The effect of commodity price shocks on public lands distribution: Evidence from Colombia

Abstract

Abstract How do commodity shocks impact the privatization of public lands? This paper examines this question through the lens of the establishment of private property rights over public lands in Colombia, which has had one of the Western Hemisphere's largest public land distribution programs during the last century. Using data on exogenous international coffee price shocks along with data on land suitability for coffee production as determined by agro-climatic conditions and roughly 250,000 public land grants, I find that coffee price increases generate more public land grants in municipalities where land is more suited to coffee production. Additional tests suggest that the findings are driven by the power of organized cultivators to steer the land grant process in their favor. The findings shed light on the role of organized actors in the countryside extending private extension of control over public territory – a phenomenon that has drastically diminished public lands and natural spaces in numerous countries over the last two centuries.