2040. Making Negotiated Land Reform Work: Initial Experience from Brazil, Colombia, and South Africa

Klaus Deininger
(January 1999)

Can land reform have a lasting impact on poverty reduction? The paper describes and evaluates a new type of negotiated land redistribution and highlights key areas that merit attention in designing programs of this nature.

Deininger describes a new type of negotiated land reform that relies on voluntary land transfers negotiated between buyers and sellers, with the government's role restricted to establishing the necessary framework for negotiation and making a land purchase grant available to eligible beneficiaries.

This approach has emerged—following the end of the Cold War and broad macroeconomic adjustment—as many countries face a second generation of reforms to address deep-rooted structural problems and provide a basis for sustainable economic growth and poverty reduction.

Deininger describes initial experiences in Brazil, Colombia, and South Africa. It is too soon to know whether negotiated land reform can rise to the challenges administrative land reform failed to solve but the data so far suggest that:

• Negotiated land reform can succeed only if measures are taken to make the market for land sales and rental more fluid and transparent.
• Productive projects are likely to be the key to market-assisted land reform. The potential for project productivity establishes an upper bound on the price to be paid and a basis for financial intermediaries to evaluate the project. It also requires beneficiaries to familiarize themselves with the realities they're likely to confront as independent farmers and the limits to how much land reform can help them achieve their goals.
• The only way to effectively coordinate the entities involved in the process is through decentralized, demand-driven implementation.
• The long-run success of land reform depends on getting the private sector involved and using the land purchase grant to "crowd in" private money.

This paper—a product of Rural Development, Development Research Group—is part of a larger effort in the group to monitor and evaluate a number of innovative approaches to land reform in various countries. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Maria C. Fernandez, room MC3-542, telephone 202-473-3766, fax 202-522-1151, Internet address mfernandez2@worldbank.org. The author may be contacted at kdeininger@worldbank.org. (34 pages)

The full report is available in PDF format.