Land Reform Policies, The Sources of Violent Conflict and Implications for Deforestation in the Braz

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Land Reform Policies, The Sources of Violent
Conflict and Implications for Deforestation in
the Brazilian Amazon
Lee J. Alston University of Illinois NBER   Gary
D. Libecap University of Arizona NBER   Bernardo
Mueller Universidade de Brasilia
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I - Purpose of the Paper

• Develop and Test a Theoretical Framework for Land
  Conflict in the Brazilian Amazon.

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II - Importance

• Lives Lost Over the past two decades more than
  500 people killed in disputes over land in the
  Amazon.
• Violence by weakening property rights may
  reduce investment and thereby economic growth.
• Dissipation of Resources through Offensive and
  Defensive Strategies Deforestation.

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Population of Pará
People
7.000.000
6.188.685
Southeast Pará
Pará
5.510.849
6.000.000
5.000.000
4.000.000
3.000.000
2.000.000
1.185.065
1.041.986
1.000.000
0
1920
1930
1940
1950
1960
1970
1980
1990
2000
Source Ministério do Desenvolvimento Agrário,
Balanço das Ações no Sul e Sudeste do Pará.
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Land Reform Settlements in Pará
Source Ministério do Desenvolvimento Agrário,
Balanço das Ações no Sul e Sudeste do Pará.
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Land Reform Credit in Pará
Source Ministério do Desenvolvimento Agrário,
Balanço das Ações no Sul e Sudeste do Pará.
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Land Invasions in Pará
Source Ministério do Desenvolvimento Agrário,
Balanço das Ações no Sul e Sudeste do Pará.
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Numer of Families Settled - Brazil
Source INCRA, 2001, Balanço da Reforma Agrária.
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Source INCRA, 2001, Balanço da Reforma Agrária.
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Assassination of Rural Workers Brazil 1964-2001
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0.48
0.51
0.40
0.37
037
0.81
0.37
0.30
0.48
0.54
Percentages are mean rates of gross deforestation
(year) relative to remaining forest.
Source INPE, Monitoramento da Floresta Amazônica
Brasileira por Satélite.
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Arch of Deforestation Increments of Deforestation
Observed in 1998
Source INPE, Monitoramento da Floresta Amazônica
Brasileira por Satélite.
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Source INPE, Monitoramento da Floresta Amazônica
Brasileira por Satélite.
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Distribution of Mean Rate of Deforestation by
size of deforested plot
Source INPE, Monitoramento da Floresta Amazônica
Brasileira por Satélite.
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III - Competing Property Rights Titleholders
versus Squatters

• Property Rights of Titleholders- Statutory Law
  (upheld by local courts).

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III - Competing Property Rights Titleholders
versus Squatters

• Property Rights of Squatters Constitution
  (upheld by INCRA).
• Expropriation of land titled land if it is not in
  socially beneficial use.
• Right to occupy unproductive land.
• If occupancy is not contested after five years,
  the right to a title.
• Payment for Improvements

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III - Competing Property Rights Titleholders
versus Squatters

• No Respected Legal Hierarchy of Rights.

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III - Competing Property Rights Titleholders
versus Squatters

• Conflict not ubiquitous
• much titled land is put into productive use.
• property rights are not worth enforcing privately
  on much titled land.
• titleholders pay squatters for improvements and
  leave when asked to leave.

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IV - Institutional Environment INCRA and the
Courts

• Courts
• Local Courts issue eviction notices based on
  Civil Code.
• Federal Courts rule on legality and value of
  expropriated land based on interpretation of
  socially beneficial use.

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IV - Institutional Environment INCRA and the
Courts

• INCRA authority to expropriate land that is not
  fulfilling the socially beneficial use
  criterion. Probability of INCRA expropriating
  land determined by
• s, the amount of violence by squatters ()
• P, the quality of property rights on occupied
  land (-)
• G, the Presidents Commitment to land reform ()

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V - A Model of Rural Conflicts in the Amazon

• Players Titleholders and Squatters decide on how
  much effort (violence) to exert so as to maximize
  the payoff- the expected value of land.

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V - A Model of Rural Conflicts in the Amazon

• Value of Land depends on the outcome
• Squatters evicted and farmer retains the land.
• Squatters not evicted but the land is not
  expropriated (stalemate).
• Land is expropriated.

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V - A Model of Rural Conflicts in the Amazon

• Squatter and Farmers Objective Functions land
  values in each outcome are weighted by the
  probability of that outcome minus the costs of
  violence. The usual maximization, i.e., MBMC.

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V - A Model of Rural Conflicts in the Amazon

• Joint Solution of optimizations simultaneous
  optimization of v (effort of titleholder) and
  s (effort of squatters).

squatters reaction function
s
s
titleholders reaction function
v
v
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V - A Model of Rural Conflicts in the Amazon

• v and s will vary with
• quality of property rights v (-), s (?)
• position of the courts v (?), s ()
• federal governments will to expropriate v (?),
  s ()
• value of land v (), s (?)
• squatters cost v (-), s (-)
• farmers cost v (-), s ()

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VI - Estimation of the Determinants of Conflict

• Conflictsi (1991-1994) B0 B1Settlementsi
  B2 Squattingi B3 Clearingi B4 Concentrationi
  B5 Valuei B6 Establishmentsi e

Data at the município (county) level for the
state of Pará. Estimation Tobit with 83
observations.
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VI - Estimation of the Determinants of Conflict
Land Conflicts
Est. Coef.
Variable
Notes Level of significance (Wald Chi-square
statistic) 1 , 5 , 10 The coefficients
presented are the regression (non-normalized)
coefficients. Our estimation used instruments to
estimate settlement in order to control of
simultaneity.
Notes Tobit estimation t-statistics in
parenthesis N83 Level of significance (Wald
Chi-square statistic) 1 , 5 , 10 The
coefficients presented are the regression
(non-normalized) coefficients. Our estimation
used instruments to estimate settlement in order
to control of simultaneity.
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Concluding Remarks

• In their effort to promote land reform through
  expropriations and settlements the government is
  most likely increasing the number of land
  conflicts.
• Using cleared land as a measure of beneficial or
  productive use leads to premature deforestation
  in an effort to solidify property rights.

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Concluding Remarks

• Underlying tension between efficiency gains from
  secure property rights and distributional
  objectives of land reform.

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Concluding Remarks

• Recent developments
• Number of invasions falling.
• Pressure is now mainly for credit.
• Conflict prevention offices.
• Conflict hot-line.
• Areas with more than 50 in forest are not
  susceptible to expropriation.
• Land Bank.