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

the Brazilian Amazon

Lee J. AlstonUniversity of Illinois

NBER 

Gary D. LibecapUniversity of Arizona

NBER 

Bernardo MuellerUniversidade de Brasilia

I - Purpose of the Paper

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

II - Importance:

1. Lives Lost – Over the past two decades more than 500 people killed in disputes over land in the Amazon.

2. Violence – by weakening property rights may reduce investment and thereby economic growth.

3. Dissipation of Resources through Offensive and Defensive Strategies – Deforestation.

PeoplePeople

Population of Pará

Source: Ministério do Desenvolvimento AgrárioMinistério do Desenvolvimento Agrário , Balanço das Ações no Sul e Sudeste do Pará, Balanço das Ações no Sul e Sudeste do Pará. .

17.823

983.507

17.268

944.644

22.801

1.123.273

41.386

1.538.193

112.362

2.167.018

364.292

3.403.498

829.292

4.950.060

1.041.986

5.510.849

1.185.065

6.188.685

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

1920 1930 1940 1950 1960 1970 1980 1990 2000

Southeast Pará Pará

Number of Families Settled in Pará (stock)

0

10

20

30

40

50

60

70

80

up to 1995 1996 1997 1998 1999 2000

se

ttle

d f

am

ilie

s (

10

00

)

Land Reform Settlements in Pará

Source: Ministério do Desenvolvimento AgrárioMinistério do Desenvolvimento Agrário , Balanço das Ações no Sul e Sudeste do Pará, Balanço das Ações no Sul e Sudeste do Pará. .

Year Credit for Installation (R$)

Credit for Infrastructure (R$)

1996 3,207,3003,207,300 

563,362563,362 

1997 11,536,70011,536,700 

14,924,85114,924,851 

1998 24,788,92524,788,925 

21,898,42021,898,420 

1999 17,499,80017,499,800 

15,889,42615,889,426 

2000 19,383,00019,383,000 

12,160,00012,160,000 

Total 76,415,72576,415,725 

65,436,05965,436,059 

Land Reform Credit in Pará

Source: Ministério do Desenvolvimento AgrárioMinistério do Desenvolvimento Agrário , Balanço das Ações no Sul e Sudeste do Pará, Balanço das Ações no Sul e Sudeste do Pará. .

29

17

108

7

3

0

5

10

15

20

25

30

1996 1997 1998 1999 2000 2001

Land Invasions in Pará

Source: Ministério do Desenvolvimento AgrárioMinistério do Desenvolvimento Agrário , Balanço das Ações no Sul e Sudeste do Pará, Balanço das Ações no Sul e Sudeste do Pará. .

1995 1996 1997 1998 1999 2000 20010

20

40

60

80

100

120

Families Settled

Numer of Families Settled - Brazil

Source: INCRA, 2001, Balanço da Reforma Agrária.

0

200

400

600

800

Con

flict

s

1987 1989 1991 1993 1995 1997 1999 2001

Year

Land Conflicts in Brazil

Source: INCRA, 2001, Balanço da Reforma Agrária.

15

58 9

2 29

1612

29

18

39

25

37

6873

110

96

134

180

122

161

110

67

75

4652

4741

54

30

47

27

10

0

5949

38

Fonte: 1964 a 1999 - CPT - Comissão Pastoral da Terra 2000 e 2001 - Ouvidoria Agrária Nacional

Assassination of Rural Workers – Brazil 1964-2001

Gross Deforestation (sq. km) 1978 - 1998Brazilian Amazon

0

100000

200000

300000

400000

500000

600000

Source: INPE, Monitoramento da Floresta Amazônica Brasileira por Satélite.

0.48%

0.30%

0.37%0.40%

0.81%

0.51%

037%

0.54%

0.48%

0.37%

Percentages are mean rates of gross deforestation (%year) relative to remaining forest.

Arch of DeforestationIncrements of Deforestation Observed in 1998

Source: INPE, Monitoramento da Floresta Amazônica Brasileira por Satélite.

Source: INPE, Monitoramento da Floresta Amazônica Brasileira por Satélite.

Source: INPE, Monitoramento da Floresta Amazônica Brasileira por Satélite.

Distribution of Mean Rate of Deforestationby size of deforested plot

III - Competing Property Rights: Titleholders versus Squatters

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

III - Competing Property Rights: Titleholders versus Squatters

2. Property Rights of Squatters – Constitution (upheld by INCRA).

i. Expropriation of land titled land if it is not in “socially beneficial use”.

ii. Right to occupy “unproductive” land.

iii. If occupancy is not contested after five years, the right to a title.

iv. Payment for Improvements

III - Competing Property Rights: Titleholders versus Squatters

3. No Respected Legal Hierarchy of Rights.

III - Competing Property Rights: Titleholders versus Squatters

4. Conflict not ubiquitous:i. much titled land is put into productive use.

ii. property rights are not worth enforcing privately on much titled land.

iii. titleholders pay squatters for improvements and leave when asked to leave.

IV - Institutional Environment: INCRA and the Courts

1. Courts:i. Local Courts issue eviction notices based

on Civil Code.

ii. Federal Courts rule on legality and value of expropriated land based on interpretation of “socially beneficial use.”

IV - Institutional Environment: INCRA and the Courts

2. INCRA: authority to expropriate land that is not fulfilling the “socially beneficial use” criterion. Probability of INCRA expropriating land determined by:

i. s, the amount of violence by squatters (+)

ii. P, the quality of property rights on occupied land (-)

iii. G, the President’s Commitment to land reform (+)

V - A Model of Rural Conflicts in the Amazon

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

V - A Model of Rural Conflicts in the Amazon

2. Value of Land depends on the outcome:i. Squatters evicted and farmer retains the

land.

ii. Squatters not evicted but the land is not expropriated (stalemate).

iii. Land is expropriated.

V - A Model of Rural Conflicts in the Amazon

3. 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., MB=MC.

V - A Model of Rural Conflicts in the Amazon

4. Joint Solution of optimizations – simultaneous optimization of v* (effort of titleholder) and s* (effort of squatters).

s

v

squatter’sreactionfunction

titleholder’sreactionfunction

v*

s*

V - A Model of Rural Conflicts in the Amazon

4. v* and s* will vary with: v. quality of property rights; v* (-), s* ()

vi. position of the courts; v* (), s* (+)

vii. federal government’s will to expropriate; v* (), s* (+)

viii. value of land; v* (+), s* ()

ix. squatter’s cost; ; v* (-), s* (-)

x. farmer’s cost; v* (-), s* (+)

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.

VI - Estimation of the Determinants of Conflict

Constant -11.16** (-2.46)

Settlements 2.90** (3.27)

Squatting 9.66*(1.95)

Clear-6.92

(-1.45)

Concentration 6.01*(1.91)

Land Value 2.01**(2.23)

Sigma  

4.887

 

Establishments -0.0001(-0.36)

Wald Chi-Square Stat. (2

6, 1% = 16.81)

51.36***

Variable Est. Coef.

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.

Concluding Remarks

1. In their effort to promote land reform through expropriations and settlements the government is most likely increasing the number of land conflicts.

2. Using cleared land as a measure of “beneficial or productive use” leads to premature deforestation in an effort to solidify property rights.

Concluding Remarks

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

Concluding Remarks

4. Recent developments:i. Number of invasions falling.

ii. Pressure is now mainly for credit.

iii. Conflict prevention offices.

iv. Conflict hot-line.

v. Areas with more than 50% in forest are not susceptible to expropriation.

vi. Land Bank.