Quarterly Journal of Political Science > Vol 15 > Issue 2

Does Equalizing Assets Spur Development? Evidence From Large-Scale Land Reform in Peru

Michael Albertus, Department of Political Science, University of Chicago, USA, albertus@uchicago.edu , Bogdan G. Popescu, Department of Social and Political Sciences, Bocconi University, Italy, bogdan.popescu@unibocconi.it
Suggested Citation
Michael Albertus and Bogdan G. Popescu (2020), "Does Equalizing Assets Spur Development? Evidence From Large-Scale Land Reform in Peru", Quarterly Journal of Political Science: Vol. 15: No. 2, pp 255-295. http://dx.doi.org/10.1561/100.00019033

Publication Date: 09 Apr 2020
© 2020 M. Albertus and B. G. Popescu
Econometric models,  Labor economics,  Public economics,  Elections,  Autocracy,  Comparative political economy,  Comparative politics,  Elections,  Political economy,  Political history,  Political parties,  Public policy
Inequalityeconomic developmentland reformpovertyproperty rights


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In this article:
Land Reform and Development 
The Peruvian "Experiment" 
Peru's Agrarian Reform Zones 
Data and Research Design 
Alternative Explanations 


Many scholars point to landholding inequality as a root cause of the ``Great Divergence'' between rich and poor countries over the last few centuries. Large landowners who fear being eclipsed by the masses or rival industrial elites and seek to preserve social and economic rents underinvest in public goods, block rural–urban migration, and keep peasants poor and subservient. By eliminating large landowners and enabling new policy initiatives, extensive land reform holds potential to vastly and directly improve peasant livelihoods, facilitate human capital formation, and enhance economic and social mobility. We demonstrate that this failed to occur in Peru despite a sweeping land reform that redistributed half of all private land to peasants. Using original localized land reform data and a geographic regression discontinuity design that exploits unevenness in reform implementation, we show that greater land reform intensity in Peru generated more poverty and stunted human development. This occurred because land reform encouraged rural demographic stasis, generated widespread land informality and property rights instability, and reduced political competitiveness. Although the government's distortionary management of post-reform cooperatives certainly did not maximize their development potential, evidence suggests that Peru's land reform failed to promote development because of broader inherent features of the reform.