land, property rights and development

Last term we discussed several mechanisms through which property rights were related to both growth and the environment; among these, Graciela Chichilinsky pointed out that if a country has very poor property rights, natural resources (like land) look like open access resources and create an illusion of a comparative advantage in that resource. If the country opens to trade, then, the resource will be over-exploited (well, to be fair, the resource might have been over exploited before trade as well, but that situation would get worse). We also reviewed the Ostrom-related literature on (often informal) common property resource management and the ambiguous consequences of privatisation. Finally, we can't forget all the Engerman/Sokolof and Acemoglu-related literature on the relationship between the widespread existence of family farms, as opposed to plantation agriculture, the resulting income distributions and power structures in society, and the institutions that subsequently evolved over time.

It is a good idea to keep all these theories in mind when reading this story in the New York Times today about the ongoing 'land grab' taking place around the world, and often in Africa, these days. Even in Wisconsin the price of farm land is rising -- but how might the consequences of soaring farmland prices in Wisconsin differ from the outcome of the same increased demand for land in Africa? And why? It is not obvious at all, but the literature we reviewed last term should help us develop more nuanced and complex interpretations than are reflected by the journalists. What are the policy implications?