Economic Determinants of Land Invasions

Abstract

This study estimates the effect of economic conditions on redistributive conflict. We examine land invasions in Brazil using a panel data set with over 50,000 municipality-year observations. Adverse eco- nomic shocks, instrumented by rainfall, cause the rural poor to invade and occupy large landholdings. This effect exhibits substantial heterogeneity by land inequality and land tenure systems, but not by other observable variables. In highly unequal municipalities, negative income shocks cause twice as many land invasions as in municipalities with average land inequality. Cross-sectional estimates using fine within-region variation also suggest the importance of land inequality in explaining redistributive conflict. I. Introduction C ONFLICT over land is endemic to many rural econo- mies. In environments marked by a highly skewed distribution of property, incomplete land and credit markets, poorly or unevenly enforced property rights, and weak political institutions, agents often resort to extralegal means to improve their economic positions. The poor frequently invade private properties and occupy them until either forcibly expelled or granted official titles. Land conflict, which is prevalent in many countries such as Brazil, South Africa, Uganda, and Venezuela, may distort the allocation of resources in the agricultural sector away from productive uses and thereby contribute to the persistence of rural poverty. How do economic conditions affect this redistrib- utive conflict? This paper explores this question using a rich municipal- level data set of 5,299 land invasions from 1988 to 2004 in Brazil. We follow Miguel, Satyanath, and Sergenti (2004) by using rainfall as a source of exogenous variation to study the relationship between income and conflict, and we find that adverse economic shocks cause the rural poor to invade large landholdings. This effect exhibits considerable het- erogeneity by land inequality and land tenure systems. In highly unequal municipalities, negative income shocks cause twice as many land invasions as in municipalities with average land inequality. The effect of income shocks is even stronger in highly polarized municipalities, as measured by the degree of bimodality in the land distribution. Cross- sectional estimates using fine within-region variation also suggest the importance of land inequality in explaining redistributive conflict. We also find that income shocks cause significantly more land invasions in municipalities with a greater proportion of land under fixed-rent contracts. By contrast, we find no evidence of heterogeneity on a range of other political and socioeconomic variables, including political competition, sharecropping, police expenditures, and social welfare spending. Recent microeconometric studies have examined two