Abstract/Summary

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.