Erik Stubkjær, Prof. emer.

The Emergence of Real Property Rights in Denmark – A case of path dependent institutional change Erik Stubkjær, Prof. emer. Department of Development and Planning, LMGI Aalborg University, Denmark Inaugural WINIR Conference, 11-14 September 2014 Old Royal Naval College, Greenwich, London, UK Session P1.3 – The Meaning and Relevance of Property Rights

Overview • Main events establishing Danish Real Property Rights • Methodology, based on Mahoney, 2000: Path Dependence in Historical Sociology • The Danish events and their aspiration • The liberation of serfs in late 18th century, inthe terms of the time, and iterated in Danish history • In the conceptualization of Mahoney • Self-reinforcing patterns at work, fostering ‘Denmark’ • Reflections and Conclusion Stubkjær@WINIR2014_P1.3

1. Real property rights in Denmark Stubkjær@WINIR2014_P1.3

.., but alsoinfringed upon Stubkjær@WINIR2014_P1.3

Expansion of individual property rights Three phases: Land reform 1750s - 1810s: Serfs becoming freehold farmers of about 60% of a total of 60.000 holdings Smallholder movement 1899-1950: Farm workers becoming smallholders, partly established on former manor farm land Construction boom 1960-1975: Blue-collar workers and middle class settle in detached houses. In 2001, 1.1 mio homes individually owned; total population 5.3 mio Stubkjær@WINIR2014_P1.3

2. Methodology According to Mahoney, 2000, path dependence request the specification of: Initial conditions, with multiple options A critical juncture, contingent on previous events, and Self-reinforcement of the new arrangement with explanation of institutional reproduction: Utilitarian, functional, power, or legitimation explanation Stubkjær@WINIR2014_P1.3

…stated in 1792-terms on the ‘Liberation Column’: 3. The new institutional arrangement For Christian the Seventh, the King of Denmark and Norway, from united and grateful citizens: The King ordered that adscription should cease and land laws be given order and strength, that the free peasant may become spirited and enlightened, diligent and good, honest citizen, happy. The King recognised that the freedom of the citizen, determined by just law, gives love of the fatherland, courage to defend it, a desire for knowledge, an attraction to industry, the hope of good fortune The foundation stone was laid by Frederik, the King's son, the friend of the people, MDCCXCII Celebrated 1938

The new institutional arrangement ... in Mahoney’s terms: 1. Initial conditions: New farming technology and systems of crop rotation provided options for new arrangements in North Europe. Danish adoption from among two or more alternatives: England -> enclosure; Prussia -> no serf freedom, postponed to 19th century Denmark -> land reform with serf freedom late 18th century Stubkjær@WINIR2014_P1.3

The new institutional arrangement ... in Mahoney’s terms: 2. contingent on previous events: Efficient management of crown land and, from 1536, former church land. A chancellery largely committed to impartial service. Taxation, based on rules and ledgers (‘Old’ cadastre, 1688). Codification of law into Danish Code 1683, among others stating the legal capacity of the citizen (Notary not needed). Priests proclaimed to villagers both spiritual and temporal world order, e.g. statutory orders. Emerging general education, focusing on catechism (child of God, subject of monarch, moral self), reading and writing. Princess-schools 1719. First schoolbook: ABC, 1731. Stubkjær@WINIR2014_P1.3

The new institutional arrangement .. in Mahoney’s terms: 3. Self-reinforcement: The Danish arrangement was installed by the Crown (and leading nobles), but self-reinforcement was eventually maintained by the ‘free peasants’ and ‘honest citizens’, I claim these rules account for institutional reproduction: The elite invites its able dependents to participation The invited/ empowered engage with ‘neighbours’ to solve local problems through incorporated (not-for-profit) associations and/or by minor institutional betterment State engages in problem analysis, yet facilitates local problem solving: ‘Principle of subsidiarity’, or ‘Leave it to the locals’ Stubkjær@WINIR2014_P1.3

The new institutional arrangement ... 4. Explanations of institutional reproduction Utilitarian? Condition, rather than driver Functional? Yes, each body part engages towards a flourishing Denmark Power? Yes, but not a stable, primary cause Legitimation? Yes. Each is called upon by the highest authority to ‘find in their self a desire and incentive to apply their time and effort to respond to the mentioned issues’ 1768 Stubkjær@WINIR2014_P1.3

4. Self-reinforcing patterns at work 4.a The elite invites its dependents: Lord Steward Adam GottlobMoltke 1755: Write me, and I will publish ideas which may contribute to the flourishing of our kingdom Liberating land reform projects initiated 1750s.. Agricultural College/Department 1768: Iterates in the name of the king the invitation to the public, prize for best and publishing offered Establishment of Provisory Assemblies of the Estates of the Realm, from 1834; replaced by Parliament from 1849 Stubkjær@WINIR2014_P1.3

Invitation .. ‘to anyone who loves and is concerned of the advancement of the fatherland’ Stubkjær@WINIR2014_P1.3

4.b The invited create new associations • Savings banks and mortgage credit (borrowers’) associations developed from 1850s. The latter specialized in terms of region and type of real property • When railways and steam ships changed the market in agricultural products, local associations established dairies and slaughterhouses, substantially from 1880s • General consequences of being invited/ empowered: • Brings a sense of community, of mutual trust: Engaged in the shared project of improving (an aspect of) the kingdom • Familiarity with the handling of rules (articles, division of tasks, ..): Draft them, obey them, or change them orderly, e.g. to streamline processes Stubkjær@WINIR2014_P1.3

.c State applies ‘Principle of Subsidiarity’ The land reform was implemented through procedure rules (1783), which were locally applied at the discretion of the village community, who paid the surveying and land assessment costs. The creation of mortgage credit associations was facilitated by a statutory act of 1850. Mortgage Institutions were locally organized as not-for-profit borrower associations (1850-2003), implying that loans for ordinary owners were available at the conditions of the capital market (bypassing bank surcharges) State agency tasks were transferred to municipalities during 20th century, incl. spatial planning. Municipalities developed land for housing. This was unconstitutional, as not being requested by law. Legal scholarship invented the notion of ‘municipal power’ (Da: Kommunalfuldmagten) Stubkjær@WINIR2014_P1.3

5.1 Reflections Role of market? Of cause, but changes were cast in existential, not in economic/ utilitarian terms, e.g. ‘free peasant .. diligent and good, honest citizen, happy’. Role of property rights, title and mortgage? Indeed, but ‘integration of the poor’ (de Soto, 2000), including access to real property, was primarily obtained through empowerment, association building, and general education. Stubkjær@WINIR2014_P1.3

5.2 Conclusion About year 2000 • A new institutional arrangement and its path of dependency was outlined. Traditional narrative, but new conceptualization of change: • Previous events, critical juncture, and reinforcement patterns were identified • Institutional reproduction is claimed to be largely due to a normative explanation: • Those in power invite their dependents to discuss next steps • Being entitled, let’s address our problem and share the burden by inviting ‘neighbours’ to create an association / streamline processes • The state is concerned and applies the Principle of Subsidiarity Stubkjær@WINIR2014_P1.3

Erik Stubkjær, Prof. emer.