Economy

WORLD POVERTY
Land reform limited success as agent of economic and social change

Mark Reutter, Business Editor
(217) 333-0568; mreutter@uiuc.edu

2/1/2001

CHAMPAIGN, Ill. -- One of the most hotly debated topics over the years has been land reform.

Dating from the influential 1951 United Nations report, "Land Reform: Defects in Agrarian Structure as Obstacles to Economic Development," redistribution of land has been hailed as a remedy for third-world poverty.

Examining the record in Asia and Latin America, University of Illinois economist Salim Rashid argues that land reform has had limited success as an economic tool and offers a "very indirect means" of political and social reform. Improved education, credit from banks, industrialization and "rule of the law" all hold greater promise to end the cycle of rural impoverishment and periodic starvation.

There are many reasons why the issue should be re-examined, according to the UI economist. The threat of Communism has disappeared, and land reform had a Cold War motivation. Moreover, the relatively few examples of successful land reform in Korea and Taiwan were achieved under non-democratic regimes.

"What are the prospects for land reform under democratic regimes in countries like India, the Philippines, Brazil or Mexico? Does land reform remain of central importance when countries like Indonesia, Malaysia and Thailand have been able to grow without such reform?"

Much of the supposed success of land reform stemmed from early favorable reports of Stalinist collectivization in Soviet Russia. Subsequent decades, however, have made it clear that the farm collective stunted Soviet agriculture and failed to improve significantly the lot of the poor.

"It is astonishing to think how the presumed success of the Soviet model served to inspire generations in developing countries -- and how no one made an effort to ascertain if this model was factual."

Much of the advocacy for land reform involves animus toward landowners who enjoy undue legal and social privileges. Rashid said the solution for such inequality is for state authorities to enact reforms that give landless farmers access to educational facilities, bank credit, extension services and a competitive local economy.

A government unable to provide its rural citizens with a basic set of legal and social rights is invariably too complacent or corrupt to undertake the enormous task of redistributing land across society.

In addition, land reform has typically been stymied by the enormous cost of buying private property or the social disruptions that stem from outright confiscation of the land.

"Advocates of radical land reform argue that land reform has not worked because it has been subverted. But of course. This is what comes of planning a radical reform without thinking how it is to be administered," Rashid noted in his paper, "Is Land Reform Viable Under Democratic Capitalism?"

"When one reads the list of items needed for successful land reforms, it is a complete menu for economic development. But then it is probably better to aim explicitly at economic development, and if such development necessitates land reform, that is the appropriate time to face up to this issue."