Economic implications of inalienable and communal native title: The case of Wik forestry in Australia

Wik people on Cape York Peninsula in Queensland, Australia, have been granted native title over 18,500 km2 of customary land. This was seen as a coup by Wik people and it appears that they have a relatively unencumbered right to manage a large proportion of this land, including for commercial timber production. However, economists of the private property rights tradition are of the view that the inalienable and communal nature of native title presents an obstacle to economic development in remote indigenous communities that will prevent the land from being managed in an economically and ecologically efficient manner, and preclude the land from realising its full market value. This negative view has risen to prominence in Australia and privatisation of the indigenous land estate is being debated. In this paper, it is argued that privatising Australian native title land will not suddenly provide conditions where indigenous enterprise will flourish, nor will it necessarily maximise resource use efficiency where cultural and ecological values are important. For the Wik and other indigenous Australians, factors such as their low Western education and skill levels, poor health, limited financial resources, complex social environment, the remoteness and low productive capacity of their land, and the high importance of non-pecuniary land management objectives, are more important impediments to economic development than the broad type of property right held over natural resources.