equipment and new seed types. Large farmers may then accumulate land over
time, not because they are more productive as farmers but because they have
easier access to credit. During a drought or after a collapse in commodity
prices, smaller farmers are also less likely to get access to credit or be able to
run down a pool of savings to smooth consumption so are impelled to sell land
at low ‘distress’ prices to larger owners. In this case the market failures in credit
and insurance (not productivity differentials) would be driving changing
patterns of asset (land) ownership. Alternatively, large landowning may be a
proxy for local political influence which can be leveraged to acquire land from
smaller farmers, often through non-market or coercive means (Ravallion and
van de Walle, 2006).
Remarkably, the land market in Vietnam over the 1990s worked to re-allo-
cate land to more productive farmers. Political factors such as ethnicity,
connections with the local government, possession of a government job, or
initial (large) landowning did not have a significant impact on subsequent land
purchases. There was an increase in the share of land held under long-term
rights (from 25 per cent in 1993 to 88 per cent in 1998), which was related to
higher productivity. The holdings of land use certificates were found to be
associated with more secure land rights and with increased irrigation invest-
ment (Ravallion and van de Walle, 2006). The land market reforms in their turn
were associated with fav ourable macroeconomic outcomes. During the 1990s
Vietnam switched from being an importer to becoming the world’s second
largest rice exporter. The poverty headcount ratio fell from 58 per cent in
1992–93 to 37 per cent in 1997–98 (Deininger and Jin,2003). The increased
security and greater confidence in renting out land assets facilitated the migra-
tion of labour. Between 1993 and 1998 the share of households with at least
one member with an off-farm job increased from 30 to 55 per cent and the inci-
dence of migration by household members more than doubled (Deininger and
Jin, 2003). This sort of reform is not likely to work everywhere. The
Vietnamese reforms were specifically in the context of transferring state assets
to the control/ownership of individuals/households. Important to this result
was the relatively equal initial patterns of land ownership without any great
inequalities of power and asset ownership at the outset of reform and also a
strong and stable state committed to a gradual reform process. In Russia priva-
tization and marketization of state-owned assets in the late 1980s/early1990s
degenerated into a system of anarchic plunder and consolidation of organized
crime. This was the process that created simultaneously a massive increase in
poverty and the small number of billionaire oligarchs that still dominate poli-
tics, society and the economy in Russia today.
Complementary legal reform
The World Bank,De Soto and others advise that developing-country govern-
ments should focus on the compiling, registration and maintenance of land
property rights using modern technology (GPS, internet). They see property
224 Patterns and Determinants of Economic Growth