The Political Economy of Market-Based Land Reform

The paper uses a political economy approach to examine the post-1980 shift in land tenure policy away from redistributive land reform. The focus is on the perceptible change in development objectives and policy instruments from the rapid reduction in rural poverty and land concentration through government intervention toward a market-based transfer of land property rights, with emphasis on resource use efficiency and output growth, irrespective of distributional consequences. Based on empirical evidence, the paper presents a quantitative examination of the extent and pace of change in poverty levels, landlessness, food production and inequality in the size distribution of land.

The discussion is divided into five main sections. Sections I and II define key terms and present basic principles of policy choice and access to land. In Section III, these principles are applied to country-specific experiences within a historical context. With regard to the implementation of market-based land reform, the experiences of Brazil, Colombia, Kenya, the Philippines and South Africa are briefly reviewed, followed by an assessment of the effects of the privatization of customary land tenure on food production and land concentration in Côte d’Ivoire, Malawi and Uganda. The implementation of these market-based programmes is viewed as part of the market liberalization and structural adjustment policies of the World Bank and the International Monetary Fund (IMF) associated with heavy foreign debts. Available data indicate increasing inequalities, and falling food production and average daily calorie consumption per person in most sub-Saharan African countries where ownership of communal lands has been privatized. Empirical evidence also suggests that most of the buyers of land are politicians, senior government officials and urban land speculators, all of whom know the law and registration procedures, and have contacts with credit institutions and land surveyors.

Section IV addresses two critical questions. First, if the present trends in market-based access to land were to continue into the twenty-first century, what would be the prospects for the hundreds of millions of landless and near-landless rural poor? And second, can a wage-dependent landless worker purchase land in his or her lifetime? How long would the worker need to save all or part of his or her daily wage in order to purchase land in the open market? Empirical evidence suggests that opportunities to buy land through the market are virtually nonexistent, owing to (i) the downward trend in cropland availability per working person in agriculture, especially between 1980 and 1996, due to rapid urbanization and budget cuts in public spending for irrigation; (ii) inflated land-sale prices combined with falling daily wages in real terms and increases in the cost of living; (iii) the increasing demand for land—which is viewed in this paper not as a commodity or as a factor of production, but as a unique social amenity (a secure form of holding wealth, and of gaining social and political advantages and family food security); and (iv) the impossibility of obtaining land mortgages and the high risk of lending capital to landless workers and asset-poor peasants.

In Section V, it is argued that the land market has special socio-political aspects that require a different mode of analysis. Some assumptions behind the land market approach are challenged, particularly the view of the land market as a culturally isolated economic mechanism serving to equilibrate supply and demand. Some ways are proposed for making the land market approach workable and socially acceptable, bearing in mind the alarming statistics of increasing numbers of rural poor, landless workers and undernourished children, especially in the Middle East and sub-Saharan Africa.