The land question in smallholder development in South Africa - Institutional Constraints to Small Farmer Development in Southern Africa - page 187

substantial contribution that asset ownership and its equitable distribution make for
economic growth. Such thinking is not new any longer with respect to asset ownership
but did have a long-running battle with the strong and contrary views of earlier growth
models such as those of Kaldor and Kuznets. It has now been established on the basis of
international experience that permanently higher levels of growth can be achieved if the
productive assets of the society, principally land for an agrarian society, are redistributed
in a way that is just and equitable. Aghion et al. (1999), Bardhan et al. (1999), and Piketty
(1999), are some of the development literature that have clearly demonstrated this in a
range of developing countries as part of efforts to develop new theories of growth. This
thinking is also consistent with the standard position that secure property rights contribute
to productivity growth through inducing those who enjoy such rights to exert more labour
and management effort and deploy higher levels of investment to enhance the fertility of
their land (Feder and Feeny, 1991). The role of land reform in economic development
has generally been examined against this background (De Janvry, 1984; Cusworth, 1992;
Delgado, 1995; Christiansen, 1996; Greenberg, 2002; and others).
There are more empirical studies, including those undertaken by the World Bank, which
provide cross-country evidence on this matter, the most notable being Deininger and
Squire (1998), Deininger and Olinto (1999) and World Bank (2003). Using cross-country
regressions, these studies have demonstrated that when the distribution of land ownership
is unequal, economic growth proceeds at a much slower pace, if at all. A comparison of
agricultural growth rates in China and South Africa over the period 1980-1993 illustrates
this point more sharply. While Chinese agriculture based on a smallholder model operated
on small farms of less than 2 ha on average generated a rate of growth of 5.3% p.a. during
that period, South Africa's agriculture based mainly on 60,000 commercial farmers who
controlled 102 million ha of land, grew at 1.8% over the same period (Eicher and Rukuni,
1996). What this poor growth performance meant for rural living condition in South Africa
is an all too familiar picture. This can be contrasted with the very significant contributions
that a more equal distribution of land seemed to have made on human development
indicators in China, consistent with positive economic performance described earlier
(Burgess, 1998).
Household level effects have also been shown to be quite important. A large amount of
studies have also established the important positive impact of a more equal distribution
of land on household level welfare and food security, among other favourable outcomes
(Blanchflower and Oswald, 1998;). In India, it was shown that land reform positively
impacted on the poverty situation in the country and that, at least in one State of the
country, namely the West Bengal, productivity increases resulted from reforms in the
tenancy arrangements (Besley and Burgess, 1998; Banerjee et al. , 1998). Despite very strong
criticisms by several organized groups, it has been shown that the reforms in the Philippines
have produced some significant changes in the investment patterns of beneficiaries of land