Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

New Land Reforms And Their Impacts


Published on

Published in: Technology, Business
  • Be the first to comment

New Land Reforms And Their Impacts

  1. 1. New Land Reforms and Their Impacts Stein Holden EfD-meeting Beijing Nov. 2008
  2. 2. Introduction <ul><li>New land reforms high on the development agenda: </li></ul><ul><ul><li>(High Level) Commission on Legal Empowerment of the Poor </li></ul></ul><ul><ul><li>The World Bank (scaled up financing of land reforms) </li></ul></ul><ul><ul><li>UNHABITAT (Global Land Tools Network) </li></ul></ul><ul><ul><li>MDGs: Rights based approaches </li></ul></ul>
  3. 3. Fundamental characteristics of land <ul><li>Spatially dispersed and immobile </li></ul><ul><li>Low maintenance requirement </li></ul><ul><li>Suitable as collateral </li></ul><ul><li>Essential resource for ag./food production </li></ul><ul><li>Divisible </li></ul><ul><li>No need for land markets unless there are imperfections in markets for non-land factors of production </li></ul>
  4. 4. Some of the issues <ul><li>Are private property rights a preconditions for economic development? </li></ul><ul><ul><li>de Soto, H. 2000. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else . </li></ul></ul><ul><ul><li>de Soto vs. China vs. the current financial crisis </li></ul></ul><ul><li>The relationship between financial markets and property markets/rights </li></ul><ul><ul><li>The Achilles heel of the ”Western” economies </li></ul></ul><ul><ul><li>A source of economic growth and “bubbles” (boom and bust) </li></ul></ul><ul><ul><li>Distress sales and foreclosures during crises: What are appropriate policy responses? </li></ul></ul><ul><li>Effects on and implications for developing countries? </li></ul><ul><ul><li>Formalization of land rights for economic development/Land laws </li></ul></ul><ul><ul><li>How can land certification (or titling) be made more pro-poor? </li></ul></ul><ul><ul><li>How can redistributive land reforms be designed to succeed? </li></ul></ul><ul><ul><li>How can land reforms stimulate more sustainable land use? </li></ul></ul>
  5. 5. The three neoclassical focal points of land reform <ul><li>Tenure security </li></ul><ul><ul><li>Enhance investment </li></ul></ul><ul><li>Transferability </li></ul><ul><ul><li>Gains from trade </li></ul></ul><ul><ul><li>Reallocate land to more efficient users </li></ul></ul><ul><li>Credit access </li></ul><ul><ul><li>Land as collateral </li></ul></ul><ul><li>How important are each of these and are they always achievable? </li></ul>
  6. 6. ” New”(?) dimensions to land reform <ul><li>Legal empowerment of the poor and women </li></ul><ul><ul><li>MDGs: </li></ul></ul><ul><ul><ul><li>Rights-based approaches </li></ul></ul></ul><ul><ul><ul><ul><li>Land as a safety net for the poor </li></ul></ul></ul></ul><ul><ul><ul><li>Focus on empowerment </li></ul></ul></ul><ul><ul><ul><li> Focus on land reforms to achieve MDGs </li></ul></ul></ul><ul><ul><ul><li>Global Land Tools Network (UNHabitat) </li></ul></ul></ul><ul><ul><ul><li>CLEP </li></ul></ul></ul><ul><ul><li>What new dimensions and new impacts become relevant to study? </li></ul></ul>
  7. 7. The evaluation problem <ul><li>A continuum or vector (”bundle”) of land rights </li></ul><ul><li>A vector of outcome or impact indicators </li></ul><ul><li>A set of conditioning factors </li></ul><ul><li>Baseline/Starting point conditions (counterfactual) </li></ul><ul><li>Logic of reform implementation </li></ul><ul><ul><li>Crucial for identification of impacts </li></ul></ul><ul><ul><li>Can researchers influence it? </li></ul></ul><ul><ul><ul><li>Randomized experiments the ideal but often not feasible </li></ul></ul></ul><ul><ul><ul><li>The toolkit for quantitative impact assessment has been improved substantially lately and is crying to be applied to these types of land reform problems </li></ul></ul></ul><ul><ul><ul><li>EfD may help to push this important research agenda! </li></ul></ul></ul><ul><ul><ul><ul><li>New Book +++!? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Benefits from concerted action! </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Visibility </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Policy influence </li></ul></ul></ul></ul></ul>
  8. 8. Old and new land reform approaches <ul><li>Classical land titling reform: Formalizing private property rights to land </li></ul><ul><ul><li>Surveying and titling upon demand </li></ul></ul><ul><ul><li>High tech and high cost approach </li></ul></ul><ul><li>Low-cost land registration and certification </li></ul><ul><ul><li>Broad-based, large-scale implementation with strong local participation </li></ul></ul><ul><ul><li>Low-cost technology approach </li></ul></ul><ul><ul><li>Experimentation with alternative technology approaches </li></ul></ul><ul><li>Removal of restrictions on land markets (restrictions on sales, duration of rental period, price or contract restrictions, area restrictions, outsider restrictions, approval restrictions) </li></ul><ul><li>Formalization of land markets (Rental markets vs. Sales markets) </li></ul><ul><li>Land redistribution policies and projects </li></ul><ul><ul><li>Revolutionary reforms of the past </li></ul></ul><ul><ul><li>Regular redistributions to maintain an egalitarian land distribution (China, Ethiopia, Eritrea) </li></ul></ul><ul><ul><li>” Market-assisted” redistributions in countries with inequitable land distributions (e.g. Brazil, Bolivia, South Africa, Zimbabwe, Malawi, The Philippines) </li></ul></ul><ul><li>Formalization of customary land rights </li></ul><ul><ul><li>Demarcation of village borders and village land use planning </li></ul></ul><ul><ul><li>Issuing of customary land certificates </li></ul></ul><ul><ul><li>Legal recognition of customary land rights </li></ul></ul><ul><li>Legal empowerment of the poor/women </li></ul><ul><ul><li>Conflict resolution systems </li></ul></ul><ul><ul><li>Joint certification of husbands and wives/rights upon divorce or death of spouse </li></ul></ul><ul><ul><li>Regulation of inheritance rights </li></ul></ul><ul><li>Linking rights and obligations: Security of tenure conditional on proper land use </li></ul>
  9. 9. Formalization of land rights vs. Formalization of land transactions <ul><li>Should legal empowerment processes aim to formalize all kinds of rights and transactions? </li></ul><ul><ul><li>What is optimal level of formalization? </li></ul></ul><ul><ul><ul><li>Benefit/cost perspective </li></ul></ul></ul><ul><ul><li>Demand for formalization and distributional implications </li></ul></ul><ul><li> Focus on minimising transaction costs, local administrative capacity, enhancing transparency, enhancing tenure security, protecting the land rights of the poor </li></ul>
  10. 10. Benefits of formalization of land transactions <ul><li>Legal support for conflict resolution </li></ul><ul><li>Prevent illegal transactions </li></ul><ul><li>Protection of poor and vulnerable groups against powerful contract partners </li></ul><ul><li>Ensure more sustainable management of the transacted land for contracts of limited duration </li></ul><ul><li>Provision of registry and national statistics on land transactions for policy analysis purposes, etc. </li></ul><ul><li>Tax base </li></ul><ul><li>Streamlined processes </li></ul>
  11. 11. Costs of formalization of land rental transactions <ul><li>Costs of registration and making it ”complete” </li></ul><ul><ul><li>Such costs can be high if all short-term rental contracts, including sharecropping contracts among neighbours and relatives are to be included </li></ul></ul><ul><ul><li>Capacity, capability and motivation of local administrations may be insufficient </li></ul></ul><ul><li>Costs of ”formal” vs. ”informal” conflict resolution systems </li></ul><ul><li> Formalize only transactions where there is a demand/need </li></ul>
  12. 12. Regulation of land markets? <ul><li>Motives: </li></ul><ul><ul><li>Create a level playing field </li></ul></ul><ul><ul><li>Protect the poor (land as a safety net) </li></ul></ul><ul><li>Many failures in the past, e.g., </li></ul><ul><ul><li>Prohibition of sharecropping </li></ul></ul><ul><ul><li>Prohibition of land sales and rentals </li></ul></ul><ul><ul><ul><li>“ Land to the tiller” </li></ul></ul></ul><ul><ul><ul><li>Distress sales and rentals  landlessness </li></ul></ul></ul><ul><ul><ul><li>Prevent migration to towns </li></ul></ul></ul><ul><ul><li>Restrictions on duration of rental contracts </li></ul></ul><ul><ul><ul><li>Effects on SLM? </li></ul></ul></ul><ul><ul><li>Have not had the wanted/expected effects </li></ul></ul><ul><ul><li> Regulations should be accompanied with careful research to assess the real impacts as these will be context-specific </li></ul></ul>
  13. 13. What are the impacts of land reforms? <ul><li>Types of impacts </li></ul><ul><ul><li>Tenure security </li></ul></ul><ul><ul><ul><li>Investments (e.g. conservation, tree planting) </li></ul></ul></ul><ul><ul><ul><li>Land management </li></ul></ul></ul><ul><ul><ul><li>Land conflicts </li></ul></ul></ul><ul><ul><li>Transferability </li></ul></ul><ul><ul><ul><li>Land market participation </li></ul></ul></ul><ul><ul><ul><li>Efficiency of land use </li></ul></ul></ul><ul><ul><ul><li>Mobility/migration (labor market) </li></ul></ul></ul><ul><ul><ul><li>Land values </li></ul></ul></ul><ul><ul><ul><li>Distributional implications (land, risk/safety net, income, welfare) </li></ul></ul></ul><ul><ul><li>Credit access </li></ul></ul><ul><ul><ul><li>Use of land as collateral </li></ul></ul></ul><ul><ul><li>Legal empowerment </li></ul></ul><ul><ul><ul><li>Poor and vulnerable groups </li></ul></ul></ul><ul><ul><ul><li>Welfare indicators </li></ul></ul></ul><ul><ul><ul><li>Empowerment indicators </li></ul></ul></ul>
  14. 14. Why have many land reforms failed? <ul><li>Land titling in Kenya and Madagascar </li></ul><ul><ul><li>Have not enhanced tenure security, promoted investment, land and credit markets (e.g. Place and Migot-Adholla 1998, Jacoby and Minten 2006,2008) </li></ul></ul><ul><li>Land distributions remain extremely skewed after many years with land redistribution reforms in Latin-American countries, South Africa, Zimbabwe, … </li></ul>
  15. 15. Why have many land reforms failed in Latin America? <ul><li>Emphasis on collective ownership and management after the reform </li></ul><ul><ul><li>Naïve belief in advantages of collective management among radical groups? Collective management has in most cases failed in agricultural production (Eastern Europe, China, Africa, LA) </li></ul></ul><ul><li>Modernization of large farms was used as a requirement not to lose the land </li></ul><ul><ul><li>Naïve belief in economies of scale? Limited EOS in tropical agriculture </li></ul></ul><ul><li>Large farms were favored in allocation of (subsidized) credit in relation to the modernization, eliminating advantages from small scale production </li></ul><ul><li>Successful small scale production requires more than land (knowledge, skills, access to credit and other markets, infrastructure) </li></ul><ul><ul><li>Many types of investments are necessary and it takes time before benefits come </li></ul></ul><ul><li>Naïve belief that establishment of private property rights is sufficient for the credit market to start to function well </li></ul><ul><li>Big land owners have allied themselves with those in power </li></ul><ul><ul><li>Democracies have also failed to achieve large land redistributions </li></ul></ul>
  16. 16. Examples of successful land reforms <ul><li>Ethiopia </li></ul><ul><ul><li>Low-cost land registration and certification </li></ul></ul><ul><li>China </li></ul><ul><ul><li>Household responsibility system </li></ul></ul><ul><li>Mexico </li></ul><ul><ul><li>Constitutional reform </li></ul></ul><ul><li>India </li></ul><ul><ul><li>Computerized registry system, tax-base </li></ul></ul>
  17. 17. Successful land reform in Ethiopia <ul><li>Land certificates have been provided to more than 6 million households and for more than 20 million plots of land within a period of 8 years </li></ul><ul><li>Land certification has enhanced </li></ul><ul><ul><li>Tenure security, especially of women </li></ul></ul><ul><ul><li>Land rental market participation </li></ul></ul><ul><ul><li>Land investments </li></ul></ul><ul><ul><li>Land productivity </li></ul></ul><ul><ul><li>And reduced land conflicts </li></ul></ul><ul><ul><li>(Deininger et al. 2008, Holden et al. 2008a, 2008b, in press, Holden and Tefera 2008, Ghebru and Holden 2008). The studies can be obtained from [email_address] upon request. </li></ul></ul>
  18. 18. Land rental market participation in 2003: Distribution of net land leased in by own farm size
  19. 19. Yield distribution, plots with and without land certificate
  20. 20. Conflict mediators’ perceptions of border disputes before and after land certification, Southern Ethiopia (Holden and Tefera 2008)
  21. 21. Why has the Ethiopian land reform been so successful? <ul><li>It has not provided full private property rights to land </li></ul><ul><li>It has not opened for sales markets for land </li></ul><ul><li>It has not opened for mortgaging of land </li></ul><ul><li>It has not used advanced technology or highly skilled technical staff during implementation (except in pilot areas) </li></ul>
  22. 22. Reasons for the success of the Ethiopian land reform <ul><li>Initial tenure insecurity created a demand for certificates that could enhance tenure security </li></ul><ul><li>A low-cost (affordable) & scalable approach </li></ul><ul><li>Committed land administrations </li></ul><ul><li>Strong local participation in implementation </li></ul><ul><li>Local institutional structures in place </li></ul><ul><li>Not in conflict with the interests of a powerful elite </li></ul>
  23. 23. Lessons from Ethiopia og China <ul><li>Radical reforms contributed to an egalitarian land distribution but this alone did not create growth and development </li></ul><ul><ul><li>Big landowners were eliminated without compensation and did not get positions in local administrations </li></ul></ul><ul><ul><li>Collective management failed </li></ul></ul><ul><li>The land tenure system is similar in the two countries </li></ul><ul><ul><li>All land is owned by the state (collective) </li></ul></ul><ul><ul><li>Households have user rights </li></ul></ul><ul><ul><li>Strong emphasis on equity in the distribution of land within communities </li></ul></ul><ul><ul><li>Each household has a proportion of each land quality class. </li></ul></ul><ul><li>Frequent land redistributions maintained an egalitarian distribution but created tenure insecurity and undermined investment incentives </li></ul><ul><ul><li>Land certification appears to be a good remedy for this problem </li></ul></ul><ul><li>Strong population growth, conflicts and lack of technological progress contributed to stagnation and continued poverty in Ethiopia </li></ul><ul><ul><li>Land fragmentation and very small farm sizes </li></ul></ul><ul><ul><li>Increasing landlessness: Difficulty of finding land for the young generation </li></ul></ul>
  24. 24. New Challenges in Africa <ul><li>New demands for land for biofuel production </li></ul><ul><ul><li>But how will it be affected by the financial crisis and fall in energy prices? </li></ul></ul><ul><li> Rapid commercialisation of land markets/risk of land grabbing </li></ul><ul><ul><li>Legal empowerment processes may lag behind and poor may lose out and become landless </li></ul></ul><ul><ul><li>Unequal bargaining power and asymmetric information cause a need for special efforts to protect the land rights of the poor </li></ul></ul><ul><ul><li>A clear need to formalise these types of land transactions and enhance transparency to reduce risk of parties and to ensure more fair contracts </li></ul></ul>
  25. 25. New Challenges in Africa <ul><li>Emerging landlessness in the most densely populated areas </li></ul><ul><ul><li>Eroding the potential of land as a safety net </li></ul></ul><ul><li>Higher food and energy prices increase the poverty gap </li></ul><ul><li>Provision of ladders out of poverty: </li></ul><ul><ul><li>Legal empowerment, important but not enough </li></ul></ul><ul><ul><li>New technologies and investments that can enhance land productivity </li></ul></ul><ul><ul><li>Exit options: Expanding the non-farm economy </li></ul></ul><ul><ul><li>Alternative safety nets: Mobilize abundant labour for productive investments </li></ul></ul>
  26. 26. Conclusion <ul><li>Land reforms are again high on the policy agenda </li></ul><ul><ul><li>A need for a more pragmatic and less ideological approach </li></ul></ul><ul><li>Land markets are becoming more important many places </li></ul><ul><ul><li>It is better to facilitate their development to the benefit of the poor than to suppress them </li></ul></ul><ul><ul><li>Especially land rental markets can facilitate land access for landless and land-poor households and be a safety net for poor landed households that can benefit from renting out their land to more productive farmers </li></ul></ul><ul><ul><li>But how can sustainable land management be enhanced on rented land? </li></ul></ul><ul><ul><ul><li>Longer duration contracts? </li></ul></ul></ul><ul><ul><ul><li>Renewable contracts depending on performance? </li></ul></ul></ul><ul><li>Formalization of land markets may be particularly relevant where demands have increased sharply for production of biofuels </li></ul><ul><li>Here is a rich research agenda for environmental and development economists </li></ul>