Is Land Reform Viable Under Democratic Capitalism?
This paper questions the general policy presumption in favor of land reform that has existed since the start of Development Economics as a discipline. In practice, even if there is an economic argument for land reform it is not worth following up. First, because the law will be diluted before passage and sabotaged in execution. Secondly, because agriculture is such a small sector of the economy it may not be worth the effort. Long experience shows that successful land reforms require attention to three factors: speed, compensation, and support; speed in enforcement, low compensation to landlords and extended support for the beneficiaries. These three objectives cannot be reasonably expected of democratic governments. Now consider the economic argument for land reform . Does land reform furthers growth most effectively. Perhaps this follows from the claim that smaller farms are more productive. Then why do landlords not break up large units into smaller ones? If they do not see their self-interest clearly, why can they not be shown their self-interest through taxation? Often the argument boils down to a defense of land reform as a political or social end. This is fine, since political and social goals are often more important than economic ones. But these non‑economic objectives have to be explicitly recognized because there may be more direct and effective ways of achieving the non‑economic objectives than land reform. This paper is written to justify the above claims and to explain briefly how a contrary view has come to dominate the literature.
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updated May 22, 2002 by Linda Huff
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