Perez-Zamorano, Abel
(2004)
Property rights revolution? Liberalisation of the ejido and the agro-sugar industry in Mexico.
PhD thesis, London School of Economics and Political Science.
Abstract
Sugar has traditionally been one of the most important agro-industries in Mexico. In spite of possessing significant comparative advantages it has recurrently suffered from a lack of investment and poor productivity, both under private and public ownership, and during periods of Import Substitution Industrialisation and recent economic liberalisation. This thesis adopts a Neo-Institutional approach to analyse the problems of the Mexican sugar industry during the 1990s based on the study of three 'ejido' communities in the state of Puebla. The thesis argues that successive institutional arrangements, particularly the over regulated and heavily bureaucratic 'agrarian' (ejido) regime have served to constrain the production of sugar cane and the sugar agro-industry as a whole. One consequence of these conditions has been that the burden of funding the sugar agro-industry has been devolved to government, thereby making investment subject to fiscal requirements rather than market conditions. Despite a de facto and latterly more formal withdrawal of the government from funding the sugar agro-industry the investment vacuum has not been filled by the private sector. In the wake of the 1992 reforms to the agrarian law the research also considers the importance of property rights in land to the sugar sector. The thesis argues that prior to 1992, agrarian reform in combination with other economically inefficient but politically useful regulations impeded the emergence of a land market in the ejidos. Without a formal land market, ejidos undertook land subdivisions creating a minifundista scheme rather than the conditions for agricultural intensification and the realisation of economies of scale. Small parcels and insecure property rights further condemned the ejidos to under-investment and poverty. Although the 1992 reforms attempted to regularise informal land transactions, I contend that change has not matched rhetoric: massive privatisation has not occurred and bureaucratic influence remains. At the outset of the twenty-first century we continue to witness the slow self-destruction of agrarian reform.
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