Corruption, Poverty and Tropical Land Use

Abstract

Growth in crop production in many developing economies continues to require new land to be converted and brought into production. In addition, “marginal” land expansion appears to serve as an outlet for the rural poor. Evidence shows that the rural poor are increasingly concentrated in low productivity and fragile environments. Cross-country analysis of tropical agricultural land expansion supports these links between agricultural development and land conversion. In addition, corruption appears to be an important factor in affecting tropical land conversion, both directly and through interaction with the terms of trade. An increase in agricultural land expansion in the long run is also associated with a lower level of per capita income across developing economies. Those economies who have expanded agricultural land area have not achieved greater economy-wide gains compared to economies with little agricultural land expansion. Rent-seeking and corruption, reinforced by policies, contribute both to excessive land conversion and the concentration of the poor in low-productive, marginal lands. The result is the tendency for the gains from converting highly valuable land resources to benefit mainly wealthy elites, thus exacerbating problems of inequality and rural poverty while at the same time impeding economy-wide development.