Definition and Typology of Land Reform
| DOI | http://doi.org/10.1002/j.1099-162X.1968.tb00341.x |
| Date | 01 July 1968 |
| Published date | 01 July 1968 |
Definition and Typology of Land Reform
A
note
contributed
by PROFESSOR EDMUNDO FLORES
of
the
University
of
Mexico.
Land reform is a redistribution measure.
It
belongs to the same familyof
economic tools as fiscal and monetary policies, subsidies, rationing, tariffs,
nationalisation, etc. A few years ago I was reading Richard A. Musgrave's
excellent book The
Theory
of
Public
Finance
and suddenly it struck me that
Musgrave was describing the role and essence of land reform while talking
about puhlic finance. When I told him this he was very pleased and agreed,
though I am not certain that he understood me.
Land reform is a redistributive measure that has two main goals: (i) to
improve income distribution, (ii) to improve the allocative efficiency of land.
The
first goal is attained by shifting the prevailing ownership of land. Here
the effects are similar to those of progressive income taxation provided that
land reform is massive (i.e, accomplished in a period of 5 to
10
years) and
that payment for the land is below its normal market price.
The
second goal
is achieved by manipulating the existing pattern of land tenure by trial and
error in search of optimizing the inputs of land required to form each
individual farm holding, relative to the other factors of production.
Now, and this is critical, the importance given to each' one of these two
objectives varies according to the particular setting where land reform is
tried. Degrees of development are of course critical, as well as the condition
of the balance of payments and the technological expertise available in the
country in question.
Variations in these critical factors allow the possibility of a tentative
typology which consists of three main categories: (i) land reform in advanced
countries, (ii) land reform in under-developed countries with minor or no
balance of payments problems and substantial foreign exchange receipts,
and (iii) land reform in underdeveloped countries with critical balance
of
payments problems.
The
first case is typified by Italy and Japan. Here the redistributive aim
could be achieved merely by shifting savings from the advanced sector of the
economy to the regions in need of reform.
The
quest for allocative efficiency
could be achieved with local capital and technicians. No confiscatory
measures were essential though they occurred in Japan.
The
Italian reform
was expensive but Italy could afford it. Production increased in the reformed
regions.
The
second case is represented by Venezuela and Kuwait, in one instance,
and South Korea and Taiwan in another. In both cases the emphasis was on
improved allocative efficiency.
The
reforms were expensive but the cost
could be afforded. Output and yields have increased.
The
third case is represented by Mexico, Cuba and Bolivia.
The
three
reforms were confiscatory simply because the countries were bankrupt.
The
main aim was redistributive: the results positive in the long run.
The
greater
part of Latin America belongs to this group.
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