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International Land Acquisitions and Hal Varian’s Concept of Fairness

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  • Luis Tomás Montilla Fernández

    (University of Hamburg)

  • Johannes Schwarze

    (University of Hamburg)

Abstract

Prices of, specifically, primary foods spiked during the global food crisis of 2007–2008. This motivated governments with food security concerns and profit-seeking investors to engage in large-scale land acquisitions (LSLA) in mainly least developed countries (LDCs). In economic terms, this reaction is desirable for two reasons: (1) more efficient production lowers food prices and increased food production improves food security; on the other hand, (2) least developed host countries benefit from development opportunities. Drawing on Hal Varian’s (1974) concept of fairness, this article contributes an ethical perspective on the matter: particularly based on the analysis of 81 investment contracts, this partial analysis understands LSLA into Sub Saharan LDCs as a socio-economic reform. It focuses only on two affected groups when land is redistributed from LDCs’ local smallholders to foreign investors. It concludes that LSLA predominantly contradict Varian’s concept in practice as they hardly if at all improve the situation of local smallholders who might in extreme cases even suffer human rights violations.

Suggested Citation

  • Luis Tomás Montilla Fernández & Johannes Schwarze, 2016. "International Land Acquisitions and Hal Varian’s Concept of Fairness," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(3), pages 281-295, October.
    • Handle: RePEc:spr:homoec:v:33:y:2016:i:3:d:10.1007_s41412-016-0023-2
    DOI: 10.1007/s41412-016-0023-2
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    References listed on IDEAS

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    1. Varian, Hal R., 1974. "Equity, envy, and efficiency," Journal of Economic Theory, Elsevier, vol. 9(1), pages 63-91, September.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. Klaus Deininger & Derek Byerlee & Jonathan Lindsay & Andrew Norton & Harris Selod & Mercedes Stickler, 2011. "Rising Global Interest in Farmland : Can it Yield Sustainable and Equitable Benefits?," World Bank Publications - Books, The World Bank Group, number 2263, December.
    4. von Braun, Joachim & Meinzen-Dick, Ruth Suseela, 2009. ""Land grabbing" by foreign investors in developing countries: Risks and opportunities," Policy briefs 13, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Gianpaolo Rossini, 2017. "Land Grabbing: Last Ditch Effort of Colonialism? A Survey of a Few Contributions and a Couple of Suggestions," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 34(1), pages 79-96, April.

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    More about this item

    Keywords

    Agricultural investments; Ethics; Economic fairness;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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