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Land Tenure Insecurity and Economic Growth in Brazil


  • Claudio Araujo
  • Catherine Araujo Bonjean
  • Jean-Louis Combes
  • Pascale Combes-Motel


We examine the consequences of land tenure insecurity on economic growth in Brazil. We use an overlapping generations model with two sectors: an agricultural sector and a manufacturing sector. Land is specific to the agricultural sector and capital goods are specific to the manufacturing sector. Moreover land is a fixed production factor. Saving takes the form of either land or capital goods purchases, and saving composition depends on transaction costs generated by land tenure insecurity. It is shown that land tenure insecurity implies a decrease in land prices and a reallocation of savings in favour of capital goods. Two econometric restrictions can be tested on a panel of the Brazilian federation states: land tenure insecurity has a negative impact on land prices and a positive one on economic growth. Land tenure insecurity is proxied by the number of squatters. These two restrictions are not rejected. JEL Classification: O41, Q15, O54

Suggested Citation

  • Claudio Araujo & Catherine Araujo Bonjean & Jean-Louis Combes & Pascale Combes-Motel, 2006. "Land Tenure Insecurity and Economic Growth in Brazil," Revue d’économie du développement, De Boeck Université, vol. 14(5), pages 75-91.
  • Handle: RePEc:cai:edddbu:edd_205_0075

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    land tenure insecurity; squatters; overlapping generations model; land prices; economic growth; Brazil;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean


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