short or ineffective arm of central government. Secondly, chiefs are also active players in shaping the nature of the ensuing economic activity through access to factors of production and financial capital. These observations lend weight to an important observation. Traditional authorities are a broader part of our legal and economic system, as embedded through history, culture and practical realities on the ground. Many of the benefits local people enjoy from social order and economic well being is derived from this. Viewed in the best light, they provide an opportunity for government to work with to improve our local judicial systems and enshrine further rule of law that supports wider societal goals.

In the next post in this series, we'll examine the extent to which chiefs are actively engaging in entrepreneurial activities.

Previous posts in this series :

Chiefs in Colonial Zambia
Chiefs and the Law in independent Zambia
Chiefs and Politics (1) – The historic lenses
Chiefs and Politics (2) – The rise of political chiefs?
Chiefs and politics (3) – Towards Free Participation?

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