Land Rights, Equity, and Economic Growth

Counter-intuitively, economic growth (a prerequisite for reducing poverty in the world’s poorest countries) and the well-being of the worst-off and most vulnerable populations are often at odds in the developing world. This tension between poverty, equity, and economic growth is most visibly salient in disputes over land—a key resource for the food security and livelihoods of the poor, but also an essential resource for growth-enhancing investments in energy production and industrial manufacturing. Simmering land disputes that pit growth against equity roil just beneath the surface in many countries; just this past week, these conflicts have boiled over for different reasons across continents, from Kenya to China to Myanmar.

In China, villagers in the southern village of Shangpu overturned cars and blockaded roads this past weekend, accusing the local party chief of grabbing communal farmland and leasing it to a local businessman in a sweetheart backroom deal that could spur investment in one of China’s major export producing regions. The villagers, outraged that the land lease would deny them access to the their major source of livelihoods, in exchange for a meager and uncertain compensation, are calling for the party chief’s ouster.

In Kenya, land disputes remain a perennial source of ethnic rivalries and violence, despite the week’s largely peaceful election. Kenya’s complex land injustices are legacies of colonialism, further perpetuated by corrupt post-independence governments. The British appropriated the best arable land from native owners and reallocated it to white settlers and colonial regime loyalists. Dispossessions continued post-independence, with the Kenya National Commission on Human Rights describing these land grabs as the “most pervasive corrupt practice” perpetrated by president Daniel arap Moi.

Yet Kenya has shown remarkable growth rates over the past two decades, and despite a few stalled years after the 2007 election-related violence, remains one of the economic engines of the continent.

And in Myanmar, residents of the Irrawaddy Delta township demonstrated last week against the confiscation of between 500 and 1,000 acres of land by the former military junta for investment purposes, calling for restitution and justice. According to reports, dozens of people were injured and one police officer was killed in the clash. “We have nothing--we are poor and suffering--and want to get back to farming,” said local resident Tin Tin Nwe.

The data shows that, historically, property insecurity of non-elites can enhance economic growth, but also encourages conflict—which can, on the other hand, undermine long-run growth and inclusive economic development. Using a new set of indicators that measure the property insecurity of marginalized ethno-cultural minority groups, my research demonstrates that the severity of property insecurity for the worst-off group in a country is strongly associated with the onset of armed conflict, but, putting aside this conflict risk, property insecurity for marginalized minorities actually corresponds with higher growth rates. In short, economic growth can occur when the property rights of elites are secure but marginalized minorities face high a risk of expropriation, as land is reallocated into the hands of investors with access to capital. But the risks of this short-cut to growth are real. The potentially growth-enhancing effect of forced displacement is tenuous, because this property insecurity also increases the likelihood of armed conflict.

As the events of recent weeks demonstrate, reconciling the tensions between poverty, equity, and economic growth remains a daunting challenge, made all the more salient when lives are on the line.