Agrarian Reform and Democracy: Lessons from the Philippine Experience

• Main Author: Lanzona, Leonardo A, Jr
• Format: text
• Published: Archīum Ateneo 2019
• Subjects: Market-led agrarian reform; democracy; transaction costs; agency theory; Philippines; Economics
• Online Access: https://archium.ateneo.edu/economics-faculty-pubs/4; https://journals.sagepub.com/doi/abs/10.1177/0976399619879866
• Institution: Ateneo De Manila University

Throughout the country’s history, agrarian reform in the Philippines has long been a combative issue and one that is often preceded by some form of instability and violence. Used mainly as a tool to garner grassroots support, agrarian reforms were formally institutionalized by setting up regulations on land size and contracts. Despite efforts to integrate the reforms to the markets, including the clustering of small hectares (ha) of land into large corporate estates, the benefits of the Agrarian Reform Program remained elusive under conservative demarcations set by regulations, including the definition of property rights, transformation or maintenance of state structures and the contract limitations to be formed at the production level. Land continues to be redistributed favorably to former landowner elites. This study finds that inequality in land ownership persists as the institutions set de facto political power to the elites. Under this condition, the equitable redistribution of land is an impossibility. The Philippine Agrarian Reform Programs have been hampered by high transaction costs and inadequate credible commitments, thus resulting in the erosion of market forces and elite capture of institutions. Based on agency theory, the existing regulation-based programme, which relies on the state’s power to expropriate, should give away to a more demand-driven, community-led Agrarian Reform Program that gives the parties more space to negotiate and bargain about the final allocation of the land. This involves the promulgation of relational contracts and the creation of more democratic institutions.