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The Political Value of Land: Political Reform and Land Prices in Chile

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  • Jean‐Marie Baland
  • James A. Robinson

Abstract

In this article, we argue that when patron‐client relations are grounded in economic relationships, such as between landlord and worker, we should expect clientelism to influence not just how public policy, the state, and the political system work, but also how the economy works. We develop a simple model of the economic consequences of electoral clientelism when voting behavior can be observed. Landlords/patrons provide economic rents to workers, and in exchange workers vote for parties favored by landlords. As votes are used by the landlords to accumulate political rents, vote control increases the demand for labor and for land. The model implies that the introduction of the Australian ballot, which destroys this form of clientelism, should lead to a fall in the price of land in those areas where patron‐client relationships are strongest. We test the predictions of the model by examining in detail the evolution of land prices in Chile around May 31, 1958, for which we collected original data. A characteristic of rural Chile at this time were patron‐client relations based on the inquilinaje system, by which a worker, the inquilino, entered into a long‐term, often hereditary, employment relationship with a landlord and lived on his landlord’s estate. We show that the introduction of the Australian ballot in 1958 led to a fall of about 26% in land prices in the areas where these patron‐client relationships were predominant.

Suggested Citation

  • Jean‐Marie Baland & James A. Robinson, 2012. "The Political Value of Land: Political Reform and Land Prices in Chile," American Journal of Political Science, John Wiley & Sons, vol. 56(3), pages 601-619, July.
  • Handle: RePEc:wly:amposc:v:56:y:2012:i:3:p:601-619
    DOI: 10.1111/j.1540-5907.2012.00585.x
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    Cited by:

    1. Leopoldo Fergusson & Horacio Larreguy & Juan Felipe Riaño, 2022. "Political Competition and State Capacity: Evidence from a Land Allocation Program in Mexico," The Economic Journal, Royal Economic Society, vol. 132(648), pages 2815-2834.
    2. Isaías N. Chaves & Leopoldo Fergusson & James A. Robinson, 2009. "He Who Counts Elects: Determinants of Fraud in the 1922 Colombian Presidential Election," NBER Working Papers 15127, National Bureau of Economic Research, Inc.
    3. Vlaicu, Razvan, 2024. "Inequality Persistence and Policymaking Constraints: Explaining Regional Data Patterns," IDB Publications (Working Papers) 13546, Inter-American Development Bank.
    4. Christodoulos Stefanadis, 2020. "Social conflict, property rights, and the capital–labor split," Journal of Theoretical Politics, , vol. 32(4), pages 582-604, October.
    5. Alice Guerra & Mogens K. Justesen, 2022. "Vote buying and redistribution," Public Choice, Springer, vol. 193(3), pages 315-344, December.
    6. Beg, Sabrin, 2021. "Tenancy and clientelism," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 201-226.
    7. Marco Percoco, 2018. "Wealth inequality, redistribution and local development: The case of land reform in Italy," Environment and Planning C, , vol. 36(2), pages 181-200, March.
    8. Juan David Torres, 2022. "Shaping inequality? Property rights, landed elites and public lands in Colombia," Documentos CEDE 20514, Universidad de los Andes, Facultad de Economía, CEDE.
    9. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, October.
    10. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2013. "Democracy, Redistribution and Inequality," NBER Working Papers 19746, National Bureau of Economic Research, Inc.

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