Michael Lipton: Land Reform in Developing Countries: Property Rights and Property Wrongs. Routledge, London, New York 2011. Routledge Priorities in Development Economics. 456 pp.

How to increase liberty, and reduce poverty and gross inequality for small-scale farmers? Lipton has the convincing solution: Through so-called “new-wave land reform” and the tools for modernised rural development. Michael Lipton presents the most comprehensive, intoxicating overview on worldwide new-wave land reforms that I am aware of. This book is about efficiency – economic versus (or and) social efficiency of land distribution in developing countries, but also following the roots of land reforms, their allies, and questions the “alleged death of land reform” (see chapter 7). Surely, the role of land reform will not diminish for the next half century at least (see p. 10). Today, the bilateral and multilateral donor organisations involved in the rule of law processes in developing countries – as crucial parts of each land reform – are more focused on property rights reforms than at any time in the last half century. We should go back to the year 2000. Then, neoliberal interpretations of property models dominated and were seen as a necessary foundation for efficiently donor-driven development due to the “Washington Consensus”. However, the recent national elections in Venezuela, Bolivia, and Ecuador show that this private property rights orientation may no longer apply everywhere. One might ask: Are land reforms as fresh as today’s newspaper (see p. 3)? Property is the key. The property rights theory – familiar to environmental economists as the Coase-theorem – plays an inferior role in the international land reform discourse (see chapter 1 – “Goals”). According to this neo-institutionalist theory, property rights are to be given into the hands of private owners and/or large scale-farmers who feel responsible for the assets and their highest and best use (=economic efficiency). Owners must therefore be able to exclude others from using their property. On the other hand, small-scale farmers usually have no intention to exclude others from their land, and often act as subsistence farmers. Are they inefficient? Michael Lipton concludes: They aren’t.

Michael Lipton’s message comes clear: In the past, the developments in land markets partially counteracted the intentions of land reforms, which was to allocate land to peasants and to safeguard their livelihood. Land speculation, land grabbing, land concentration, land disputes, and evictions were aberrations that were caused by the price hikes for agricultural land following Foreign Direct Investments. Although a system of formalized rights based on the national cadastre system may enhance the transferability of land, this occurs at the expense of security of tenure due to superimposing the system of customary and genuine rights (see chapters 3 and 4). Land reformers like Henry George or Adolf Damaschke, but also economists like John Stuart Mill or Léon Walras and political philosophers such as Immanuel Kant and Pierre Joseph Proudhon criticised private property for land and natural resources. “No man made the land”, is a famous quotation from John Stuart Mill (1848). The main arguments for such a sceptical interpretation of private property for immovable, public and non-renewable goods like land are: If all tradable property rights are left in the hand of private people, any land use plan is useless. Economic interests dictate, and the arrangement is not effective. Negotiations will often fail. Because of high opportunity costs, only a certain part of the possible investment can be executed. Land distribution is unequal. The access to land is not guaranteed for a lot of people; hence pro-poor land reforms are anything else than passé. The way of land use is determined by (liberalised) economic power (see chapter 5). This fact is doubtlessly not a sound legitimating base for a new-wave land reform in the sense of Lipton. No silver bullets can be presented to solve local land disputes and to map the boundaries of the rural and urban communal land to prevent land grabbing by wealthy investors or “Big Men” (see p. 36). The lack of national-level approval of the communities’ maps, the absence of involved authorities throughout the mapping process, and limited access to GIS-technologies clearly disadvantage communities. Land sales provide short-term benefits for the owners without reinvesting these profits for productive purposes and thus seldom work to the community’s benefit or in favour of poverty reduction. While higher land values normally benefit village sellers, proceeds from land sales are not normally invested in productive pursuits.

No new-wave land reform without a broader view on land taxation (see chapter 6). By improving prior assessment tools for mass valuation and ad valorem taxation, developing countries serve as examples for the evolution of taxation in adverse circumstances as rent-seeking, speculation, informal land markets, and unequal land distribution occur. Property taxation, eventually supported by land value increment taxation, will become an important future source of the national revenues. Taxation should be ideally flanked by a coded, transparent and upgradeable property record system, by updated or revised land valuation manuals, and a holistic land information infrastructure due to international geodetic standards. The tax on unused land seems to be insufficient as well, since there are disputes whether land can be clearly defined as “unused” or not. The site value tax could be accompanied by a land value increment tax. For that tax, taking only site (land) values for public purposes is characteristic. This tax was highly influenced by Henry George (see p. 249) and his “single tax” approach as a value capture instrument, meaning a recurrent tax by which annual windfall profits on land ownership from community growth or public investment are consequently taxed away (see Andelson 2000). The value of a site is calculated out of the net present value of the extra surplus – a surplus that can normally be achieved through public land use planning without any investment by the landowner. The national, regional and local authorities responsible for land valuation and taxation would face the difficulties of partly skimming-off the potential rent-seeking gains (windfall profits) of the landowners to achieve an even distribution of wealth and finance rural infrastructure (see p. 251). However, no sufficient confidence can be found in the reliability of the sales prices recorded as the basis for the tax payment. Surely, the theory and practice of land taxation, combined with the Ricardian rent in particular of unimproved land, is highly controversial (see p. 123). Much more detail is needed to justify about the sustainability of a future simple revenue generation system, e.g., through computer-assisted mass appraisal options – a chance for geo-information specialists and geographers. 70% of the global work for land governance and to “maximize the happiness of all” (Jeremy Bentham) (see p. 334) and income stability has to be carried out still.

Moreover, land reforms need the “machine of planning”. This combines tools to compare alternative actions and to identify best alternatives for the land use via spatial planning. But planning depends on the preferences of public and private land owners, and the rule of law. Sufficient compliance with the land use planning objectives must be achieved. Regionally significant plans and measures would be harmonized and carried out in comprehensive development concepts while satisfying the requirements of the current land use planning policy. Rural and infrastructural development like village renewal can be very costly. It depends, to some extent, on the cooperation with the land owners who have to pay for the supply of infrastructure systems. In addition, to ensure the development of local public transportation and communication infrastructure, of water and energy supply, of public health services, of sanitation and water supply in the context of village renewal and rural development, land owners should be forced to take on some of these infrastructure costs. Moreover, development in rural areas depends on the poly-rationalities and properties of the involved land owners (see Davy 2012). Lipton considers this. In some cases, plans are blocked by private land owners who do not accept the planning determinations for their plots and the restrictions of their private property. Instead, these private land owners hope to increase and bag the ground rent. A leasehold tenure system puts economic pressure on the private land owners so that the planning authorities are able to grant access to land without high transaction costs. Leasing could emerge as one instrument of land reform and lowered transaction costs by (tenure) innovation, customary practices, leading to resource efficiency of the often denigrated subsistence farming (see chapter 2). Leasehold tenure on public land without speculation tendencies – and without the need of (re-)distribution of private property – can give legal security to foster political and economic stability and can avoid the occurrence of land conflicts. Doubtlessly, leasing rights cannot solve all specific marital problems that threaten land tenure security and income stability such as separation, divorce, abandonment, multiple marriage relationship, death of the husband, or unregistered co-ownership of the land as they occur frequently in African and Asian states. But the granted land use rights have to be paid by the users due to their economic capability. The lower the income per household, the lower the cost for the leaseholds and the transaction costs for the household. In a nutshell: The strengths of the arguments in favour of the pro-poor land reform are as valid today as they ever were. “The reader is left with an understanding that the land reform saga is far from over, that the battle remains very much worth the effort (...)” (see Berry 2011, 640). Indeed: “New-wave” land reformers, development aid workers and land policy advisors should carefully study this important and thoughtfully written opus.

Fabian Thiel

References:
Andelson, R. V. (20003): Land-value taxation around the world. Malden, MA.
Berry, A. (2011): The case for redistributional land reform in developing countries. In: Development and Change, 42 (2), 637–648.
Davy, B. (2012): Land policy. Planning and the spatial consequences of property. Farnham.
George, H. (1879): Progress and poverty. Reissued edition 1979. New York.
Mill, J. S. (1848): Principles of political economy and chapters on socialism. Reissued edition 2008. Oxford.

Quelle: Erdkunde, 67. Jahrgang, 2013, Heft 1, S. 102-104

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