1. Introduction
1.4. Organization of the study
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short-term evaluation will be considered as a long-term evaluation would require more extensive analysis.
In addition, both English and Spanish language literature will be utilized. Documents used, come from case studies, researchers contributing to universities and NGOs, individual researchers, newspapers, scientific magazines, governmental and international reports.
1.4. Organization of the Study
This thesis is organized into six chapters, including the introductory one. Chapter 2 presents the theoretical framework, including the definition of land reform, the definition of land reform success, literature review and theories related to the possible explanatory factors for land reform success. Chapter 3 and Chapter 4 include an overview of land reform in Taiwan and Peru respectively, focusing especially on the background and land reform process. Chapter 5 is composed in two phases. The first phase will analyze the effects of the land reform implementation in the case of Taiwan and Peru. The second phase aims to compare Taiwan’s and Peru’s land reforms, using economic and social indicators with different results. So, at the end of the comparison, we will determine if any of the factors or theories explained in the literature review could explain the different results in both cases. At the same time, comparative tables will be included for clarity. Finally, chapter 8 summarizes the main conclusions.
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CHAPTER 2
THEORETICAL FRAMEWORK
Few attempts have been made to develop general principles or a body of theory specifically for land reform (King, 1977). However, it is necessary to outline previous conceptualizations of land reform and review the related theories available, in order to understand the possible factors that could influence the result of land reform implementation.
2.1. Concept of Land Reform
The definition of land reform has been subject to different interpretations. Some describe it as the way to provide land to the landless, while others have defined it as a complete program for the transformation of the entire agricultural economy (Warriner, 1969).
According to Tai (1974), land reform refers to public programs that attempt to restructure equitably and rationally a defective land tenure system by a drastic and rapid process, and where the purpose of the reform is to increase the productivity of land through government-sponsored tenure changes. These changes involve both redistributive programs (land redistribution and tenancy reform), and developmental programs (cooperative farming and publicly instituted land settlement). Among the three kinds of reform programs, the author suggests that land redistribution is the most important, because it is a direct solution for inequality of land ownership, and that land redistribution should be considered as a basic agrarian change, where other reform
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measures have a more complementary role. Furthermore, if the program of land redistribution is not considered, the efforts to solve inequality and increase productivity are limited, as the security of tenure and rent reduction will not be guaranteed (Ladejinsky, 1965).
An agricultural policy seeking only to give land to the landless without providing the new owners with essential agricultural services may result in the fall of production, interfering with one major objective of tenure changes. The common understanding of land reform excludes measures such as agricultural research, extension, credit and marketing; measures related to tenure reform. Moreover, this kind of reform could have a significant change in agricultural services institutions and provide useful tools for peasants to improve their lands (Carroll, 1961).
2.2. Defining Success of Land Reform
Land reform is a complex process that could have different effects on societies. And due to the various social, political and economic objectives of each society, its evaluation may be difficult as those objectives may be inconsistent with each other.
According to Tuma “there are no generally accepted criteria for determining the success of such a program, nor adequate tools for measuring its progress”. However, he mentioned two criteria that may be considered, the economic one and the social one.
(Tuma, 2013).
2.2.1. Economic criteria
In order to analyze the economic development after a land reform, it is necessary to focus on the economic indicators. The economic development is usually reflected in the increase of per capita real income, which has to be accompanied by improvements in
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the economic and social structure (investment, productivity, and employment) in order to have sustained economic development (Tuma, 2013).
Investment in agriculture involves the farmer having sufficient resources, such as machinery, irrigation and drainage facilities, and fertilizers. Those resources will contribute to the productivity of the land and the worker. And since investment partly depends on domestic saving, an increase of investment may thus be an indicator of the success of land reform on the improvement of economic development (Tuma, 2013).
On the other hand, the variation in land productivity is related to a higher efficiency, a better use of resources, and improvements in the use of technology. The change in this indicator also implies an increase in income and thus saving and investment on land.
Indeed, a higher productivity produced by land reform may be one of the most important indicators that contribute to economic development. Another important indicator may be the level of rural employment since it reflects the income’s distribution.
(Abhijit, 1999)
Finally, the increment in production, which reflects the change in the response capacity of agriculture to the demands of industry and manufacturing, is another important indicator. When agriculture is able to provide industrial raw materials, food, labor and a market for industrial products, land reform may reflect its important contribution to industrialization and development (Yu-Kang & Schive, 1995).
2.2.2. Social criteria
On land reform, social and political goals are more difficult to measure. According to Tuma (2013), one of the most important indicators could be the participation of the farmers regarding voting, representation and decision-making activities. Another
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indicator is the degree of social and political stability. This is measured by the tendency to change the government by constitutional means or not, and the continuity of the government without relying on forceful means.
However, these indicators can only demonstrate that change has been made. The impact of the reform will depend on the scope of that change. In agreement with Tuma (2013), if we assume that measurement of social indicators is feasible, there are three approaches that we can use to evaluate land reform: (1) the goal achievement approach, (2) the perceived achievement approach, and (3) the closing-the-gap approach. “Goal achievement approach” implies that a reform is successful if the objective specified prior the reform is achieved. “Perceived Achievement approach” considers a reform successful if the relevant parties perceive that their objectives have been satisfied. And finally, the “Closing-the-Gap approach” considers a reform successful if it reaches to reduce the gap between the agricultural sector and the more developed sectors in the society (Tuma, 2013).
2.3. Literature Review
Poverty has always been a major problem around the world. The solution to this problem would result in the improvement of living standards for about two-thirds of the world’s population. The majority of these people living in poor conditions are from rural areas, where they have been facing many restrictions to their most basic need and resource, the land. Many conflicts have been taking place over the tenure of land, where land reform has been frequently a popular slogan for the redistribution of wealth and economic development in several countries (King, 1977).
Some authors have shown that land reform can contribute to poverty alleviation, but others question the validity of this relationship. What we do know is that the successful
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experience of land reform in specific countries still gives rise to debates on how the developmental process has been affected, not only by initial conditions but also by choice of development strategy and policies. Several authors have sought to identify the most important policies, factors, or variables in determining the course of development. It is difficult to select the determining factors, however, in the course of the discussion, several important factors have emerged. A growing body of literature has examined different factors that can be classified into five main categories: (1) state support in investment and technical assistance, (2) institutions, (3) guaranteed rights and incentives, (4) type of political system and (5) NGO & international organization.
2.3.1. State Support in Investment & Technical Assistance
Land reform can play a major part in stimulating the rural economy, particularly in providing the rural population with a greater command over their own food supply.
However, without further changes in the agricultural infrastructure and in the non-farm activities of an underdeveloped region, land reform can be less effective. According to North & Martinez (1997), important differences between the policies implemented by the East Asian countries and Latin America are mainly focused on: (1) Deep agrarian reforms, (2) Participatory institutions for small producers, (3) Large extension services, (4) Protection and promotion of rural sectors, (5) Intensive technologies in the use of labor and (6) Strong investment in primary and secondary education.
In Latin American for instance, the land reforms have generally been “incomplete”, because they failed to provide beneficiaries with the tools to develop. This factor explains why they have had a poor record in solving the poverty problem. As Janvry and Sadoulet mentioned “from the social aspect, land reform in Latin America has been effective in displacing traditional landed elites and achieving political control over
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peasants, but not in promoting the social incorporation of beneficiaries” (Janvry &
Sadoulet, 2002). The case in Peru shows us that agrarian reform does not seem to have been focused on promoting the development of agriculture. Although in its initial formulation the law defined agrarian reform as an integral process, the reality is that important components, such as technical assistance and training for peasants and cooperative members, were limited and even suspended after a few years (Castillo, 2003). Further tests carried out with recent evidence in nineteen countries, including Peru and Taiwan, reveals that land reform based on redistribution to small-scale farmers can succeed only if there are a significant state support and investment in the small-scale agricultural sector (Widerman, 2006).
2.3.2. Institutions
A pre-reform agrarian system suggests that land reform is basically a social and political issue. It cannot be convincingly justified exclusively on economic grounds or agro-technical logic of cropping intensity in land use and application of technological advance to subsistence cultivation. From whichever aspect the policymaker or development analyst approaches the problem of rural development, these problems rest upon a host of retrogressive institutional arrangements and rural power relations (El-Ghonemy, 1990). In the book “The Political Economy of Rural Poverty: The Case for Land Reform”, the author identifies the institutional determinants of poverty, with
particular emphasis on the barriers to entry to the land and credit markets, where land reform is viewed as an anti-monopoly policy to regulate productive forces, while reducing the concentration of wealth and power in order to save the society from destabilization. However, the cases of the study found that governments and their technocrats are not neutral, as usually assumed in neoclassical economic models.
Exploitative relations and corruption prevail and often the interests of those economic
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classes on whom government depends for their tenure in office are served, while the interest of the rural poor is passed over (El-Ghonemy, 1990).
In order to promote sustainable and equitable development, well-informed and specific strategies are required by the government and other social actors involved. The institutions that govern land tenure must be continuously adapted and regulated to serve the public interest. But, if institutions and policies that regulate rights and obligations in terms of access to land are made primarily to favor the dominant corporations and other powerful groups, instead of the families in need, the “public interest” can easily be interpreted as the opposite of sustainable development (Barraclough, 1999). The strong emphasis on top-down state action and bureaucratic modes of implementation may limit the potentials of land reform to achieve desired changes in land tenure and land use in practice (Sikor & Muller, 2009).
2.3.3. Guaranteed Rights and Incentives
The principal problem for the people living in rural poverty lies in insecure and inequitable terms of access to land. Many of these people are not able to generate enough income to satisfy their basic needs, while others produce a surplus that is usually appropriated by the landlord, employers, intermediaries, collectors of taxes, and others (Barraclough, 1999). In their study, Boyce, Rosset, & Stanton suggest that there is not a single formula for the success of land reform, but the evidence of the East Asia countries (Taiwan, South Korea, Japan, China) shows that successful cases in land reform share common factors such as: The security of rights for future investment in land improvements, women’s rights to land, as well as guaranteed and protected rights for indigenous communities to land, forests, water and other common property resources. Adequate distribution of land for agriculture, which is free of claims disputed
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by other poor people, is also important, and, when families receive land, they should not carry heavy debts to pay for it. Small farmers need a supportive policy environment, including access to credit, fair prices for their products, and access to infrastructure and social services. Policies are needed to reward farming practices that generate environmental benefits (e.g. conservation of agricultural biodiversity), as well as to discourage farming practices that generate environmental costs (e.g., use of pesticides).
The author concludes that experience shows that pro-poor land reform is possible.
When done well, land reform is a powerful strategy to reduce poverty while improving environmental quality (Boyce, Rosset, & Stanton, 2005).
2.3.4. Type of Political System
Effective land reforms have never been mainly technocratic practices. Their realization has always required the active participation of political parties or similar political organizations. Throughout history, political parties have played a major role in land reforms, but these roles have varied widely in different political systems. In a comparison of the reform performance of competitive and non- competitive systems, it is shown that is much easier for a non-competitive system to effect meaningful tenure reform. According to the author, where most of the developing countries in need of reform are controlled by multiparty or bi-party systems (competitive system), the probability for prompt, effective and drastic land reform is generally not bright. On the other hand, in countries where political power is concentrated in one party or a small group of leaders (non-competitive system), the elites really seek to broaden their rural base in order to have the support of the peasants; the possibility of a relatively successful reform is high (Tai, 1974).
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In democratic states with multi-party systems, such as Puerto Rico, Venezuela and Chile, political parties openly competed for electoral support by compromising land reform. However, when a political party wanted to promulgate land reform, it had to follow open debate and many compromises with other political parties. Meanwhile, in the case of more authoritarian political systems, open party competition for popular support was severely restricted. However, even if the opposition parties were banned, the leftist parties were still clandestinely organized. This generally increased the pressures on the regime to support some type of land reform. The competing officers were often looking for populist support, which sometimes led them to undertake radical land reforms. This was the case in Peru with Velasco Alvarado regime in 1969, the military junta in El Salvador in 1979 and the Taiwanese reform with the Chinese nationalist government in the 1950’s (Barraclough, 1999).
2.3.5. NGO & International Organization
Progressive NGOs and committed international organizations can play important roles as catalysts in helping grassroots peasant and landless movements to organize and press their demands for land. As described by the author, these international institutions can help through (1) research focused on the livelihood and sustainable development problems of the rural poor, (2) providing valuable technical assistance, material resources and legal aid, (3) facilitating the use of modern communication technologies by peasants and others struggling for reform, (4) publishing violations of socio-economic and human rights, corruption and other abuses suffered by the poor and (5) advancing land reforms through advocacy at all levels (Barraclough, 1999).
Nonetheless, evidence in Ghana and Kenya suggests that when global land policies are backed by World Bank/IMF and other development partners, in aspects such as titling
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and registration of lands, the promotion of land markets and the individualization of tenure delegitimizes local institutional contexts. So, in the end, these international institutions could significantly change local institutional structures and increase transaction costs of reform programs for investments (Narh, Lambini, Sabbi, Pham, &
Nguyen, 2016).
In conclusion, as we observed in the literature review only the three first factors (“State support in investment & technical assistance”, “Institutions” and “Guaranteed rights and incentives”) are useful to explain why land reform work in Taiwan but not in Peru, since the fourth factor regarding the “type of political system” is the same in both cases Taiwan and Peru and will not contribute to explaining the different results on land reform implementations. And finally, it will not be fair to compare the fourth factor
“NGO & international organization”, since during the first years of land reform implantation Taiwan received assistance from international organizations as the JCRR (Sino-American Joint Commission on Rural Reconstruction). However, in the case of Peru, available literature about land reform in Peru does not mention international organizations as a fundamental actor during the first stage of land reform implementation in Peru. One of the main international organization that promoted the agricultural development through technical assistance was the United States Agency for International Development (USAID), which started their operations in Peru in 2011.
2.4. Theories on Land Reform
2.4.1. Economic Efficiency
The present theoretical aspect aims to explain why state intervention is important to increase efficiency in agricultural production, which is related with the first factor suggested in the literature review, “State support in investment & technical assistance”.
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According to Jelic et al. (2014), the historical concern of the government to increase the food supply for the population, lead the government to take measures for agrarian interventions in order to increase the production efficiency. However, the question is why if the economy works by the effects of the free market, the government budget has to help to improve the efficiency of resources. The reason why the state needs to intervene in this aspect is that the manufacture and agrarian sectors have different structures. While the first sector has as a target the maximization of its production, which would stimulate the innovation in new technologies, the agrarian sector only pursues a standard profit or at least food supply for their family. As a consequence, a sub-optimization problem rise and there is a concern that the agrarian sector will not be able to provide enough food required by the country. Not only regarding the amount of food but also at acceptable prices for the urban population. So, due to the gap between both manufacture and agrarian sector, there is the necessity of the state to provide the family agriculture system with new technology diffusion and its accurate implementation in practice through technical assistance or advisory service. The author suggested that public investments in research and development seem to be a field of interventions in contemporary agriculture as they lead to improvements in agricultural
According to Jelic et al. (2014), the historical concern of the government to increase the food supply for the population, lead the government to take measures for agrarian interventions in order to increase the production efficiency. However, the question is why if the economy works by the effects of the free market, the government budget has to help to improve the efficiency of resources. The reason why the state needs to intervene in this aspect is that the manufacture and agrarian sectors have different structures. While the first sector has as a target the maximization of its production, which would stimulate the innovation in new technologies, the agrarian sector only pursues a standard profit or at least food supply for their family. As a consequence, a sub-optimization problem rise and there is a concern that the agrarian sector will not be able to provide enough food required by the country. Not only regarding the amount of food but also at acceptable prices for the urban population. So, due to the gap between both manufacture and agrarian sector, there is the necessity of the state to provide the family agriculture system with new technology diffusion and its accurate implementation in practice through technical assistance or advisory service. The author suggested that public investments in research and development seem to be a field of interventions in contemporary agriculture as they lead to improvements in agricultural