Property Rights for the Rural Poor: The Challenge of Landlessness.

AuthorBryant, Coralie

The debate around the relative roles of markets versus bureaucrats took on renewed life with the end of the Cold War. The public policy debate shifted from focusing on the public sector to emphasizing markets and their ability to innovate, decentralize, use incentives and meet needs more effectively. Yet there remains in this public policy debate a stunning silence about the absence of property rights for the rural poor. This article focuses on the need to put property rights for the rural poor--the need for land reform--back on the international policy agenda. The first half of the article examines current land reform paradigms and looks at what has been learned, focusing on Brazil as a case study The second half of the article moves from what has been done to a discussion of where future research and operational work should go from here.

There are 1.3 billion people around the world who live on less than U.S.$1 a day.(1) Even though urbanization has been one of the major features of development and change in the past decade, the majority of these poor still live in rural areas. Furthermore, there are rural roots to the urban poverty seen in most countries, as those without assets migrate to urban or semi-urban areas searching for work. Thus redistribution of assets is central to long-run progress on reducing poverty in both the city and the countryside. Researchers Michael Lipton and Jacques van der Gaag point out:

For poverty reduction to succeed, the poor need some autochthonous source of income and safety. That is, they need to have an alternative, in the market place and in the polity, not to depend on a patron, monopolist or bureaucrat. Providing the poor with access to productive land is usually regarded as crucial.(2) Land reform is one of the most central steps in this process. The effectiveness of land-reform programs in improving productivity and reducing rural poverty relies on many factors including land quality, access to technology and strong local agricultural markets. However, access to land is the single most important prerequisite for improving economic conditions among the rural poor.

Precisely because of the salience of land reform to the reduction of rural poverty, one of the major recommendations of this paper is that international donors should recommit themselves to land reform and begin financing the analytical work and technical assistance it requires. The current general silence and limited operational programming of donors on land reform exacerbates the rural poverty problem.(3)

CONCEPTUAL FRAMEWORK

Over two decades ago, Peter Dorner, a major authority on land reform, cautioned:

Land reform is so intimately related with the whole development process that one feels the need to deal with issues of development in general as well as with those more specifically identified with land reform. That requires simplification of complex and nationally specific experiences. No single body of theory encompasses all the strategic variables.(4) Dorner's definition of land reform includes measures to redistribute land in favor of peasants and small farmers and "... embraces consolidation and registration in areas where customary tenure is prevalent and also land settlement on new lands."(5) He places an additional emphasis on the need to make changes in tenancy rights.

Each of these aspects goes to the core of rural politics, and nothing about them is easily simplified. Indeed, to think of land reform as only a technocratic or economic problem is a mistake. It is a political economy problem with economic and social consequences amenable to resolution through good technical skills and political change. As such, land reform is a central part of the whole development process.

While development economists and agricultural economists have done most of the conceptual work on land reform, more recently attention has shifted to the ancillary fields of institutional theory (including organization theory), development management and law. Institutions, and their role in setting political and social norms, as well as legal frameworks, are now understood as endogenous, not exogenous, as economists had generally assumed. Economists had not previously thought of institutions as directly and immediately central to achieving land reform. Rather, they assumed that the powerful case for economic efficiency gains would carry the argument to fruition. But in practice, legal, political and social changes proved to be just as important to getting land reform accepted as policy, and crucial to successful implementation.

As Michael Lipton has noted, "land reform, to achieve its aims, requires institutions that render those aims incentive compatible."(6) Equalizing outcomes of factor and product markets provide access to technology and changing power structures through land reform--as property rights for the rural poor--are among these aims. Achieving these objectives requires conceptualizing the endogeneity of institutions. Land policy, like other policies, must be understood by focusing attention on those institutions with the greatest capacity to achieve poverty-reduction goals. Gershon Feder pointed to the need for a new paradigm when he said that most economic analyses omit institutional analyses. He adds that "property rights are an important class of institutional arrangement. Institutions cannot be omitted without seriously distorting the analysis."(7) With this in mind, and in the Brazilian case discussed below, we will turn to an analysis of what kinds of institutions need to be in place in order to effect land reform.

Historically, there have been tensions between neo-classical and structuralist approaches to land reform. Neo-classical economists argue for land reform on the grounds of efficiency and productivity: owner-managed farms use resources more efficiently and are more productive. There is impressive evidence of the inverse relationship between farm size and productivity per hectare.(8) There are fewer economies of scale in farming, especially in food crops, than there are in other sectors. Structuralists argue for land reform on grounds of equity and social justice. For them, land reform changes power relationships as it achieves more productive agriculture. As a result, there are parallel debates between these schools over the role of the state, and hence over how to manage land reform. In addition to the two standard paradigms, a new development paradigm is evolving. This new perspective is detailed in a special issue of World Development edited by de Janvry, Sadoulet and Thorbecke.(9) In a seminal collection of articles, they emphasize the role of institutions in the development model and the need to transform the state into a developmental state.

BACKGROUND

Land reform, in the form of changes in land tenure systems, is centuries old. The disintegration of feudalism ushered in the advent of small holder farming. In more recent times, land reform initiatives have been effective in Japan, South Korea and Kerala in India. For some countries, such as Japan, land reform unleashed new potentials that served to enable subsequent development. Other programs, in Mexico and Bolivia for example, promised far more than they delivered. For much of the late 1950s and in the 1960s, land reform was a major issue for development assistance policy. Analytical work then included discussion of the problem of landlessness.(10) Taiwan and Honduras were targeted for major work. For several other countries, such as Bolivia, Brazil and Indonesia, the problems of landlessness persisted, but neither governments nor donors attempted to address the problem, with the exception of tenancy reforms in Sri Lanka. Some governments that were engaged in land reform, such as Nicaragua, were not given support for political reasons. During the 1970s, the real text for donor engagement in land reform often took the form of opposition through counterinsurgency (e.g. El Salvador). In the 1980s land reform was completely removed from the international policy agenda by conservatives led by Thatcher and Reagan. The problem--the absence of property rights for the rural poor--was neglected.(11) However, in the 1990s there are faint glimmers of a return to issues connected to land reform.

This record of reform success, failure and indifference brings us to the present. In today's world economy, there is more need than ever for land reform. For countries such as Nicaragua, El Salvador, Peru and Brazil in Latin America, and Zimbabwe and South Africa in Africa, the issue is central to much of the domestic political tension.(12) The wars in Central America, especially in El Salvador, Guatemala and Nicaragua, as well as the violence in South Africa and Zimbabwe, were rooted in problems of access to land. However, nowhere more than in South Africa and Brazil is the need for reform more apparent. Post-apartheid South Africa has the greatest inequality in land ownership in the world, with Brazil following right behind.

LANDLESSNESS TODAY

In the late 1970s Cornell University undertook research to document the extent of landlessness and near-landlessness in Latin America and Asia.(13) The Cornell Study defined "landless" as people living in rural areas who do not have ownership or control over land. These people are landless agricultural workers or tenant farmers who earn their living from their labor, or other laborers who reside in rural areas and earn their living from making or selling goods and services. This category also includes pastoralists, nomads, shifting cultivators and scavengers. The near-landless are marginal farmers who may have customary tenure to holdings which are of inadequate size or quality to provide more than subsistence livelihood.

The Cornell study documented staggering numbers of landless and near-landless peoples living in rural areas. Taking the landless and near-landless as a percentage of total rural...

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