Land Tenure, Price Shocks and Insurgency: Evidence from Peru and Colombia
Jenny Guardado Rodriguez
In this paper I show that land arrangements aect armed conict by moderating the impact of adverse income shocks to rural households hence changing the opportunity cost of armed conict. Based on a simple framework of labor allocation, I show how peasants enjoying the full value of their marginal production (e.g. small landowners and xed-rent tenants) are more likely to devote labor to conict activities in the presence of commodity price shocks than peasant enjoying only a share of their marginal product (e.g. sharecroppers, communal lands). Using detailed data on district level land arrangements, crop production and armed conict in Peru, I nd that a negative coee price shock increases the intensity of violence in coee producing districts compared to non-coee ones. Yet, such spikes in violence are signicantly smaller in districts with a greater number of shared property arrangements as opposed to districts with greater individual land ownership. An examination of the mechanisms at work shows that the eect of land tenure on confict is driven by its eect on local labor supply in the face of income shocks, hence consistent with the predictions of the theoretical framework. A cross-validation exercise for the case of Colombia further corroborate these findings.
Event: Annual World Bank Conference on Land and Poverty 2015
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