Essays on the economics of large-scale land acquisitions
2020
This thesis explores the economics of the most recent rush for land in
human history, with a series of different but intertwined essays. The surge
in Large-Scale Land Acquisitions (LSLAs) observed in the last two decades
expresses elements of discontinuity and novelty compared to other land
rushes that occurred in the past. First, despite the existence of a domestic
component in many of these land deals, the transnational nature of the
LSLAs phenomenon is predominant. Second, notwithstanding the
involvement of public actors at various levels, the demand for land behind
LSLAs has a strong private component, suggesting that a new international
market for land — with both new and traditional players — is in the
making. Third, the demand in this market reflects the multiple and
competing uses of land in the contemporary world: from agriculture and
mining to biofuel and energy production; but also from urban development
to conservation of natural ecosystems and biodiversity.
The Introduction dissects the approximately 120 million hectares (ha) of
land that were demanded through LSLAs since the beginning of the new
millennium. The chapter analyses the geographical distribution of LSLAs;
it scrutinises the different stakeholders typically involved; it reviews the
main purposes of the investments behind these land deals, as well as their
implementation and negotiation status; and it contextualises these data and
figures with regards to the existing literature, providing a general but
detailed overview of the main trends, drivers, and implications of LSLAs.
In this sense, this chapter paves the way for the following three essays.
Indeed, despite a narrative that is constantly imbued with words and
concepts — such as land deals, investments or acquisitions — borrowed from
to the economic jargon, the economics of LSLAs still remains a largely
unexplored field, both from a theoretical and from an empirical perspective.
Chapter I challenges the current lack of a systematic economic theory for
LSLAs by providing the foundations for a new conceptualisation of land in
economics. If the basis for this chapter is rooted in the past and retraces a
brief — and necessarily incomplete — history of land in the economic
thought, the essence of it rests very much on the novelties and peculiarities
of the current LSLAs phenomenon. Understanding the many faces of land
in economics in the context of transnational land deals proved to be a nontrivial
exercise. Nevertheless, this chapter provides a clear and simple
framework to disentangle the multiple — and sometimes conflicting —
values that are attached to land in the 21st century, thus helping us to
understand how and why different actors are trading large portions of land
across and within national borders.
Chapter II brings a more empirical perspective into the analysis. The
literature on LSLAs is polarised across two opposite positions: The
(relatively favourable) opinion of the advocates of LSLAs as a development
opportunity clashes with the (relatively unfavourable) view of those who
believe that this phenomenon is land grabbing perpetrated by unscrupulous
investors and complaisant institutions over the head of local populations.
Using data from the Land Matrix, I drew a line between speculative landbased
investments and productive ones, postulating that it is only when the
operations start that it becomes possible to evaluate the actual distribution
of costs and benefits among the various stakeholders.
With different probit and logit model specifications, I estimated the
marginal effects and the level of significance of different factors that are
either hindering or bolstering the operationalisation of investments
requiring LSLAs. Results from a broad sample of over 2,000 large-scale land
deals suggest that deal-specific features — such as the intention of the
investment and the size of the deal — influence the actual implementation
of these investments. The institutions of both origin and destination countries affect the implementation of LSLAs, but in ways that are not
always straightforward to interpret. Overall, the combined analysis of dealspecific
and institutional variables suggests that a more efficient mix of
regulations and policies in both destination and investor countries —
possibly with fewer rules, but clearer, more enforceable and diversified
upon different investment types — can improve the chances of actual
implementation of LSLAs, therefore enhancing the development potential
embedded in some of these deals, and at the same time reducing the risks
associated with land grabbing and predatory investments.
Chapter III explores the issue of fair compensation in LSLAs. The
overlap between formal and informal tenure regimes in many destination
countries often results in LSLAs leading to forced evictions of local
communities, land disputes and land conflicts. In this context, the right to
fair compensation and the principle of Free Prior and Informed Consent
(FPIC), are often seen as the solution to these problems. Yet, the existing
evidence suggests that — even when customary tenure regimes are
formally recognised and customary right owners are entitled to fair
compensation — little compensation, if any, is awarded to indigenous
people and local communities affected by LSLAs, often leaving space for
social unrest and generalised discontent. After revisiting the foundation of
the economics of fair compensation and tailoring the analysis around the
peculiarities of LSLAs, Chapter III presents — and solves by backward
induction — an original three-player sequential game for fair compensation
in transnational land deals, providing insights on how and why the fair
compensation principle can fail. Notably, the assumption of full and
symmetric information among the three players — namely the investor, the
local government and the local community — does not prevent the game
from ending with a land dispute, an outcome modelled as leading to
additional costs for all players.
The final chapter distils the main findings and connects the dots
between the previous chapters, by critically reviewing all the implications
of LSLAs that emerged during this study and by outlining the overall
contribution of this research.
Keywords:
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
0
References
0
Citations
NaN
KQI