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Occupational Choices: Economic Determinants of Land Invasions

Literature › Works

F. Daniel Hidalgo; Suresh Naidu; Simeon Nichter; Neal Richardson (2008). Occupational Choices: Economic Determinants of Land Invasions. University of California, Berkeley (working paper draft, September 2, 2008).
Type working paper
Scope Comparative and methods
Method econometric
Period studied 1988–2004
Regions Brazil
Themes agriculture land, inequality poverty unemployment, resistance social movements, comparative theory, methods data sources
Citation key hidalgo2008

Argument

The paper estimates how economic conditions affect redistributive conflict, using land invasions in Brazilian municipalities, 1988-2004. Agricultural income is instrumented with absolute deviations of standardized rainfall, since both droughts and floods lower crop revenue. On this basis the authors show that adverse income shocks cause the rural poor to invade large landholdings, consistent with an opportunity-cost channel. The effect is heterogeneous. It is roughly twice as large in highly unequal municipalities, stronger still where land is polarized, and stronger where more land is under fixed-rent tenancy. It does not vary with political competition, police or social spending, banks, non-farm activity, or income poverty. Cross-sectional regressions with micro-region fixed effects also link land inequality to invasions, and the relationship is monotonic. This contradicts theories that extreme inequality deters conflict through repression.

Evidence and method

Pastoral Land Commission (CPT) and Dataluta records of 5,299 land invasions by municipality-year (1988-2004), including number of families. IBGE Produção Agrícola Municipal crop data for eight major crops. Daily rainfall from 2,605 ANA weather stations (1985-2005). Hoffmann's municipal land Ginis from the INCRA registry (1992, 1998). 1995/96 Agricultural Census tenure data. 1991 and 2000 population censuses, IPEA budget data and TSE electoral data. The panel exceeds 50,000 municipality-year observations.

Findings

  • Negative income shocks produce twice as many invasions in highly unequal municipalities as in those with average land inequality. (p. 3)

    In highly unequal municipalities, negative income shocks cause twice as many land invasions as in municipalities with average land inequality.

  • Brazilian landholding is extremely concentrated. (p. 6)

    The concentration of property in Brazil is so skewed that the largest 3.5 percent of landholdings represent 56 percent of total agricultural land.

  • Land invasions pushed formal land reform forward under Cardoso. (p. 6)

    due in large part to these land invasions, land reform trebled under Fernando Henrique Cardoso (1995-2002), reaching nearly 260,000 families during his presidency

  • The rainfall instrument is strong at the municipal level, unlike in cross-country studies. (p. 14)

    F-statistics for the excluded instruments of approximately 86 for the absolute value measures

  • IV estimates show large elasticities of invasion participation with respect to agricultural income. (p. 16)

    a 10 percent decrease in agricultural income causes a 11 to 16 percent increase in the number of families participating in land invasions.

  • The land-inequality heterogeneity appears driven by landlessness and vulnerability rather than by the attraction of large estates. (p. 20)

    is linked to economic vulnerability of the land-poor; the targeting of large properties may be of secondary importance at best.

  • The interaction between rainfall shocks and land inequality shows no nonmonotonicity. (p. 21)

    Contrary to some theories discussed above, there appear to be no nonmonotonicities in the interaction between rainfall and inequality.

  • Fixed-rent tenants are more exposed to shocks because they bear the full risk and lack collateral. (p. 22)

    because they bear the full productivity shock and cannot use their land for collateral—unlike landowners—to borrow during poor seasons.

  • Asset poverty rather than income poverty amplifies the effect of shocks. (p. 25)

    Asset poverty, and not income poverty, is associated with a greater

  • Land inequality may channel redistributive demands into extralegal action. (p. 27)

    Land inequality may be associated with poor political institutions, thereby channeling redistributive pressures into extralegal social-movement activity.