Rural Poverty and Development Strategies in Latin America

Rural Poverty and Development Strategies in Latin America 455

© 2006 The Author.Journal compilation © 2006 Blackwell Publishing Ltd, Henry Bernstein and Terence J. Byres.Journal of Agrarian Change, Vol. 6 No. 4, October 2006, pp. 455–508.

Journal of Agrarian Change, Vol. 4 No. 1 and 2, January and April 2004, pp. 00–00.Journal of Agrarian Change, Vol. 6 No. 4, October 2006, pp. 455–508.

© 2006 The Author.Journal compilation © 2006 Blackwell Publishing Ltd, Henry Bernstein and Terence J. Byres.

Survey Article

Rural Poverty and Development Strategiesin Latin America

CRISTÓBAL KAY

Several approaches to the study of poverty are discussed, to learn from theirstrengths as well as their weaknesses. For this purpose the concepts ofmarginality, social exclusion, new rurality and rural livelihoods, as well asthe ethnic and gender dimensions of poverty, are examined. The debate on thepeasantization (capitalization) or proletarianization (pauperization) of thepeasantry sets the scene for the analysis of the different strategies adoptedby peasants and rural labourers to secure their survival and perhaps achievesome prosperity. In examining the success or failure of interventions bygovernments, civil society and international organizations in the reduction ofpoverty, it is claimed that the State has a key role to perform. Furthermore,it is argued that poverty is caused and reproduced by the unequal distributionof resources and power at the household, local, national and internationallevels. Therefore, the starting point for the eradication of poverty has to bethe implementation of a development strategy that addresses such inequalitieswhile at the same time achieving competitiveness within the global system.

Keywords: poverty studies, rural poverty, poverty reduction develop-ment strategies, rural development, Latin American peasants

INTRODUCTION: THE RISE OF POVERTY STUDIES

The purpose of this article is to contribute to the debate on rural poverty in LatinAmerica. A variety of approaches to rural poverty are discussed and severaldevelopment strategies are evaluated as to their impact on reducing poverty.This article presents some of my reflections on rural poverty, but it doesnot pretend to be a systematic and extensive analysis on rural poverty in theregion.

Cristóbal Kay, Institute of Social Studies, P.O. Box 29976, 2502 LT The Hague, The Netherlands.e-mail: [email protected]

Research for this paper was made possible by the financial support of the International Fund forAgricultural Development (IFAD). I am grateful to Raúl Hopkins, of IFAD’s Latin American andCaribbean Division, for his encouragement and detailed comments. I also appreciate the suggestionsreceived from Terry Byres, Tom Brass, Max Spoor and Saturnino Borras (Jr.). Needless to say, anyremaining shortcomings are my responsibility. This is a substantially revised and expanded versionof a paper published in The European Journal of Development Research, 17 (2), 2005.

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Agricultural modernization in Latin America, with its emphasis on capitalintensive farming and the squeeze on the peasant economy, means that ruralpoverty remains a persistent and intractable problem. Structural adjustmentprogrammes (SAPs) and stabilization policies of the 1980s had in general adetrimental impact on poverty, although significantly more in the urban thanrural sector.1 But the proportion of people in poverty still remains higher inrural than in urban areas, although in absolute terms poverty has shifted to theurban areas due to the high rates of rural to urban migration. Adjustmentpolicies exacerbated poverty as government expenditure on social welfare andsubsidies for basic foods and other essential commodities were cut back quitedrastically. Subsequently some governments ameliorated this negative impactby targeting welfare measures more directly to the poor and by introducingpoverty alleviation programmes. During the 1990s rural poverty started to dec-line but only very slowly and marginally. While in 1990 65.4 per cent of the ruralpopulation in Latin America were below the poverty line, this had fallen in 2002to 61.8 per cent. The corresponding data for extreme poverty or indigence are40.4 per cent and 37.9 per cent, respectively (ECLAC 2004, 282–3). Meanwhile,urban poverty fell from 41.4 per cent to 38.4 per cent and urban indigence from15.3 per cent to 13.5 per cent during the same period (CEPAL 2005, 324–5).2

Neither the state-driven import-substitution industrialization (ISI) develop-ment strategy, roughly from the late 1940s to the 1970s, nor the neoliberalmarket-driven policies since the 1980s has been able to resolve the problems ofrural poverty, inequality and the exclusionary nature of the rural developmentprocess.3 It was only during the brief land reform interlude that sections ofthe peasantry began to emerge from their marginalized situation, but to see theirhopes for a better future vanish with the counter-reform and neoliberal project.4

However, these past upheavals have created new opportunities as well as con-straints, some of which are examined in this article.

In my view, the main causes of rural poverty are structural, being related tothe unequal land distribution and to the uneven power system. Access to capital,technology and markets, as well as to knowledge and information systems, isbecoming increasingly important in determining the success of an agriculturalenterprise. But the sustainability of peasant agriculture and the alleviation of ruralpoverty depend on wider social and political issues as well as on a favourable

1 The impact of SAPs on rural poverty varied significantly between Latin American countries (seeTrejos 1992). For the increasing urban character of poverty as well as the persistence of rural povertyin Latin America, see Ibáñez (1990).2 An empirically grounded analysis of rural poverty which usefully distinguishes between smallfarmers, landless farm workers and rural non-farm workers, as well as differentiating poverty byethnicity, gender and residence can be found in some of the thematic and country studies in Lópezand Valdés (2000). A useful up-to-date overview on rural poverty in Latin America is given byDirven (2004).3 However, so far the record of the ISI period is considered to have been better than that ofthe current neoliberal period in terms of growth, equity, employment and poverty reduction (seethe superb study by Thorp 1998).4 For a thorough and detailed study of neoliberal agrarian policy, see Gómez Oliver (1994). For anoverview of the agrarian reform and counter-reform, see Kay (2002a).



economic context. Tackling the root causes of poverty will require majorland redistribution and rural investments which raise employment opportunitiesand improve agricultural productivity. Policies that promote rural non-farmactivities may also help to reduce rural poverty, but this should not be done atthe expense of policies promoting agricultural development. Farm and non-farmactivities should reinforce each other and with appropriate policies governmentscan encourage the development of these linkages. Only by an assault on variousfronts will it be possible to alleviate rural poverty significantly. In short, attack-ing rural poverty raises questions about development strategy and ultimatelyabout the political power of the peasantry.

In the last couple of decades there has been a rush by policy makers, inter-national funding agencies, researchers, non-governmental organizations (NGOs)and others to learn more about the nature and causes of poverty as well as topropose a variety of measures for reducing and possibly eliminating poverty.This sudden flood of research and publications on poverty has led some scholarsin Latin America to coin the term ‘pobretología’ which perhaps can be translated as‘povertology’. This new concern with poverty issues partly arises from the sharpincrease in poverty during the ‘lost decade’ of the 1980s when Latin Americancountries had to deal with the crushing burden of the debt crisis which led to theimplementation of so-called ‘structural adjustment programmes’ (Solana 2002).The SAPs opened the door for the shift to, or deepening of, neoliberal policies.However, the neoliberal turn in development strategy failed to deliver the pro-mised economic growth and poverty reduction, although it managed to stabilizethe economies and open them further to the world market. As a consequence ofthe persistence of poverty some governments have started to implement morevigorous social policies and specifically poverty reduction measures but withlittle results so far; although there are some exceptions, like Chile.

The fact that today there are far more studies on rural poverty than in the pastdoes not necessarily mean that this will result in less poverty. There are far toomany intervening factors between studies on poverty and its actual reduction.However, it is likely that a better understanding of the causes of poverty maylead to the design of more appropriate poverty reduction policies. Hopefully, theflood of poverty studies will in the end lead to a greater social and politicalcommitment towards its reduction, if not eradication. But it might also turn outto be a largely cosmetic exercise to soothe our consciences and to allow govern-ments and other powers to claim that they are doing something about the prob-lem of poverty while in fact avoiding dealing with the major causes of poverty.

It is not surprising to find that different and contesting views exist about thecauses and nature of poverty given the complexity of the problem.5 Some ofthese differences arise from ideological and political differences which are notalways made explicit. Sometimes similar terms are employed but with different

5 Such differences in poverty discussions can be observed, for example, comparing the followingimportant texts ranging from orthodox to heterodox views: World Bank (2001); IFAD (2001);Hulme and Shepherd (2003); Webster and Engberg-Pedersen (2002); Chossudovsky (1996); andCammack (2001).

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meanings and thus consequences for the analysis and policy recommendations.It is not my purpose in this article to demystify the uses and abuses of certainterms as some authors and institutions employ these with a political rather thana theoretical scientific intent, although I acknowledge the importance of con-ceptual clarity and the usefulness of such an exercise.6 But in this article I doexamine some of the varied views on poverty, although I principally present myown understanding of the problematique. Different methodologies are alsoemployed in poverty analyses. For example, some studies rely far more extensivelyon statistical techniques, econometric models and so on, while others delve intolife histories and use more qualitative types of analysis. Some studies take anhistorical or interdisciplinary approach, while others focus on a particular dimen-sion such as the economic, anthropological, social, cultural or political.7 I cer-tainly do not wish to go into the whole debate about the definition of povertyand its measurement, which I better leave to the experts. My own approachintends to be interdisciplinary within a political economy and developmentstudies context.

While in the past there were far fewer poverty studies, this does not necessarilymean that many aspects closely related to poverty were not analysed. To acertain extent it could even be argued that those apparently non-poverty studies,or less explicitly poverty analyses, were actually providing deeper insights thansome of the current ‘povertology’ studies. Often researchers tend to reinvent thewheel through their lack of knowledge or memory of earlier studies. For exam-ple, past studies on the agrarian structure which highlighted the high degree ofinequality and the lack of access to sufficient land by the mass of the peasantryprobably provided a better analysis on the causes of poverty than many of thepoverty studies of today like those which focus on factors which are often aconsequence of poverty, such as the low levels of education of many rural inhab-itants. Even if the State were to provide adequate rural schooling, it is often thecase that poor families cannot afford to send their children to school due to lackof resources and because they need their children to work at home or elsewhereso as to survive.

Similarly, past studies on internal colonialism, marginality, structural hetero-geneity and dependency did deal with aspects of poverty without necessarilyalways using the term. I am surprised to find that many current studies onpoverty fail to draw upon this earlier literature given that they can provide usefulinsights.8 Thus it might be appropriate to return to some of the earlier studies asthis could enrich current analyses of poverty. However, the use of new conceptssuch as social capital, social exclusion, new rurality, and rural livelihoods whilesometimes reflecting a new fashion do often indicate a change in reality. In this

6 For an excellent analysis of this kind, see Cammack (2004). Cammack’s sharp and provocativeconclusion that ‘under the guise of attacking poverty, the World Bank is attacking the poor’ (2002,134) is surely going to be contested. For a critique of the World Bank’s analysis and policy onpoverty from a Polanyian perspective, see Kirby (2002).7 A useful review of recent studies on poverty in Latin America is done by Gindling (2005).8 For rare exceptions, see Tejo (2000) and Munck (2005).



sense the new terminology may be justified, although the lack of reference tothe earlier thinking on the problem is unfortunate.9 These issues are discussed inthe next section.

NEW APPROACHES AND DIMENSIONS OF POVERTY

From Marginality to Social Exclusion

One of the first systematic ways of analysing poverty in the Latin Americancontext was through the so-called marginality studies that flourished during the1960s and 1970s and were principally undertaken by Latin American social scien-tists. As expressed by a US scholar at the time:

It is a sad commentary on contemporary social science that ‘marginality’represents practically the first attempt in a century to develop a conceptthat is capable of theoretically analyzing (not just describing) the structuralposition of that sector of the population conventionally referred to as ‘thepoor’. (Johnson 1972, 274)

Marginality analysis focused on the urban poor, especially those living in shanty-towns or squatter settlements, and studies on the rural poor were less common.Marginality meant that people had very limited, precarious or no access at all toeducation, health services, formal employment, social and political institutions,and so on. At the time two different approaches to marginality developed whichdrew their inspiration from modernization theory and Marxist theory respec-tively. This is not the place to discuss at length these two approaches, but it isuseful to highlight some distinctive difference between them since this is relevantfor the contemporary discussion on poverty.10

The modernization approach viewed marginality as arising from the lack ofparticipation and integration of certain individuals and groups in the economic,social and political system. Marginal people did not have the appropriate socialand psychological attributes or the values and norms to participate in the processof modernization. In a way marginal persons were seen as responsible for theirown predicament and unable to overcome their situation of marginality. Thusgovernments were asked to design special programmes of education, employ-ment, economic and social assistance, and so on, so as to facilitate their integra-tion into the country’s modernization process.

Meanwhile, the Marxist approach took an opposite view by arguing thatmarginality arose due to the particular integration of developing countries intothe world capitalist system. This approach is thus firmly located within depend-ency theory. The ‘marginal mass’, the concept designed by José Nun (1969),

9 See, for example, the interesting forum held at the XXIV Congress of the Latin AmericanStudies Association (LASA) in March 2003 in which the following scholars participated: MercedesGonzález de la Rocha, Elizabeth Jelin, Janice Perlman, Bryan R. Roberts, Helen Safa and Peter M.Ward (González de la Rocha et al. 2004).10 I have discussed at length the two approaches to marginality in Kay (1989, 88–124).

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arose out of the process of ‘dependent development’, the term created by FernandoHenrique Cardoso (1973), or the ‘development of underdevelopment’, theexpression coined by André Gunder Frank (1966), which created a surplus labourthat the dependent country was unable to absorb in the formal sector of theeconomy. This led to the emergence of the ‘marginal pole’ of the economy,which is the term used by Aníbal Quijano (1974), or what later was referred to asthe informal sector, as those unable to find employment in the formal sector hadto create their own survival mechanisms. However, as forcefully argued byFrancisco de Oliveira (1985), the so-called ‘marginal’ people make a major con-tribution to the process of capital accumulation by providing a large supply ofcheap (underpaid) labour and cheap (undervalued) commodities. It is the capitalistenterprises of the formal sector of the economy which largely benefit from thissituation as they can make use of this cheap labour whenever required by onlypaying poverty wages, making no social security payments, hiring and firingmore or less at will. Furthermore, by engaging in sub-contracting arrangementswith the informal sector, they also take advantage of the cheap family householdlabour, especially women and children. While Nun understands marginalityin terms of a process of exclusion, de Oliveira views it as a process of precariousand exploitative integration which is particularly prevalent in dependentcountries. Quijano’s position can be interpreted as the link or bridge betweenthese two conceptions of marginality and poverty within dependency theory.The subsequent informal sector literature explored the multiple links betweenthe formal and informal sectors of the economy (see, among others, Tokman1978; Bromley 1978).

What is of particular relevance for the present reflection on rural poverty is tonotice that in the modernization view marginality and poverty are largelyreduced to certain attributes of individuals or groups that disable them fromparticipating in the economic, social, political and cultural life of the country. Inthe Marxist-dependency view, however, marginality is a structural conditionthat is created and reproduced by the current world capitalist system and theprocess of globalization (or imperialism in Marxist terminology). Thus, people’spoverty is ultimately due to their particular subordinate integration into thenational and world economic system.

Although it is not always acknowledged, the Latin American debate on mar-ginality foreshadowed the current concerns with social exclusion. The discussionabout marginality and poverty is today framed by the debate on ‘social exclu-sion’ which is a concept largely diffused initially by the International Institute forLabour Studies (IILS) and the International Labour Organization (ILO).11

The concept of social exclusion has acquired different meanings from moreradical to less radical interpretations of the existing socio-economic and politicalsystem. In a way that concept has been appropriated by orthodox institutions

11 See, for example, Rodgers et al. (1995) and Figueroa et al. (2001). The IILS in Geneva and theUnited Nations Development Programme (UNDP) started a series of literature studies on the ‘pat-terns and causes of social exclusion’ already at the beginning of the 1990s, if not earlier.



and writers who have given it a meaning stripped from its original radicalintent. The crucial distinction between radical and other approaches is that inthe former poverty is viewed as an active process of exclusion brought aboutby the dynamics of the system, while in the latter it is portrayed as a conditionaffecting certain individuals or groups which is often seen in static terms. In thewords of Ray Bush: ‘in these new circumstances of neo-liberal hegemonypoverty is everywhere re-badged as social exclusion and underpinned by individualinadequacies’ (2004, 690).

While Munck acknowledges that the concept of social exclusion can be put toconservative uses he, nevertheless, argues that it:

can serve as a powerful term to analyze (and combat) global inequality. Itallows us to break with the economistic and individualistic parameters oftraditional concepts of poverty. It is a paradigm that is multidimensionaland multidisciplinary in the way it approaches social inequality. It is notstatic, as most conceptions of poverty tend to be, but is dynamic, focusingas it does on the ongoing processes of social exclusion. Finally, it is rela-tional and understands that poverty has as its counterpart wealth and thatglobalization has generated huge levels of deprivation but also a massiveconcentration of wealth in a few hands. (2005, 26)

Three dimensions can be distinguished in the process of social exclusion andpoverty: economic, political and cultural. Economic exclusion refers to marginaliz-ation from the productive system which expresses itself in unemployment,underemployment or insecure employment, lack of assets and credit, vulnerability,and so on. Political exclusion arises out of unequal access to individual andcollective rights within civil society, limited citizenship, social subordination,etc. Cultural exclusion involves lack of recognition and discrimination againstthe cultural values and practices of subordinate groups by the dominant societyleading to discrimination, racism and so on. These three dimensions of socialexclusion are inter-related and self-reinforcing processes that perpetuate the pro-blem of poverty (Altamirano et al. 2003).

Social exclusion is based on a disadvantaged inclusion in the social system,although this may sound paradoxical: it is a matter of second-class citizenship(Roberts 2004). It is important to understand that ‘poverty does not emergebecause of exclusion but because of poor people’s “differential incorporation”into economic and political processes’ (Bush 2004, 673). Thus some authorsquestion the usage of the ‘social exclusion’ discourse in development and povertystudies. In this critical view, ‘although it has the potential to focus attention onthe disabling effects of poverty, its most common usage often fails to capturehow poverty can flow not only from exclusion but also from processes ofintegration into broader economic and social networks’ (du Toit 2004, 987).Therefore, to understand the dynamics of poverty it is necessary to examine theprocesses of inclusion and exclusion as well as the relations between the domi-nant and dominated classes, groups and individuals as it is through their multiplelinkages that livelihoods of the poor contribute to the enrichment of the wealthy

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and thus to the continuing misery of the poor. It may therefore be moreappropriate, perhaps, to speak of ‘exclusionary inclusion’ or ‘discriminatoryinclusion’ or distinguish between different types or degrees of exclusion aseven the most excluded persons have some sort of relationship with either theeconomic, social or political system.

Social Capital: Coping Strategy or Way out of Poverty?

In the last decade or so the concept of social capital has become fashionable. Atfirst it was being used by sociologists and anthropologists, but soon it wasappropriated by economists and being widely propagated by the World Bank.12

While in some respects it is a useful extension of the concept of capital, as wasthe case with the notion of human capital, it can also lend itself to divertingattention from other sources of capital, such as the capital embodied in naturalresources (land, water, forests, minerals, etc.), infrastructure (roads, buildings,etc.), machinery and equipment, and finance. These other forms of capital aregenerally more important than social capital and the latter usually has only mean-ing in terms of poverty reduction when it is able to activate or lead to access tothese other forms of capital.

The concept of social capital is seen by some analysts as offering the possibilityof a better understanding of poverty which may even lead to a new paradigm.13

Many of those who use the concept of social capital find that it allows them tohighlight the agency and capabilities of the poor. It is argued that while admit-tedly the poor have little, if any, access to the other capital resources, they oftendo have substantial social capital, such as social networks and connections throughmembership of organizations, clientelism, and so on, which allows them toweather subsistence crises and might even afford them the possibility of capitalaccumulation and a way out of poverty.

While the notion of social capital has its uses, it should not detract from focusingon important issues such as the concentration of ownership and the unequaldistribution and access to assets and other forms of capital. It is an illusion tothink that by attempting to mobilize via public policy, or other means, the socialcapital of the poor a way can be found out of poverty.14 I do not deny that undercertain circumstances, such as with a progressive reformist or revolutionary State,it is possible to develop a positive state–society synergy that benefits the rural poor.However, proponents of social capital generally do not advocate the radical

12 One of the first thinkers to formulate the concept of ‘social capital’ is the French sociologist PierreBourdieu (1980, 1986). His vision is radical and quite different from that espoused later by the WorldBank. For a forceful and illuminating critique of the World Bank notion of social capital, see Harriss(2002). For a reflexive analysis of the debate on social capital, see Bebbington (2004a). For a study ofsocial capital as an idea and practice at the World Bank, see Bebbington et al. (2006).13 For an illustration of the uses of the notion of social capital within the Latin American ruralcontext, see Durston (2002) and Atria et al. (2003).14 For a devastating critique of the World Bank’s interpretation and use of the concept of socialcapital as a model for action in the Post-Washington Consensus context, see Bretón Solo de Zaldívar(2005).



political mobilization of the rural poor.15 Quite the opposite, policies or meas-ures of social capital mobilization are often used to prevent tackling the farmore important problem of the unequal distribution of assets and other forms ofcapital.16 By attempting to find an intermediary position between neoliberalismand statism, the notion of social capital is in fact disregarding issues of politicalpower, social conflict and the wider political economy (Fine 2001).

New Rurality: Survival or Accumulation?

The concept of ‘new rurality’ has increasingly been used over the last decade,especially within the Latin American context, for the analysis of poverty,although not always principally so. Does Latin America’s new rurality providea means for escaping poverty or, on the contrary, does it contribute to its con-tinuation? To answer this question it is necessary to be aware that the term newrurality is used in two senses.17 The most common usage refers to the characteri-zation of the transformations experienced by the rural sector largely as a con-sequence of the processes of globalization and the implementation of neoliberalpolicies.18 These most significant transformations refer to the increasing multi-or pluri-activity of peasant farm households which are engaging in an increasingvariety of farm but also non-agricultural rural activities such as handicrafts, work-shops, commerce and tourism. Some members of the family household alsowork as wage labourers in local agro-industrial enterprises, road and housingconstruction sites, capitalist farms, and so on. Increasingly women have beendrawn into the wage labour market, although often in a precarious manner andreceiving low wages. This shift to wage labour may result in temporary or morelong-term migrations to other rural areas or even urban areas and also to migra-tions to other countries. Those who migrate send remittances to their peasantfamily members. Thus the activities and sources of income of peasant house-holds have become much diversified.

While some analysts view these transformations as a way to get out ofpoverty and even as a mechanism for capital accumulation and enrichment,others see it as a mere survival strategy of peasant households which experienceincreasing difficulties in competing with cheap food imports and local capitalistfarmers. Contrary to the arguments of those in favour of globalization andliberalization, peasant farmers are generally unable to shift to non-traditional

15 For a discussion of the literature on social capital that asserts that relations of trust and coopera-tion between state representatives and the rural poor result in positive state–society interactions, seeDas (2005).16 For a critical examination of the concept of social capital, see Harriss and Renzio (1997).17 These two meanings of ‘new rurality’, which are often not clearly distinguished in the literature,are well represented in the excellent collections by Giarracca (2001), Pérez et al. (2001) and Pérez andFarah (2004). For an analysis of new rurality within the Central American context, see Clemens andRuben (2001).18 According to Sergio Gómez (2002), most aspects of the so-called ‘new rurality’ were alreadypresent before the neoliberal turn. He argues, with some irony, that what is new is the late percep-tion of these changes by analysts.

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exports (for example, flowers, fruits, vegetables and soya beans) which havebecome more profitable since globalization and liberalization. Thus peasants getsqueezed by neoliberal policies as, on the one hand, they cannot compete withthe cheap food imports (especially if free trade agreements are implemented) and,on the other hand, do not benefit from the new export opportunities due to lackof capital, technical know-how, marketing skills, lack of economies of scale, andso on. For peasant farmers to reap the benefits of globalization and liberalizationthe State has to undertake special measures in favour of peasant agriculture toovercome the above-mentioned obstacles. However, the opposite has been thecase as the shift to neoliberal policies has swept away the few supportive andprotectionist measures that the State used to provide to some peasant farmers inthe period of import-substitution industrialization, such as credit, technicalassistance, and even land in those countries that implemented land reforms.19

A less common way of using the term ‘new rurality’ refers to the policyproposals designed by those analysts who want to overcome the negative con-sequences of neoliberalism for peasant farmers and thus aim at the implementationof alternative policies to neoliberalism as well as achieving other goals. Theagenda of the ‘new ruralists’ is to encourage a development process centredon peasant farming, sustainability, equity, social participation, decentralization,local development, empowerment (especially of women), rural employment(especially for the young), organic farming, better quality food, greater diversity,promotion of new niche markets and competitiveness, among other endeavours(Barkin 2001). While I fully sympathize with the aims of this view of newrurality, especially due to its focus on the peasantry and thus on the alleviation ofrural poverty, one of its drawbacks is that the proponents fail to specify howthey aim to achieve those various goals. The advocates of new rurality are notsufficiently explicit in stating the extent to which the State would need to getinvolved in achieving those aims. This may be because some of their proponentswish that most, if not all, the initiatives came from below. Or they may notwish to admit that the costs of such policy alternatives would be extremely highand difficult to bear for the State, who would thus be unable to implement them.Another flaw in their analysis is that some of the goals appear contradictorylike, for example, the achievement of competitiveness and environmentalsustainability. Thus these proposals for a new or alternative rurality would facemajor economic and political obstacles.

Rural Livelihoods: Emerging New Paradigm?

In the early 1990s the rural livelihoods approach emerged as a way to overcomesome of the shortcomings of prevalent theories of rural development which were

19 Max Spoor (2001, 2002) has shown that the performance of agriculture has been better under ISIthan after liberalization. The price discrimination against agriculture during ISI was compensated byfavourable supportive measures that largely favoured large farmers but also benefited some small-holders and which neoliberal thinkers have failed to take fully into account in their critique of ISI, seeKrueger et al. (1991) as well as Schiff and Valdés (1998).



considered either too economistic (as in the neoclassical view) or too deterministicand structuralist (as in the Marxist view). Some scholars concerned with povertyfelt that a new approach was required to gain a better understanding of therural poor. The rural livelihoods approach is to some extent interdisciplinaryand gives importance to the agency of actors, i.e. to the ability of peasants andrural labourers to construct their own livelihood strategies.20 It is an approachthat has become increasingly used in poverty analysis, especially by scholars inacademic institutions like the Institute of Development Studies (IDS) at SussexUniversity21 and the School of Development Studies (DEV) at the University ofEast Anglia, by NGOs like Oxfam and by governmental development agencieslike the Department for International Development (DfID) of the British Labourgovernment.22 It views poverty as being multidimensional and argues thatpoverty is not simply a deficit but can also be a resource. Thus the rural poor arenot seen as passive and powerless victims of the capitalist system and the processof globalization, but as subjects who construct their own livelihood strategies bydrawing on a variety of resources. Among these resources is ‘social capital’which, particularly in moments of extreme crisis, helps the rural poor to surviveby relying on the solidarity of their social networks and community organiza-tions (Nederveen Pieterse 2001, 100–1, 123–6).

However, the exponents of the rural livelihoods approach, while stressing theresourcefulness of the poor, are aware of social capital’s limitations and give dueimportance to the other forms of capital, pointing to the poor’s lack of assets andlimited access to natural resources. In this sense it overcomes some of the limita-tions of analysts who rely almost exclusively on the notion of social capital andoveremphasize its importance as a resource that the poor are able to mobilize fortheir livelihoods strategy. Furthermore, the rich have far more access to social aswell as ‘political capital’ than the poor and thus the problem of inequality, letalone poverty, persists.

Despite its advantages, a major limitation of the rural livelihoods approach isits lack of the power dimension. It gives insufficient attention to political powerand particularly to class relations (O’Laughlin 2004). The analysis of povertyhas to be embedded in power relations as it is these that continually reproducepoverty and are the major obstacles to overcoming it. Another weakness of therural livelihoods schema is that it tends to be atemporal by failing to givesufficient attention to historical processes. For example, it fails to capture struc-tural changes as well as households dynamics in which, for example, house-hold members migrate nationally and even internationally, often not returning.

20 For a good exposition of the rural livelihoods approach, see Bebbington (1999) and Ellis (2000).For an application of this approach to the Latin American context, see Zoomers (2001) and Bebbington(2004b).21 One of the pioneers of the livelihoods approach, as well as of participatory action research, isRobert Chambers, who is based at IDS (see Chambers 1988; Chambers and Conway 1992).22 See DfID’s website (http://www.livelihood.org); for Latin America see the useful website ofthe Grupo Chorlaví (http://www.chorlavi.cl) which has much material on rural poverty andlivelihoods.

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To overcome this weakness, de Haan and Zoomers develop the concept oflivelihood pathway which they define as

a pattern of livelihood activities which emerges from a co-ordination pro-cess among actors, arising from individual strategic behaviour embeddedboth in a historical repertoire and in social differentiation, including powerrelations and institutional processes, both of which play a role in sub-sequent decision-making. (2005, 45)

Furthermore, the rural livelihoods approach tends to be framed within thenational context and gives insufficient attention to the international dimension ofpoverty.23 With the process of liberalization and further integration of the devel-oping countries into the global capitalist system, this international dimensionbecomes an increasingly important determinant of the limitations and opportuni-ties for poverty alleviation measures. Despite its shortcomings the livelihoodsapproach is a major step forward in the analysis of rural poverty.

New Dimensions in Poverty Studies: Ethnicity and Gender

In the past poverty studies hardly incorporated into their analysis the ethnic andgender dimension. This was a major failing as poverty and vulnerability areparticularly prevalent among ethnic groups and women in the rural areas. How-ever, in the last decades this major weakness in poverty studies is being rectifiedas scholars, activists and policy makers have increasingly turned their attentionsto these dimensions of poverty. The increasing mobilization of indigenous groupsand women in pursuits of their rights and livelihoods has certainly been a majorfactor in this development.

Ethnicity and poverty

In most Latin American countries poverty has an ethnic dimension. This has itsorigins in the colonial period with the oppression, dispossession and exploitationof the indigenous population by the Spanish and Portuguese colonizers. Afterindependence, the indigenous peoples continued to be discriminated against andsegregated to the extent that the concept of ‘internal colonialism’ was coined tohighlight this fact.24 Over the last couple of decades indigenous peoples havebecome increasingly organized and through massive social mobilizations havebeen able to gain some social and political rights, albeit not yet full citizenship(Assies et al. 2000, 2005). Despite these gains, as put starkly by Figueroa: ‘pov-erty . . . has a skin colour, language, place of origin and place of residence’ (2003, 4).

Nevertheless, it is perhaps too readily assumed that the majority of therural poor are living in indigenous communities in the countryside. This is

23 The need to move away from ‘methodological nationalism’ in development and poverty analysesis well made by Gore (2000, 2004).24 For a discussion of the concept of internal colonialism, see Kay (1989, 58–87).



particularly the case in countries with a large indigenous population like Bolivia,Ecuador, Guatemala and Mexico. However, it is wrong to assume that all indig-enous peoples are poor and that all non-indigenous people are not poor. Somerural poverty alleviation programmes have failed to reach a significant segmentof the rural poor due to this misconception (Bretón Solo de Zaldívar 2002).Many non-indigenous rural poor work as wage labourers in agricultural andnon-agricultural activities under very insecure circumstances and often live inprecarious conditions in scattered hamlets in the countryside. Because they arenot indigenous in appearance or do not live in indigenous communities, theirpoverty is often invisible and they are thus excluded from poverty alleviationprogrammes. This can also be a deliberate policy choice in cases where greaterpopularity is derived from dealing with indigenous peoples or where there isgreater pressure from indigenous organizations. In recent decades the indigenousmovement has become more active and visible, gaining the attention of, inparticular, foreign-funded NGOs, but in some instances also of governmentprogrammes.

Even if resources are channelled to indigenous communities as part of anti-poverty and/or rural development programmes, this does not necessarily meanthat all the poor or only the poor in that community benefit from them. It hasbeen observed that socio-economic differentiation exists within many communitiesand that often the leadership and richer groups are the main beneficiaries of theseprogrammes (Bretón Solo de Zaldívar 2002). However, this should not implythat resources should not be directed to those communities. Rather, it suggeststhat one should be aware of their limitations and that better targeting might berequired.

Gender and poverty

Poverty also has a female face due to the patriarchal character of Latin Americansocieties and the discrimination against women at various levels such as in thehousehold and in the wider economy in terms of the labour, land and capitalmarkets. The most vulnerable groups in rural society tend to be single andfemale-headed households. A disproportionate part of them can be found withinthe indigent and the poor (ECLAC 2004, 133–69). However, many women inmale-headed households also experience a higher incidence of poverty than othermembers inside the household, so-called secondary poverty, due to gendereddomestic power relations (Chant 1999; Bradshaw and Linneker 2003).

Many rural development projects, including those of the International Fundfor Agricultural Development (IFAD), went through three phases regarding theirposition on women and gender (Ranaboldo and Canedo 1999). In the first phasethe development projects gave priority to technical and productive aspects andthe family household was seen as a unit of analysis without making any furtherdistinctions within it. The technical assistance and other productive elements ofthe project were directed at men, who were assumed to be the head of householdand the main, if not only, agriculturalist. Women’s work was seen largely to be

468 Cristóbal Kay


associated with child rearing and with ‘complementary’ activities such as minorhorticulture, handicrafts, food processing, and so on. In the second phase someprojects contained a specific component for rural women which sought toenhance women’s economic activities. In the third phase, the focus is not justwomen but gender, as the projects seek to change the unequal relationshipsbetween men and women. Thus the gender dimension is incorporated in allprojects, to a greater or lesser extent, by seeking to empower women.

However, rural women are distinguished by class and ethnicity and this has tobe taken into account in any analysis and development projects. Moreover, theextent to which the patriarchal structures of domination in society can be changedsignificantly through rural development projects by NGOs and agencies ofinternational cooperation like IFAD is questionable. Nevertheless, Ranaboldoand Canedo (1999, 174) consider that IFAD has done some pioneering work inBolivia as far as incorporating the gender dimension in rural development projects.

Many Latin American governments have in the last few decades implementedprogrammes of land registration and titling as many smallholders had no propertitles, if any, on the land they were farming and living. It was expected that thiswould lead to greater security, investment and hence income for the household.Arising from the pressure of the women’s movement and international organiza-tions, many governments also introduced legislation which enables joint regis-tration of property and land titles, i.e. the certificates are issued in the name ofhusband and wife, instead of just in the name of the husband as in the past. It isexpected that this will improve the bargaining position of women within thehousehold as well as the welfare of women and children. While some progresshas been made in increasing joint or single ownership of land of women, muchmore needs to be done to improve women’s access to land and other resources.25

The SAPs implemented by most Latin American countries and much sup-ported by the international financial institutions were designed as the main recipefor tackling the debt crisis of the 1980s and to achieve macroeconomic stability.But this generally had a devastating effect on the peasantry and greatly increasedrural poverty. To deal with the crisis rural households further diversified theireconomic activities, driving many of their members to migrate, even abroad, insearch of employment and incomes. This further intensified women’s work.Also the shift to non-traditional agricultural exports has increased the possibilitiesfor temporary employment, especially for women. Thus today’s participation ofrural women in the labour market is far higher than in the past, but to whatextent this has improved the position of women within the household and theirwell-being remains to be investigated further as evidence is mixed (Barrientoset al. 1999; Razavi 2002; Deere 2005; Lara 1995).

Certainly more needs to be said on gender relations and poverty in the country-side, but for the moment I would simply stress that women’s poverty has to be

25 For the most comprehensive study on women and land rights in Latin America, which hasbecome a classic on the topic, see Deere and León (2001). See also Deere (2001) and, more generally,Razavi (2003).



analysed within the context of the economic, social, political and ideologicalrelations at household, local, national and global levels.

THE PEASANTRY’S PLIGHT AND ITS DEVELOPMENTPOSSIBILITIES26

Survival of the Peasantry: Pauperization or Capitalization?

While the discussion on marginality and the informal sector largely focused onthe urban sector it has relevant implications for the analysis of the rural sectorand the dynamics of poverty. Like the marginal pole of the economy or theurban informal sector, most of the peasantry in Latin America were small-scaleproducers relying on family household labour for their production of agricul-tural commodities. The peasantry had access to land through a variety of meanssuch as ownership, membership of a peasant community, tenancy, and otherforms of rentals. As with the urban informal sector the peasant economy wasgenerally linked to larger and more market-oriented enterprises, first with thelandlord economy when the latifundia or traditional large landed property pre-dominated and later with capitalist agricultural enterprises and agribusiness. Suchlinks could be the provision of peasant labour to the landlord enterprise inexchange for money or the lease of a piece of land, sharecropping agreements,credit and marketing relations, and so on. The peasant’s prosperity or povertywas often closely related to the fortunes of these larger farm enterprises. In theanalysis of rural poverty it is crucial to explore the complex relationships of thepeasantry with the landlord and capitalist farm sector. To understand the causesand dynamics of poverty in the rural sector it is of utmost importance, perhapseven more so than for the urban sector, to analyse it within the context of thevaried and multiple articulations which developed over the centuries between thedifferent types of peasants and the remainder of the rural economy and increas-ingly with the urban economy as well.

It is necessary to distinguish between at least two types of peasant economy.On the one hand, there exist those peasant farms that have direct access toland through a variety of ownership forms such as private, communal or co-operative, or through some established occupancy right. On the other hand,there are those peasant farms that have only indirect access to land largely throughsome sort of tenancy arrangement, such as sharecropping, with landlords.The indirect peasant access to land (which I labelled as the ‘internal peasanteconomy’) used to be in many Latin American countries as important in termsof land cultivated, employment and farm output as the direct form of peasantaccess to land (which I labelled as the ‘external peasant economy’).27 With themechanization and modernization of the latifundia or hacienda system, largely

26 Many of the ideas in this section were first presented in Kay (1995).27 For a fuller explanation of the concepts of ‘internal peasant economy’ and ‘external peasanteconomy’, see Kay (1974).

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from the 1950s onwards, the internal peasantries have lost much of their signifi-cance unless they were able to benefit from a land reform. But the fate ofthe external peasantries, largely minifundistas or owners of only a small piece ofland insufficient for the subsistence of the family household, has not beenmuch better.

In a similar vein to Nun’s analysis of marginality, the modernization ofthe latifundia resulted in a drastic reduction of the labour force employed bythe landlords, especially of tenant labour, which became surplus to require-ments. Many of the tenants expelled by the landlords found it difficult tocontinue to make a living in the countryside and a large proportion thereforemigrated to urban areas. Most tenants were already living in poverty and theirloss of access to land made their survival even more precarious and their livingstandards might have further deteriorated. However, with the implementationof agrarian reforms in the second half of the last century, in many Latin Americancountries tenants and in some cases also members of peasant communities wereable to get access to the land they were cultivating or to some new or additionalland. But agrarian reforms were unable to satisfy the great demand for land andmany peasants continued to be landless or to have insufficient land to make aliving. Furthermore, in some cases land reform beneficiaries again lost their landdue to counter-reforms or, more commonly, due to the liberalization of landmarkets.

The internationalization of Latin America’s agriculture, the demise of thehacienda system and the increasing dominance of capitalist farming, are havinga profound impact on the peasantry’s welfare. How are these major trans-formations affecting the development of the peasant economy, especially in thewake of the increasingly widespread neoliberal policies pursued by most govern-ments throughout Latin America? Can the peasant economy provide adequateproductive employment and rising incomes? Will peasant producers be able toincrease productivity, thereby stemming the erosion of their past role as amajor supplier of cheap food, or will they become a mere supplier of cheaplabour to the capitalist entrepreneurial farm sector? Will they become fullyproletarianized? These questions will be examined by making reference to theLatin American debate on the peasantry and the contemporary significance ofthe peasant economy.

The fate of Latin America’s peasantry has been the subject of much debate. Inthe late 1970s the dominant view that the landlord road to capitalism wassteamrolling ahead was challenged by those who emphasized the resilience, vitalityand relative importance of the peasant economy. The ensuing debate betweenthe ‘campesinistas’ (‘peasantists’) who upheld the endurance of peasant farmingand the ‘descampesinistas’ or ‘proletaristas’ (‘depeasantists’ or ‘proletarianists’) raisedfundamental questions about the future viability of peasant farming. The‘campesinistas’ reject the view that the peasantry is being transformed into wagelabourers and that it is disappearing. They argue that the peasantry, far frombeing eliminated, is persisting and even being reinforced. They view the peasantas a small-scale commodity producer who is able to compete successfully with



capitalist farmers.28 In contrast, the ‘descampesinistas’ or ‘proletaristas’ argue thatthe peasant form of production is economically unviable in the long rundue to economies of scale, technological developments, and so on. Capitalistdevelopment enhances the process of socio-economic differentiation amongthe peasantry, transforming ultimately the majority into proletarians or wagelabourers as only a few might become ‘peasant capitalists’.29

The peasant economy will undoubtedly survive for some time to comein Latin America.30 But the key question concerns the terms of the peasants’survival: prosperity or destitution? Can the peasant economy provide adequateproductive employment and rising incomes to overcome poverty? Will peasantfarmers be able to capitalize their enterprise and raise productivity, therebyenhancing their competitiveness, or will they become mere suppliers of cheaplabour to the capitalist farm sector and thereby become semi-proletarians whoseland is too small to generate sufficient income and thus have to seek wageemployment as well to survive? Or will they become fully proletarianized byhaving to give up farming altogether, relying exclusively on the sale of theirlabour power to make an income? To comprehend the dynamics of peasantagriculture is also a way to gain an understanding of the dynamics of ruralpoverty.

While the peasantry is far from disappearing, it is hardly thriving astheir relative importance as agricultural producers continues to decline. LatinAmerican peasants are experiencing a ‘double (under-)developmental squeeze’.First, they face a land squeeze. By failing to acquire additional land to matchtheir increased numbers, the average size of peasant farms has decreased. Second,peasants face an employment squeeze as employment opportunities have notkept pace with the growth of the peasant population and they face increasedcompetition from urban-based workers for rural employment.31 This doublesqueeze on the peasant economy has led many peasants to migrate. This migra-tion can vary from some months to a few years, and even become permanent.Increasingly migration has become transnational. It is often not the poorestpeasants who migrate, as some capital is required to finance this process and asthey are disadvantaged in the labour market due to their lack of skills. Butremittances from abroad have become increasingly important for the nationaleconomy as in some Central American countries where they have begun toexceed the value of agricultural exports. But further research is required on theremittances of migrants to establish their significance for the livelihood strategyof peasant household. Are remittances used for consumption or for savings andinvestment on the farm? Should governments encourage or regulate migrations?

28 A key representative of the campesinista view is Gustavo Esteva (1978).29 A key proponent of the descampesinista view is Roger Bartra (1975).30 It is estimated that until the 1970s Latin America’s peasant agriculture comprised four-fifths offarm units and controlled over a third of the cultivated land, accounted for almost two-thirds of thetotal agricultural labour force, and supplied two-fifths of production for the domestic market and athird of the production for export (see López Cordovez 1982, 26).31 The ‘double squeeze’ is fully analysed by de Janvry et al. (1989a), and who also coined the term.

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How suitable are migrations and remittances as a policy for rural developmentand poverty alleviation? What is the social and political impact of the migrantson their peasant communities?32

In general, peasants have also responded to their survival crisis by seekingalternative off-farm and non-farm sources of income. An increasing proportionof total peasant household income originates from wages, and income from theirown-farm activities often accounts for under half the total (de Janvry et al.1989b, 141). This process of de-agrarianization33 and semi-proletarianization isthe main tendency unfolding among the Latin American peasantry. Thus, LatinAmerica’s peasantry appears to be trapped in a permanent process of semi-proletarianization and structural poverty. Their access to off-farm sources ofincome, generally seasonal wage labour, enables them to cling to the land, therebyblocking their full proletarianization. This process favours rural capitalists as iteliminates small peasants as competitors in agricultural production and trans-forms them into cheap labour which capitalists can employ. Semi-proletarianizationis the only option open to those peasants who wish to retain access to land forreasons of security and survival or because they cannot find sufficiently secureemployment as wage workers, either in the rural or urban sector, to risk perma-nent out-migration. For many Marxist thinkers, the problem of rural povertycannot be solved by capitalism ‘because ultimately the accumulation processdepends precisely on the presence of large numbers of the rural poor, who intheir capacity as an industrial reserve army of labour undermine the bargainingpower of employed workers, thereby keeping wages down and profits up’.34

Nevertheless, some developing capitalist countries have managed to reduce drasti-cally rural poverty, as in the case of Chile, although poverty still remains a problem.

Rural Non-Farm Employment and Incomes

Rural non-farm employment (RNFE), or rural non-agricultural employment(RNAE), refers to employment by rural household members in the non-farmor non-agricultural sector, i.e. in manufactures (such as rural industry andagroindustrial processing plants) and services (such as rural tourism and com-merce). Some analysts see the promotion of RNFE and hence rural non-farmincomes (RNFI) as a solution to the problem of rural poverty. It is relativelyrecently that the increasing significance of RNFE in rural livelihoods has becomeevident. While in 1970 in Latin America 17 per cent of the rural population hadtheir principal occupation in non-farm activities, this rose to 24 per cent in 1981and has continued to rise since then (Klein 1992). This shows that secondary andtertiary activities in the rural sector have been more dynamic than primaryactivities, at least in terms of employment. Many of these secondary and tertiary

32 Some of these issues are discussed in Goldring (2004).33 De-agrarianization is the process by which the significance of agricultural activities decreases inthe peasants’ livelihood strategy. For a fuller discussion of the concept, see Bryceson (2000).34 Tom Brass, personal communication via e-mail dated 18 August 2005.



activities are derived from agriculture such as food processing, packaging,and marketing of agricultural produce. Thus dynamic agriculture is likely tolead also to a dynamic rural non-farm sector. This shift to RNFE and RNFI haseven accelerated further in recent decades. While in the early 1980s rural non-agricultural income (RNAI) accounted for 25–30 per cent of total rural income,by the second half of the 1990s this proportion rose to above 40 per cent (Berdeguéet al. 2000, 2). A far higher proportion of rural women are engaged in non-farmjobs than men. While in most countries this share varied between 20 per cent and55 per cent for employed men, in the case of employed women it varied between65 per cent and 90 per cent (Reardon et al. 2001, 400).

However, non-farm employment has a different meaning for rural house-holds according to their income level. For poor peasant households RNFE is akey mechanism to retain access to their small plot of land and to maintain asubsistence income. Meanwhile, for rich peasant households it is a way to accu-mulate more capital. This capital can be used for expanding the farm enterpriseby buying more land or to increase its productivity by investing in machinery,fertilizers, upgrading their labour and management skills through further educa-tion and so on. Poor peasants depend to a greater degree on non-agriculturalincome than rich peasants, but in absolute terms this amount is much lower inthe poor households than in the rich households (Berdegué et al. 2000, 3). Therise of RNFE and RNFI is certainly a welcome development and is a means ofimproving employment opportunities and incomes in the countryside, but itcertainly is not the panacea for conquering rural poverty.

Non-Traditional Agricultural Exports (NTAXs)

A key factor for the future development of peasant farmers, as well as the allevia-tion of rural poverty, is to enhance their market competitiveness. Governmentsand NGOs concerned with promoting the development of peasant farmersproposed a series of measures for facilitating their participation in the lucra-tive agricultural export boom. It was almost exclusively capitalist farmers whoinitially reaped the benefits of the thriving ‘non-traditional agricultural export’business as they had the resources to respond relatively quickly to the newoutward-looking development strategy of the neoliberal trade and macroeconomicpolicy reforms. In view of the dynamism of the NTAX sector it was thoughtthat a shift in the production pattern of peasant farmers to these products wouldspread the benefits of NTAX growth more widely and ensure their survival.However, experience has been rather mixed, as shown by a study of the impactof NTAX growth on the rural poor in Paraguay, based on soybeans and wheat,Chile, based on fruit, and Guatemala, based on vegetables.

To analyse the impact of NTAX growth on smallholders and rural labourersit is argued that this depends on three factors:

first, whether small-scale units participate directly in producing the exportcrop and enjoy the higher incomes generated from it (which we call the

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‘small-farm adoption effect’); second, whether the export crop induces apattern of structural change that systematically improves or worsens theaccess of the rural poor to land (the ‘land access effect’); and third, whetheragricultural exports absorb more or less of the labour of landless and part-timefarming households (the ‘labour-absorption effect’). (Carter et al. 1996, 37–8)

Only in the case of Guatemala was there a broadly based growth due to positiveland access and employment effects, while the opposite happened in Paraguay,resulting in exclusionary growth. The Chilean case had elements of both, theemployment effect being positive whilst the land access effect was negative as theshift to NTAX worsened the access of peasants to land. Thus in Chile the fruit-export boom has been partly exclusionary, as many peasant farmers have soldpart or all of their land as they were squeezed by the export boom and partlyinclusive, as the shift from traditional crops to fruit-growing increased labourdemand (Murray 1997; Schurman 2001).

So far only a minority of peasant farmers have shifted into NTAXs due tofinancial, technological, marketing and other types of restrictions. Even if alarger proportion of peasant farmers were to go for NTAXs, it is far fromcertain that this would ensure their survival or that it would significantly reducerural poverty, as there are too many risks involved. Thus the much fanciedNTAX rural development policy of many Latin American governments cannotbe considered as a panacea, especially if no complementary measures are taken tocreate ‘level playing fields’. The Chilean experience is illustrative in this regard.First, there has been a low adoption rate of NTAXs by small-scale farmers forreasons already mentioned. Second, many of those who did switch to NTAXsfailed as they were unable to withstand competitive pressures due to their dis-advantaged position in marketing, credit, technology and other markets. As aconsequence of rising debts many are forced to sell their land, often to largerfarmers or transnational fruit companies (Murray 2002). Such an ongoing pro-cess of land concentration is also happening in other Latin American areas inwhich NTAXs are taking hold.

Food Import Substitution, Food Security and Sustainable Development

An almost forgotten alternative or additional possibility to NTAXs for revitaliz-ing peasant farming and alleviating rural poverty is to enhance the peasantry’scomparative advantage in staple food production and in some import-competingcommodities. This can be achieved through a programme of ‘food importsubstitution’ (de Janvry 1994). More radical proposals call for the redevelopmentof the peasant economy through an ‘autonomous development’ strategy thatis seen as the key for sustainable development in rural areas (Barkin 2002). Foran autonomous development strategy to succeed, major state supportive policiesare required, such as specifically targeted protectionist measures to counteractthe distortions in the world food market arising from subsidies to farmers indeveloped countries.



Import-substitution in staple foods and autonomous development aimedat peasant farmers have the advantage of not only saving valuable foreignexchange but of enhancing food security and employment, and bringing a moreequitable income distribution as well as reducing rural poverty (Teubal andRodríguez 2002). The expansion of the peasant farmers’ food output has alsothe advantage of being more ecologically friendly as peasant farmers use lesschemical inputs as compared to capitalist farmers and also relative to NTAXs.Instead of viewing NTAXs and food production as being in conflict or asalternatives, they can be seen as complementary. It is possible to envisage apositive correlation as those peasants who are able to go into lucrative agro-export production can use their increased incomes, knowledge and marketexperience derived from NTAXs to invest in raising the productivity of theirtraditional food crops (Schejtman 1994). Similarly, the search by peasant farmhouseholds for incomes derived from non-agricultural activities can, undercertain circumstances, enhance the productive capacity of the farm’s agricul-tural activities. However, if such a search for additional incomes arises out ofdistress (where the peasant household is fighting for its survival), it is unlikelythat such a positive interaction between farm and non-farm activities can beachieved.

Agrarian Reform: Necessary but not Sufficient

The limited access to land by the majority of Latin America’s campesinos is one ofthe main reasons for the persistence of rural poverty. While land reform is anecessary condition for achieving broad-based rural development, which reducespoverty and enhances equity, it is not a sufficient condition. This is one of thekey lessons that can be derived from the various experiences of land reform inLatin America during the second half of last century.35 For an agrarian reform toreduce poverty and enhance equity it is necessary for the State to design a seriesof supportive measures for the beneficiaries (Barraclough 2001). Among theseis the provision of technical assistance, credit and marketing facilities so as toencourage land reform beneficiaries to increase productivity and shift to moreprofitable agricultural and rural activities. A supportive macroeconomic policyframework is also required to ensure a reduction in rural poverty: including,for example, a non-discriminatory agricultural price policy, a judicious foreignexchange and trade policy which protects peasants from unfair foreign competi-tion resulting from the massive subsidies received by farmers in many developedcountries, and so on. In those countries where a significant proportion of peasanthouseholds derive an important part of their income from wages earned by somefamily members it is necessary to ensure that appropriate policy measures andlegislation protect workers from abusive employers, such as paying too lowwages and failing to make social security contributions.

35 For overviews of the legacy of agrarian reforms in Latin America, see Barraclough (1994),Thiesenhusen (1995), Kay (1998), Baumeister (2001) and Alegrett (2003), among others.

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Furthermore, the process of agricultural modernization makes increasingdemands on capital, labour and knowledge. More investments in new technology,infrastructure, and so on, as well as on human resources, so as to improve theskills and technical expertise of rural people, are required. Also the maintenanceor improvement of land fertility demands more investments. Thus, while theaccess to land is a necessary first step for poverty reduction, access to capitalbecomes increasingly more important for ensuring the competitiveness of thepeasant enterprise (be it individual, cooperative or collective) and its ability togenerate adequate incomes for its members. Thus it is crucial that the Stateguarantees that peasants are able to get adequate access to capital, by eitherproviding it directly or ensuring that the private capital market does not dis-criminate against peasant farmers and is able to supply reasonable finance tothem, or through a mixture of public–private sources. Similarly, the State has aduty to provide universal access to good quality education to all rural inhabitantsat primary and secondary level as well as to technical education on agriculture,forestry, natural resource management, and so on.

While during the 1960s and 1970s most Latin American countries implementeda variety of land reforms, they disappeared from the policy agenda in the 1980s andearly 1990s for political reasons and their inability to meet the (perhaps unrealistic)expectations they had created. One of the key reasons for their limited resultswas the failure of governments to provide adequate supportive measures, as alreadymentioned. In the late 1990s concerned scholars and policy makers have put theland issue again on the policy agenda influenced by the increasing public concernabout poverty and also by the renewed mobilization of landless peasants and indi-genous people for land and other rights. Even the World Bank has recognizedthe importance of access to land assets for reducing poverty among the ruralpopulation and has thus proposed ‘market-assisted’ or ‘negotiated’ land reformpolicies as well as a series of other land policy measures such as land registrationand land titling (Deininger 2001, 2003; Deininger et al. 2003). However, so farthe experience of market-assisted land reforms has been rather limited, if notdisappointing (El-Ghonemy 2001; Borras Jr 2003a, 2003b; Baranyi et al. 2004).

In today’s era of neoliberal globalization, the political climate for radicalland reforms is more unfavourable than in the past due to the more limitedrole and power of the State and the greater reach and power of market forcesas well as of those who control most of the capital, particularly financial cap-ital. Veltmeyer (2005, 292) does not do me justice when he writes that I echoLehmann’s (1978) view of the ‘death of land reform’ in Kay (2000). I certainlythink that Lehmann was grossly premature in his judgement, although it isa pioneering article, as some important land reforms were implemented soonafter he published his article, as in Nicaragua after the Sandinista revolution.However, the situation does change subsequently with neoliberal globaliza-tion which has often resulted in counter-reforms. Thus my doubts were largelydirected at collectivist and statist agrarian reforms of the kind that had beenimplemented in the past leading to the formation of a reformed sector in whichproducer cooperatives and state farms predominated (Kay 1999).



Meanwhile, Leite (2006, 21) argues that I seem to have regained hope insome of my recent writings (Borras et al. 2005). Undoubtedly the resurgenceof rural movements, which I already referred to in Kay (2000), does raise hopesfor more radical land reforms.36 The peasant movements in Brazil, largely spear-headed by the Movimento (dos Trabalhadores Rurais) Sem Terra (MST) with itscampaign of land occupations, have been able to achieve significant expropriationsof land, mainly from large landed estates (Branford and Rocha 2002). Further-more, the MST has been encouraging the formation of collective farms. But ithas only partially succeeded in its aim as many beneficiaries tend to prefer,especially after a transition period, the establishment of family farms. Neverthe-less, the organization of service cooperatives among land reform beneficiaries iscommon (Wright and Wolford 2003). But the land reform in Brazil has as yetnot reached the scale of earlier land reforms as in the cases of Mexico, Bolivia,Cuba, Chile, Peru and Nicaragua. And it certainly has not been able to eradicatelandlessness and poverty. The MST has become increasingly frustrated at thelack of progress of the agrarian reform, in relation to their expectations,demands and promises made by the government of President Luiz Inácio ‘Lula’da Silva, who was elected on a centre-left reformist platform (Petras 2005).

In today’s neoliberal context, more market-friendly ways of facilitating accessto land for the landless and poor peasants are being proposed, such as thosepromoted by the World Bank. Besides the market-assisted land reform alreadymentioned, an array of other policy interventions are specified by the Wold Bankand other international organizations as well as by some development agencies.These include creating the conditions for a more transparent and accessible landsales market and land rental market through programmes of land registrationand titling as well as by other complementary measures. The proposed policies,it is suggested, would create a more ‘level playing field’, reduce transactioncosts, avoid overpricing and facilitate access to land either via rentals or landpurchase to a wider segment of the rural poor as well as encourage investment,higher productivity and incomes, thereby reducing poverty.37

However, the above proposals would require a series of institutional innova-tions, which are not always specified or have little chance of being implemented,such as a more accessible and competent judiciary for conflict resolution and forensuring compliance with contracts (Ghimire 2001). Indeed, all these alternativepossibilities for widening access to land should be explored. Furthermore, securingproperty rights to smallholders and indigenous groups through land titlingprogrammes can under the right circumstances reduce vulnerability and enhancewell-being (Carter 2003; Cotula et al. 2006; Hopkins et al. 2006). But, due to the

36 The resurgence of the indigenous and peasant movements are well discussed by Petras (1997),Veltmeyer (1997), Petras and Veltmeyer (2001, 2003) and Moyo and Yeros (2005). However, arelative decline in these movements can be observed in recent years.37 One of the most authoritative books which thoroughly explores the various possibilities ofaccessing land and their merits is by de Janvry et al. (2001). For insightful reviews of this book, seeHopkins (2002) and Akram-Lodhi (2002). For a neo-structuralist perspective on land markets, seeCarter (2006).

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market context of these policies, it is absolutely necessary for the State to imple-ment a variety of institutional innovations which protect the acquired rights ofpeasants and indigenous communities as well as providing the resources andeconomic incentives to ensure that such a process of widening access to landacquires sufficient momentum to become feasible, sustainable and irreversible.Nevertheless, as put cogently by the doyen of land reform theory and practice,the late Solon Barraclough:

In the contexts of most developing countries, such reforms of property rightsare extremely difficult. In localities where they are most needed, local powerstructures reflect the vested interests of propertied elites and not those oflow-income majorities. National legislation and the State are theoreticallythe ultimate arbitrators of disputes over property. The State, however,depends on support from well-organized foreign and domestic propertiedinterest groups. Its autonomy is always constrained, even when undertakingpopularly based strategies with widespread public support. (2005, 54)

Thus it is necessary to go beyond the neoliberals’ exclusive emphasis on marketsand design ‘civil society-friendly’, ‘community-friendly’ or ‘public-friendly’ poli-cies by enhancing the linkages between, and the active engagement of, civilsociety, development agencies and the State (Borras Jr 2006; Merlet et al. 2006).

Nonetheless, even if such ‘civil society-friendly’ land policy measures to fac-ilitate a more pro-poor outcome of the ‘market-friendly’ could be implemented,these, in my view, would still be far from being sufficient for providing accessto land for the majority of the landless and land-poor peasant. Thus I wouldpersevere in my proposal for a more assertive and widespread land reform. Inmy view, international agencies and NGOs should assist the various organizationsof the peasantry and rural workers in promoting a favourable social and politicalclimate for these more wide-ranging and radical land redistributive measures.Furthermore, the rural social movements need to combine forces with urbansocial movements if they are to succeed in their demands for land. I certainlyshare Barraclough’s sentiment that ‘redistributive land reforms can still play acrucial role in relieving rural poverty and in promoting broad-based sustainabledevelopment’ (1999, iii). Let us hope that such sentiments become reality.

The Debate on Redistributive Land Reform Today

Readers of this journal will be aware that in previous issues a major debateon redistributive land reform was published which has a direct bearing on manyof the issues explored in this article.38 It is a high-level debate which raises

38 The debate started with an article by Keith Griffin, Azizur Rahman Khan and Amy Ickowitz (seeGriffin et al. 2002). In a special double issue of the Journal of Agrarian Change (JAC) edited by TerenceJ. Byres (2004a) the essay by Griffin, Khan and Ickowith (GKI) is thoroughly discussed in ninearticles. Griffin et al.’s (2004) reply is published in the following issue. It is a well-argued debate inwhich the authors are very outspoken in their views, especially concerning their disagreements,which at times are quite fierce but which sharpen the arguments and help to clarify the issues.



important questions and which would require a separate paper to be exploredproperly. In this essay I will pick up only a few issues, although more arerelevant for this analysis. In their article, Griffin, Khan and Ickowitz (GKI)(2002) strongly argue in favour of a redistributive land reform as this would leadto greater efficiency, reduce poverty and improve equity. They are of the firmpersuasion that family farming is superior to large capitalist farming, as they areconvinced that an inverse relationship exists between land productivity and sizeof holding. They also critique the ‘market friendly’ land reform and persuasivelyargue that a high degree of land confiscation is required for a successful landreform, as otherwise the economic resources will not be available for major landdistribution and for supporting the family farms of the land reform beneficiaries.Most participants in the debate seem to agree with GKI’s critique of the marketfriendly land reform, as I do, but there is strong disagreement on the inverserelationship thesis and hence on an agrarian reform which reproduces small-scalefarming. This critique of a redistributive land reform is particularly developedby Byres (2004b, 2004c), who characterizes GKI’s position as ‘neoclassicalneopopulism’.39 While I am in agreement with Byres that the inverse relationshiphas to be analysed in a dynamic and historical context, I do not always reach thesame conclusions. I will use the cases of Chile and Nicaragua to illustrate mypoints, which involve political economy and class analysis. Thus one of myarguments is that the inverse relationship cannot be analysed just in economicterms. The debate on family and small-scale farming versus large capitalist orcollective and state farming has to take into account the social and politicalcontext which may not always lead to the desired economic policy in the shortterm as a transition period is required.

In my early articles (Kay 1974, 1977b), I argued that Chile’s agrarian systemhad advanced the most towards capitalism compared to other Latin Americancountries, with the exception of Argentina.40 Thus in my view an agrarianreform which favoured cooperatives, collectives and state farms was the rightpath to pursue from an economic as well as social and political point of view,especially during Allende’s socialist government of 1970–73 (Kay 1975). To havebroken up the estates into family farms would in this instance not have resultedin greater efficiency and capital accumulation. Furthermore, so long as thecollectives and state farms were able to secure higher living standards for itsmembers they would continue to support such a development process. Dueto the high degree of proletarianization of the estate’s labour force, the demandsfor subdividing the expropriated latifundia into family farms was low. One ofthe limitations of agrarian reforms, particularly of the redistributivist kind pro-posed by GKI, is that they fail to incorporate the rural proletariat and semi-proletarian smallholders (minifundistas), thereby furthering the process of peasant

39 Terence Byres has also written a more general and lucid critique of the ‘new neoclassical develop-ment economics’ as well as of ‘neoclassical neo-populism’ (see Byres 2006).40 The largely capitalist character of Argentina’s rural economy and society is largely the reason forit being the only country in Latin America where no agrarian reform has been attempted, let aloneimplemented.

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differentiation and failing to reach the poorest rural labourers. In the Chileancase the government actively encouraged the formation of trade unions andpeasant organizations so as to improve the bargaining power of wage workersand smallholders. During the Allende years also greater efforts were made, ascompared to the previous Christian Democrat government of President Frei Sr.,to incorporate rural wage workers who originally did not belong to the estate’spermanent labour force into the reformed sector. Thus Chile’s agrarian reformhad generally a positive effect on rural livelihoods.

With the military overthrow of the Allende government an agrarian counter-reform process transferred over the years about two-thirds of the collectiveand state farms’ land. Some of it was returned to its former owners, but much ofthe land was sold to a new class of capitalists, mostly of industrial, financialand commercial origin. Foreign capital, which historically had never been veryprominent in Chile’s agriculture, began to make significant investments, mainlyin forestry and agroindustry. The remaining one-third of the reformed sectorwas subdivided into family farms and sold to some of the former land reformbeneficiaries who became known as parceleros. Over the years around half ofthem sold their plot of land, known as parcela, largely due to indebtedness.In sum, the majority of former land reform beneficiaries became fullyproletarianized. Also unemployment and poverty greatly increased. Neverthe-less, the military’s neoliberal economic policy, after a couple of crisis periods ofrestructuring, led to the development of a dynamic export agriculture whichgained further strength with the transition to democracy after 1990. Chile’sagriculture and economy have probably become the most dynamic in LatinAmerica. But with the intensification of capitalist agriculture the technologicalgap between peasant agriculture and capitalist farming started to shift decidedlyin favour of capitalist farms and peasant farming became increasingly uncompeti-tive, forcing many to sell their land. Thus land concentration has significantlyincreased.41

The neoliberal policies in Chile removed many of the biased policies of thepast as well as further developing the factor and product markets as recom-mended by GKI, although many imperfections remain. Therefore I would arguethat the chief reason for the technological and efficiency gap in favour of capital-ist farmers is due to their greater capacity for innovation, accumulation andreaping the benefits of economies of scale. Due to agriculture’s export dyna-mism, but only after a long delay during which the surplus labour declined, ruralpoverty began to decline. However, it is likely that the economic and socialpolicies of the Concertación governments have a major responsibility for thisdecline.

41 The neoliberal transformation of Chilean agriculture I discuss at length in Kay (2002c). It isnotable that in Argentina land concentration has increased dramatically since the late 1960s andparticularly since the shift to neoliberal policies in the 1980s which removed many subsidies andprotectionist measures favourable to peasant farmers. Neoliberal policies have allowed capitalistfarmers to fully exploit the advantages of economies of scale and, of course, their market power infavour of their process of accumulation furthering the concentration of capital (Teubal et al. 2005).



The Nicaraguan case, in contrast to Chile, illustrates the problems of acollectivist and statist land reform which could have been avoided with theimplementation of a redistributivist land reform à la GKI. After the Sandinistarevolution in 1979, which overthrew the Somoza dictatorship, most estates wereexpropriated and transformed into production cooperatives and state farms whichcame under the control of the Ministry of Agriculture.42 This proved to be acostly mistake as it alienated many peasants from the revolution and drove someof them to support the counter-revolution (Horton 1998). Ultimately it resultedin the Sandinistas’ electoral defeat in 1990. The Sandinista government was latein recognizing its mistake and by the time it began to distribute land in indi-vidual ownership as from 1985 it was too late. How did this state of affairs comeabout? It was largely due to the wrong interpretation of the country’s agrariansystem, which the Sandinistas presumed was far more capitalist than it turnedout to be. Jaime Wheelock (1975) wrote an influential book which shapedNicaragua’s agrarian reform, especially as he became the Minister of Agriculture.His ideological reading of Nicaragua’s agrarian history led him to believe thatthe main demand of campesinos (peasants including agricultural workers) was forbetter wages and employment conditions and not for land. But reality showedotherwise. Although a third of the rural population did not own land by the timeof the revolution, most of them were not landless in the sense that they managedto gain access to land through tenancy and other sorts of agreements with land-lords and other landowners. Although this access to land was precarious, andmay not have allowed them a subsistence income thereby forcing many ofthem to engage in seasonal wage work, they largely retained an aspiration forland ownership.

In a similar vein to Byres’s critique of GKI’s ‘neoclassical neo-populism’,leading Sandinista officials argued that large-scale agriculture was the most effi-cient form of production and held that subdividing the large farms into peasantfarms would lower productivity, reduce output and endanger food supplies tothe cities. They were also concerned that if land was to be redistributed topeasants in individual ownership this would lead to a shift from export produc-tion to subsistence production, thereby reducing the available supply of foreignexchange necessary to promote industrialization. Furthermore,

Sandinista policymakers, some drawing on a classical socialist critique, arguedthat the formation of a class of independent farmers would lead inevitablyto social differentiation in the countryside and to the re-creation of a ruralbourgeoisie and agrarian capitalism. In addition, they maintained that ruralsmall producers were inherently reactionary, and . . . they were wary of alarge group of small farmers independent of the state. (Dore 2006, 175)

But the increasing reaction by the peasantry against the Sandinista agrarian policyled them to dramatically change course. Yielding to their social and political

42 There exists a rich literature on the Nicaraguan agrarian reform (see Deere et al. 1985; Kaimovitz1987; Enríquez 1991; Utting 1991; Baumeister 1998, among others).

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pressure, the government started to distribute land to individual peasant house-holds. The land controlled by state farms declined from 23 per cent of thecountry’s land in 1982 to 8 per cent in 1990, while small producers increasedtheir share from 16 per cent to 41 per cent during this period (Dore 2006, 173).

Thus, by misinterpreting the character of agrarian capitalism, and probablydriven also by ideological concerns, the Sandinistas established prematurely col-lective and state farms thereby losing the support of many peasants. This was notan inevitable outcome as it is likely that a redistributive land reform would havebeen less disruptive economically and politically. If the Sandinistas had been ableto continue in power they may have been able to encourage at a later stage theformation of cooperatives of various kinds as well as been able to retain somekey state farms where large-scale investments were involved, thereby takingadvantage of economies of scale in both cases. This would have contributed togreater efficiency, higher incomes and reduced poverty.

Let me turn now to another issue of debate related to the above. GKI alsoargue that both ‘landlord bias’ and ‘urban bias’ have to be removed for aredistributive land reform to succeed. Several of the contributors to the SpecialIssue of JAC disagree with aspects of their analysis on ‘urban bias’. Their analysisrefers to countries from all over the world but from my understanding ofthe Latin America experience I agree with their characterization of the region’seconomic policy as being historically biased in favour of landlords. Indeed,in a comment of Michael Lipton’s famous ‘urban bias’ thesis (Kay 1977a)43 andparticularly in my historical analysis of the Chilean case I already use the term‘landlord bias’ so as to reveal the class content of economic policy (Kay 1981).As for ‘urban bias’ I argue that, at least for Chile, there might have beensome during the import-substitution industrialization period (roughly 1930s to1970s) but that this has been grossly overestimated by neoclassical economists(2002b).

In any case, I find the category of ‘urban bias’ (which GKI continue to use)not very useful as it often hides more than it reveals. For example, although itsounds paradoxical, it is possible for an ‘urban bias’ policy to lead to higher ratesof agricultural growth and poverty reduction than a ‘rural biased’ policy, as isevidenced by the historical experience of Japan, South Korea and Taiwan(Karshenas 1995). Thus the term ‘urban bias’ needs to be unpacked to reveal thecomplex and multifaceted relations between the rural and urban sector as well asbetween agriculture, industry and services, as is done in the detailed and empiri-cally grounded intersectoral resource and commodity flows analysis of Karshenas(1996/97, 2004). Due to the ambiguity of the term ‘urban bias’ I prefer instead tospeak in terms of classes or social groups as the flow of intersectoral resourcesbenefit or harm particular groups and due to the existence of class alliances andcoalitions which cut across economic sectors. Thus conflicts are between classesrather than sectors (Mitra 1977).

43 My comments on Lipton’s ‘urban bias’ refer to one of the early formulations of his thesis (Lipton1974) which he fully developed in an ambitious and all-embracing book (see Lipton 1977).



As to the sequencing of the development process, GKI strongly argue for anagriculture first sequence, while Byres and Karshenas tend to be more concernedin getting industry moving as quickly as possible and agriculture is largely seenas providing the initial resources for this to happen through the transfer of amarketable surplus (Griffin et al. 2004, 365). I certainly argue, as mentionedapprovingly by GKI, that one of the major reasons why Latin America wasrapidly overtaken by Taiwan and South Korea in terms of growth, equity andpoverty reduction is due to the fact that Latin America started to industrializewell before implementing agrarian reforms, with the exception of Mexico (Kay2006). Furthermore, when they did introduce some land reforms they weregenerally less drastic than in Taiwan and South Korea. However, for me thedetermining factor is not the existence of either ‘urban bias’ or ‘rural bias’ but thecharacter of the rural–urban interaction. Furthermore, I am neither an agriculturefirst nor industry first proponent, especially in today’s neoliberal globalizationperiod in which the mobility of capital, commodities and services has greatlyincreased. In my view the interrelationships between the various economic sec-tors, the particular linkages with the world economy and efficiency of resourcesuse are the determining factors. For example, even if agriculture is able to pro-vide the resources for industrialization to get going, this by itself will not neces-sarily provide prosperity for the majority of the population. Much depends onthe character of the industrialization process. For example, import-substituting-industrialization in Latin America eventually ran out of steam due to its excessiveprotectionism, inability to penetrate export markets and neglect of agriculture,among other reasons.

In conclusion, there are four key issues to be considered today regarding landreforms and poverty reduction. First, land reform in the contemporary neoliberalglobalization period requires a broader understanding than in the past. It has tobe framed in an interdisciplinary context and broadened beyond the economic toembrace the social, political, ecological and cultural dimensions of land. Thisallows raising questions about who controls the natural resources (land, water,forestry, minerals, etc.), what are the social and political rights of the peasantryand indigenous peoples living in that local space, how best to ensure thebiodiversity and ecological sustainability of a territory, and so on. In this sense,like Teubal (2003, 134), I disagree with GKI’s argument that the time for com-munal farming systems has past even though they acknowledge that these ‘couldin principle contribute to equity, efficiency, agricultural growth and a reductionin rural poverty’ (Griffin et al. 2002, 280). Quite the contrary, their time hascome, although not in the sense of returning to some past communal system butwithin the new context of the struggles of the indigenous, environmental andanti-globalization movements. The election of Evo Morales, an indigenous peasantleader, to the presidency of Bolivia in 2006 might put this view to the test.

Secondly, the resolution of the land question, understood in terms of achievinga dignified living standard for the rural poor, cannot be achieved within therural sector itself. It requires a new development strategy and interactionbetween the rural and urban sectors and between the agricultural, industrial and

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service sectors so as to overcome the exclusionary and unequal developmentpattern of the current neoliberal model.

Thirdly, a sustainable solution to the land and poverty problems cannot beobtained within the confines of the nation state but requires a new world systemwhich establishes just and equal relationships between the North and the South.The process of globalization means that problems like biodiversity, unfair tradingpractices, food security, ecological degradation, technology, finance, and so on,have to be dealt within a new international system which is responsive to theplight of the poor.

Fourthly, the land problem is not just an issue that concerns the peasantry andindigenous peoples but is of crucial importance for all citizens in the countrysideand city as well as in the South and in the North. It requires a broad enoughconsensus among the people so as to be able to implement the necessary policiesfor achieving the goals of poverty elimination, equity, social justice and sustain-able development. I am, of course, aware that such goals require revolutionarychanges which are unlikely to happen in the near future but this should not deterus from stating these aspirations.

DEVELOPMENT STRATEGIES AND POVERTY REDUCTION

How, then, can poverty be reduced and possibly overcome? It follows frommuch of the preceding analysis that poverty is a structural phenomenon. Whilesome policy measures like social safety nets, work for food, public work andsocial assistance programmes may ameliorate poverty in the short run, they areunable by themselves to solve the poverty problem. First, these measures tend tobe temporary or, if made permanent, are likely to be unsustainable due to theirhigh cost or lack of public resources to finance them. Second, and more impor-tantly, these measures fail to deal with the structural nature of poverty and thusany improvements are reversible.

Development Strategies and State Capacity

A basic requirement for dealing with the structural causes of poverty is to designand implement an appropriate development strategy. However, even such adevelopment strategy may fail to resolve the poverty problem unless changes aremade in the international system at the economic, social, political and culturallevels. What would such a development strategy look like? Is it possible to findsome lessons in the successful development experiences, such as those of the firstgroup of newly industrializing countries (NICs) in South East Asia, principallySouth Korea and Taiwan? At most it is possible to garner some clues from thesecountries as each case is to a certain extent unique, given the particular character-istics of each country, historical context and ‘institutional fashioning’ (Boydet al. 2006). However, such clues may contain powerful lessons and stimulatefurther thinking and action inasmuch as those successful cases show that it ispossible to defeat the scourge of poverty (Kay 2006).



Latin America failed to live up to its potential as within a few decades it lostits historical advantage over the East Asian NICs, having started its industrializa-tion almost half a century earlier. Meanwhile, due to the different policy choicestaken by South Korea and Taiwan they were able to leap forward, overtakeeconomically Latin America and eliminate poverty. What are the key causes thatexplain the difference in performance between the Asian NICs and Latin America?Four key factors can be highlighted.

First, South Korea and Taiwan were able to design a superior developmentstrategy compared to the more limited import-substitution industrialization(ISI) strategy followed by most Latin American countries. South Korea’s andTaiwan’s strategy could be characterized as one of redistribution with growth inwhich the State played a key role in steering the economy by providing keyprotection to, and incentives for, farmers and industrialists to encourage invest-ment and modernization of their enterprises. Furthermore, the State madesignificant social investments, especially in education and health. The strategy isconsidered superior because it led to consistently high rates of economic growthand rising incomes as well as to reduced inequality and poverty. It also cleverlycombined ISI with export-oriented industrialization (EOI) and got the sequencingright between these various phases of the industrialization process. The Stateencouraged entrepreneurs to take full advantage of the international market andwhat would be called today globalization.

Second, South Korea and Taiwan displayed a far greater State capacity ascompared to Latin America. By State capacity or statecraft is meant the ability ofthe State to design and implement strategies and public policies conducive todevelopment. For example, one notes the State’s ability to transform the landtenure system and agrarian social relations as well as encouraging entrepreneur-ship and a positive interaction between agriculture and industry which are able torespond in a flexible manner to changing internal and external circumstances.Latin America’s deficient capacity or statecraft as compared to South Korea’s andTaiwan’s is partly due to its more polarized and entrenched class structure. TheState in South Korea and Taiwan also displayed a greater ability in ‘governingthe market’ than the Latin American countries, with the obvious exception ofCuba.44

Third has been Latin America’s failure to create an agrarian structure that wasmore conducive to growth with equity or to achieve a mutually supportiveinteraction between agriculture and industry. South Korea and Taiwan imple-mented a radical land reform before they started the industrialization process,while few Latin American countries carried out any significant land reform.45

Furthermore, those Latin American countries that did introduce major landreforms generally did so after they had started to industrialize. Also governments

44 The graphic and useful expression ‘governing the market’ was coined, as far as I know, by Wade(1990). It highlights the social and political character of markets as compared to the abstract andeconomistic vision of the market by neoliberal economists.45 Various authors stress the fundamental importance of land reform and asset redistribution in thesuccessful experience of South Korea and Taiwan, among them Korzeniewicz and Smith (2000).

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failed to design supportive measures for the reformed sector which thus wasunable to take-off, often collapsed and/or was dismantled through counter-reform measures.

Fourth, the better ability of South Korea and Taiwan in designing and imple-menting appropriate human resource, industrial and trade policies is anotherfactor in explaining their superior performance. While Latin America got off toan early start with industrialization it was unable to overcome quickly enoughthe limitations of ISI and shift to a more export-oriented and competitive indus-trial structure.

All the four identified factors are closely interconnected. South Korea’s andTaiwan’s good fortune was that they managed to develop the positive linkagesbetween them, while in Latin America these factors were often in conflict. Whilethe Asian NICs succeeded in creating a virtuous and mutually reinforcing up-wardly moving spiral between these factors, the Latin American countries failedto do so.

To achieve high levels of development and eliminate poverty it is necessary toindustrialize, to a greater or lesser extent. There are, of course, exceptions to thisgeneral statement, particularly regarding small island economies and countriesblessed with rich mineral resources. However, agricultural development by itselfis unlikely to resolve the poverty problem. This is the general lesson that hasbeen learned from the historical experience of the development of today’s devel-oped countries. Agriculture can and needs to make a contribution to industrialdevelopment, especially in the initial phase. Industrialization, in turn, can stimu-late agriculture by providing key productivity-enhancing inputs for it as well asa market for its output. But agriculture should not be squeezed to such an extentthat farmers no longer have the resources or the incentives to invest, raise yieldsand expand production. The advantage of peasant farming, as shown in SouthKorea and Taiwan, is that it has a great capacity for hard and intensive work byall family members for relatively little economic return. Peasant farmers requirefew economic incentives for expanding production while landlords, especiallyin Latin America, require major and very costly incentives to achieve similarresults.

Despite the initial heavy net transfer of resources from agriculture to othereconomic sectors in Taiwan and South Korea, government policy left sufficienteconomic incentives for peasant farmers to raise significantly agricultural pro-ductivity and output. At the same time it is important for the achievement ofsustained growth that the resources transferred from agriculture to industry areeffectively used in developing an appropriate industrial structure. Industrial pro-ductivity needs to be increased so as to be able to finance capital accumulationand the eventually rising wages as the labour surplus provided by agriculturegets exhausted.

Therefore, the critical factor for securing continuous growth is the achieve-ment of greater productivity in resource use throughout the economy ratherthan the transfer of resources from one sector to another. This does not meanthat such transfers might not be important at certain stages of the development



process or that they should always go in one direction. What is vital is thatwhatever transfers are made in whatever direction, they should maximizeproductivity growth throughout the economy while at the same time safeguardingequity. To ensure such a process the State has a major role to play through anappropriate development strategy, as discussed in the cases of South Korea andTaiwan and as evidenced also by other historical experiences (Chang 2002, 2003).

Non-Governmental Organizations (NGOs)

The eradication of poverty also requires institutional reforms that facilitate socialparticipations and lead to the development of a new relationship between stateand civil society. By creating a more participatory framework it might be possibleto establish mechanisms for regulating and governing the market for thebenefit of the majority in society and particularly for the rural poor. The Stateneeds to become more decentralized and devolve some of its powers, financialresources and activities to local governments and civil organizations such asNGOs, producer and consumer organizations, trade unions, women and eco-logical associations. These should play an increasing role in policy formulationand implementation. NGOs are known to be particularly able to establish closeworking relationships with grass-roots organizations and their constituency.Throughout Latin America, NGOs working with the rural poor have greatlyincreased since the 1980s. It is as yet difficult to assess their impact, but it is oftenargued that their activities have at least ameliorated some of the negative effectsof certain policies and unfavourable market conditions. In some situations theirintervention might also have improved living standards.46

In some instances governments in Latin America have already begun to sub-contract certain activities such as technical assistance for peasant farmers to NGOs,as well as giving greater powers and resources to local government agencies by aprocess of decentralization. However, NGOs face a dilemma when they come todepend too closely on government resources and appear to be implementinggovernment policy as they may lose grassroots support and thus their legitimacy(Hulme and Edwards 1996). But if NGOs are in turn able to influence govern-ment policy by making it more sensitive and responsive towards peasant,gender, indigenous, ecological and poverty issues, then this closer relationshipis only to be welcomed. Generally, NGOs have limited resources and thisconstrains the coverage of their activities to a limited number of beneficiaries.In those countries where the State has been drastically downsized, NGOs haveoften been used as a palliative to overcome the abdication of social responsibilityby the State. Thus the closer links between State and NGOs can be a mixedblessing.

If the high rates of rural poverty in most Latin American countries are evergoing to reduced to acceptable levels, let alone be eliminated, a major shift in

46 For a critical but sympathetic analysis of the role of NGOs in rural poverty reduction, principallyin Bolivia and Peru, see Bebbington (2004c).

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power towards the rural poor and those groups committed to poverty eradica-tion has to happen. It is difficult to envisage such a scenario in the near or evendistant future. But this does not mean that concerned researchers and policymakers should give up on what may appear as utopian policy scenarios forpoverty eradication. The increasing competitive gap between peasant and capi-talist farming due to agriculture’s unequal modernization limits the survival ofthe peasant producers and perpetuates rural poverty. The neoliberal slogan of‘getting prices right’ is certainly not a panacea for rural development (Binswangeret al. 1995). A major step in tackling rural poverty requires a redistribution ofassets as well as the empowerment of peasants and rural workers. It also calls forgovernment policies that facilitate peasant access to human resource develop-ment, credit and technical assistance programmes. Governments also have togive greater priority to rural diversification, education, health and infrastruc-ture that are targeted particularly at smallholder communities. NGOs and theprivate sector can implement some of these projects. Such policy reforms havelittle chance of succeeding unless peasants and rural workers develop their ownorganizations such as producer and community associations, cooperatives andtrade unions. It is only through the creation of a countervailing power by peasantsand rural workers that they will be able to shape the future to their advantagerather than having to continually accept the disadvantages of the past and present.Whether or not these proposals will be adopted is an open question, but there aregrounds for some optimism as new indigenous, ecological and peasant move-ments have emerged which are contesting neoliberal policies.

Neoliberalism and the Poverty Reduction Strategy Papers (PRSPs)

In the late 1990s the World Bank (WB), International Monetary Fund (IMF) andthe international donor community, concerned with the disappointing results ofthe so-called neoliberal ‘Washington Consensus’ policy reforms and the perva-siveness of poverty, provided an incentive for the poorest countries to developso-called Poverty Reduction Strategy Papers (PRSPs). If the PRSPs of the so-called Highly Indebted Poor Countries (HIPCs) were considered to be appropri-ate, they became eligible for debt relief and additional financial resources mighteven be provided in support of the poverty reduction scheme. A distinguishingcontribution of the PRSPs is its effort to bring together key stakeholders througha so-called national dialogue to define strategies to reduce poverty.

In Latin America, Bolivia, Honduras and Nicaragua became eligible fordebt relief and access to concessional IMF and WB support having producedPRSPs and fulfilled some other requirements. It is commendable that the PRSPsin all three countries take a comprehensive approach to poverty reduction andthat some effort is made at engaging stakeholders through national dialogueprocesses of consultation. However, they unfortunately tend to focus on short-term macroeconomic adjustment and do not really provide a strategy for povertyreduction but merely are an enumeration of public policy measures directedat alleviating poverty without a clear setting of priorities or strategic choices.



Furthermore, in the national dialogue the stakeholders were prevented fromdiscussing the country’s macro-economic policy agenda. This strengthenedthe common suspicion among people that the PRSPs were elaborated by theirgovernment so as to obtain debt relief rather than giving priority to povertyreduction.

Another common critique of the PRSPs in all three cases is that they arealmost exclusively concerned with maximizing economic growth under theassumption that this will automatically lead to poverty reduction. While highrates of growth may facilitate poverty reduction, it is far from clear that this willoccur automatically through some sort of ‘trickle-down’ mechanism. Little, ifanything, is proposed in these PRSPs on redistributive mechanisms for reducingpoverty and inequality. Experts tend to agree that without some redistributivemeasures it is highly unlikely that the Millennium Development Goals (MDGs)of halving the percentage of people who live on less than US$1 a day by 2015will be achieved even if the countries concerned manage to attain high rates ofgrowth (Russo 2003; Vos 2003).47

In view of the limited ‘trickle-down’ and even income concentrating effect ofcurrent neoliberal development strategies, some scholars, as well as the WorldBank, have proposed ‘pro-poor growth’ or ‘pro-poor’ policies which aim at agrowth path that is more conducive to reducing poverty (Birdsall et al. 1998;Shorrocks and van der Hoeven 2004; Klasen 2004; Tungodden et al. 2004).Evidence shows that high inequality is associated with low elasticity of povertyto growth (Eastwood and Lipton 2000). Policy measures that are conducive topro-poor growth tend to focus on rural development, especially on the peasantsector, as well as on the urban informal economy due to their more positiveemployment and income redistribution effects as compared to the modern capi-talist sector (Carter and Coles 1998; Dorward et al. 2004a, 2004b; Klasen et al.2004). More radical proposals even include asset redistribution such as landreform. However, these pro-poor growth policies are not particularly original assimilar measures were already proposed in the early 1970s by those advocating a‘redistribution with growth’ and ‘basic needs’ development strategy (Chenery etal. 1974; ILO 1976; Ghai et al. 1977). What is disturbing is that none of the LatinAmerican PRSPs proposes a ‘pro-poor growth’ or similar development strategy,this revealing a lack of strategic and long-term vision regarding poverty eradica-tion (Vos and Cabezas 2004). Such an omission further highlights the fact thatthe PRSPs are framed within the current dominant neoliberal policy framework,albeit of a second generation kind, as it tries to deal with some of the negativeconsequences of the first generation type of neoliberal reforms, such as povertyalleviation and other social measures.

Another aspect largely missing from the PRSPs is the global context, pro-bably because it is outside their remit. The PRSPs tend to focus on domestic

47 However, the Millennium Development Goals are also problematic for poverty analysis andpolicy, as argued trenchantly by Saith (2005) who, in particular, criticizes the notion of a poverty lineand certain poverty targets.

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policies and do not question the existing international economic system.Reforms of the international trading system and the global financial architecturewhich eliminate their discriminatory aspects against developing countries couldcertainly improve their development prospects and facilitate the introduction ofpro-poor growth measures. Even such mainstream economists as Jeffrey Sachs,albeit from a more centrist position, advocate a series of reforms in internationaleconomic relations as part of the goal to eliminate poverty (Sachs 2005).

The impact of the PRSPs on the reduction of rural poverty in Bolivia,Honduras and Nicaragua has so far been disappointing due to lower thanexpected economic growth and the lack of commitment by governments to apro-poor rural development strategy. Agrarian policies in the three countriesemphasize agricultural exports and give priority to agroindustry which tends tofavour the capitalist farm sector with few, if any, spin-offs for peasant agricul-ture (Cornally et al. 2004; Kay 2005a). However, some more labour-intensivenon-traditional agricultural exports like horticulture and floriculture do createsome employment opportunities for rural workers, albeit sometimes underprecarious conditions.

Although the PRSPs do mention that the land tenure system is an obstacle topoverty reduction, the land policy measures focus on improving the land regis-tries and on regularizing land titles so as to give greater security to propertyowners in the expectation that this will stimulate investment and modernizeagriculture. International donors have often provided much of the funds for themodernization of cadastres and the land titling programmes. So far these meas-ures have not had a significant impact on improving the livelihoods of small-holders. Furthermore, the plight of the mass of landless peasants and indigenouscommunities is largely ignored. Nevertheless, in Bolivia many indigenous com-munities have been able to improve their property rights over their territory,although this has little to do with the PRSPs and more with their ongoing massmobilizations for their ancestral rights (Urioste and Kay 2005).

According to a study carried out by Trócaire, a well-known and respectedIrish development NGO, ‘IFAD is one of the international organisations whichhas made the largest contribution to debates around the causes of rural povertyand the policies to combat it’ (Cornally et al. 2004, 79). This is a matter ofjudgement and thus views on this assessment may differ. But I have no hesita-tion in agreeing with IFAD’s (2002, 6) evaluation as to the main constraintsfacing Latin America regarding the eradication of poverty:

(a) adverse macroeconomic policies; global and regional financial crises andpervasive barriers to trade applied by developed countries; (b) institutionalweaknesses; (c) lack of access to assets such as land, water and finance, etc.;(d) limited investments in human and social capital, poor infrastructure andinsufficiently developed support services; and (e) difficulties in dealing withissues related to heterogeneity, gender and ethnicity in rural areas.

However, the Trócaire study also laments the lack of influence of IFAD on thedesign and implementation of the PRSPs as well as on other related policies for



tackling rural poverty which it attributes to IFAD’s lack of physical presence inthe region (Cornally et al. 2004, 80).

I fully endorse the call that the authors of the Trócaire study make to IFAD totake a leadership role in the critical area of land reform and access to land for thepoor (Cornally et al. 2004, 82). However, I am less optimistic than they appearto be as to IFAD’s commitment in taking up this challenge given the politicallysensitive nature of this issue in the countries concerned. But I am also less certainthat IFAD’s view on land reform is adequate for making a major difference tothe highly unequal land tenure structure in most of the countries of the region.While IFAD states that ‘extreme land inequality is bad for growth, and steers itsbenefits away from the rural poor’ (IFAD 2001, 5)48 and that ‘land redistributionis a powerful weapon against poverty’ (IFAD 2001, 73), by seemingly endorsingthe World Bank’s proposals for ‘market-friendly’ or ‘market-assisted’ landreform it limits any possibility of major land redistribution and thus of ruralpoverty eradication.49 This support of the World Bank position on land reformarises from IFAD’s unduly negative view on the statist and expropriatory landreforms of the past as well as their view that ‘agrarian reform based on theexpropriation of land is no longer viable’ (IFAD 2002, 9).50 Land reform isindeed a crucial weapon in the fight against rural poverty but a ‘market-friendly’,‘willing-seller and willing-buyer’ or ‘negotiated’ land reform will not take usvery far in achieving the desired goal.

From Neoliberalism to Neostructuralism? The Case of Chile

The record so far shows that, ‘on average, in the Latin American countriesneoliberal reforms . . . have failed to put in place policies that firmly advancegrowth, stability, the reduction of poverty and inequality, and improvementsof the human capital base’ (Huber and Solt 2004, 162). Among the reasonsadvanced for this failure is the dogmatic and uniform way in which the neoliberalreforms were implemented with scant regard for the different economic, social,political and cultural contexts of the various countries.51 Outcomes certainlyvaried among different countries, also, due to differences in factors such as theconsistency or inconsistency in the application of the neoliberal reforms andpolicies, their degree of completion and international factors (Stallings and Peres2000). Some analysts stress the key importance of the institutional context indetermining the outcome of development strategies and policies (Walton 2004).

48 As stated more forcefully by Ruben and Lerman: ‘access to land is the main determinant ofwell-being in rural communities. Giving rural people more land is the surest way of alleviatingpoverty, increasing incomes, and improving welfare’ (2005, 44).49 For the World Bank’s evolving view on land reform, see Deininger and Binswanger (2001).50 For a similar view, see also Quijandría et al. (2001, 53). IFAD too readily assumes thatland reforms based on expropriation are no longer viable, seemingly forgetting the ongoing Brazilianland reform programme as well as the continuing mobilization by peasants and indigenous groupsfor land and territory in many countries.51 For a comprehensive assessment of neoliberalism in the various dimensions mentioned, see Gwynneand Kay (2004).

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Indeed, as discussed in the previous section, one of the key ingredients for thesuccess of South Korea and Taiwan has been its superior statecraft or state capacityas compared to Latin America.

Concerned scholars and institutions have become increasingly vociferous inpointing out the adverse impact of Latin America’s neoliberal agriculturalmodernization on the peasantry which has been characterized as ‘concentratingand exclusionary’.52 Instead they advocated a strategy that includes the peasantryin the modernization process (Murmis 1994). More generally, and in a similarvein, neostructuralists have made proposals for ‘changing production patternswith social equity’ so as to meet the challenges of an increasingly global worldeconomy (ECLAC 1990). The achievement of such a broad-based and pro-poordevelopment strategy requires more proactive state policies than those contem-plated by neoliberals so as to overcome market failures and biases against thepeasantry. So far neostructuralism provides the most feasible alternative at presentto neoliberalism in the current context of globalization and thus merits somediscussion.

Neostructuralists argue that globalization in the current neoliberal phase, farfrom leading to convergence as asserted by neoliberals, reproduces and some-times exacerbates four major asymmetries: in technical progress, in financialvulnerability, in trade vulnerability and in the economic mobility of factors ofproduction.53 While the neoliberal reforms have greatly enhanced the mobility ofcapital, the mobility of labour continues to be restricted. This asymmetry skewsthe distribution of income in favour of capital, and places labour at a disadvan-tage, especially in the periphery or developing countries due to their surplus oflabour. To overcome these asymmetries the neostructuralists propose a globalagenda that includes measures to enhance the transfer of technical progress fromthe centre to periphery countries; promote the development of institutional,social, human and knowledge capital so as to strengthen endogenous growth incountries of the periphery; ensure adequate participation in decision-making atthe international level; gradually lower the barriers to labour migration, particu-larly from countries of the periphery to those of the core; decrease financialvolatility; and reduce the sizeable production and export subsidies of agriculturalcommodities in the centre or core economies (ECLAC 2002).

More specifically related to the problem of poverty the neostructuralistsemphasize the need for enhancing equity and citizenship. As for equity, this has

52 For useful overviews of agriculture’s neoliberal transformation and its impact on the peasan-try, see Weeks (1995), David (2001), Brass (2002), Rubio (2003), Bendini et al. (2003) and Kay(2005b).53 There is an increasing literature, as well as debates, on the relationship between globalization andpoverty. For some analysts globalization leads to greater inequality and poverty (see, for example,Wade 2004); for others it leads to higher rates of growth and to less inequality and poverty (see, forexample, World Bank 2002). For a general and brief survey on how globalization is affecting ruralpoverty, see Killick (2001). For an analysis of how to improve the relationship between internationaltrade and poverty reduction, see United Nations Conference on Trade and Development (2004).Some decades ago structuralist and dependency theories had already drawn attention to the possiblenegative effects of trade on income distribution and poverty in developing countries.



three dimensions or goals. ‘The first of these is to minimize the proportion ofpersons and households whose living conditions are below those which societyconsiders acceptable, not only economically but also socially and politically’(ECLAC 1992, 15). The second refers to the progressive abolition of discrimina-tion due to social, ethnic or gender differences. Finally, the third is concernedwith the concentration of power and wealth. As for citizenship, the neostructu-ralists lament that globalization and neoliberalism have eroded social cohesionand solidarity as well as collective action for the common good. The neoliberals’emphasis on market relations has fragmented and individualized society. Neo-structuralists thus propose to reconnect the individual with society by develop-ing citizenship that implies a reciprocal commitment between public institutionsand the individual. For this purpose the State should promote education,employment, health and social security among the citizenry. The enhancementof social cohesion implies the individual’s participation in public life and in thedecision-making processes which affect their livelihoods and the country’sfuture. It is only by strengthening citizenship that it is possible to gain sufficientsocial cohesion and political legitimacy for undertaking the major transforma-tions required for achieving equitable and sustainable development and the elimin-ation of poverty (ECLAC 2001).

So far Chile is the only country in Latin America to have come near tofulfilling the expectations of the neoliberal reformers. The initial set of reforms,from the military coup in September of 1973 until the economic crisis of 1982–83, was indeed cast within a highly doctrinaire and authoritarian neoliberal mould.Thereafter, the government shifted to a more pragmatic set of neoliberal policiesthat introduced some economic controls and social policies. With the democratictransition in 1990, successive ‘Concertación’ governments, formed by a coalitionof centre and left-wing parties that are still in power, have attempted to shift toa ‘growth with equity’ or neostructuralist set of policies. The Concertación govern-ments achieved consistently higher rates of economic growth than during thedictatorship while at the same time halving poverty largely as a result of substan-tial increases in social expenditure.54 While in 1990 38.6 per cent of the country’spopulation lived below the poverty line, by 2003 this had fallen to 18.8 per centand the extreme poverty or indigence levels had diminished from 12.9 per centto 4.7 per cent. As for rural poverty this had dropped from 39.5 per cent to20.1 per cent, while rural indigence fell from 15.2 per cent to 6.2 per cent duringthe same period. In urban areas the levels of poverty and indigence for 2003 were12.4 per cent and 4.5 per cent, respectively (CEPAL 2005, 324; Gobierno deChile 2005). Thus, in relative terms, poverty and indigence in the rural areascontinued to be higher than in the urban areas. What is noteworthy is thatthe percentage of rural indigent people fell more sharply than the percentage ofthe non-indigent poor.

54 A comprehensive analysis of rural poverty and public policies during the Concertación govern-ments is done by Köbrich et al. (2004). For a comparison of rural poverty in Chile between thelate 1960s under a democratic government and the latter part of the Pinochet dictatorship, seeScott (2000).

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It is by grafting neostructuralist elements on to the inherited neoliberaleconomic framework that the Concertación governments managed to succeed inhalving poverty. But statecraft, relatively strong and stable institutions, andcompetent economic and social policies also contributed to this favourable out-come of high growth rates with major reduction in poverty. Within LatinAmerica, only Uruguay has lower levels of poverty than Chile, but by 2000Chile had overtaken Uruguay in the human development index (UNDP 2002,153). Moreover, while in almost all Latin American countries poverty dimin-ished between 1990 and 2002, it was only by a small margin, as can be gauged bythe fact that for the whole of the region poverty only declined from 48.3 per centto 44.0 per cent of the total population, while rural poverty dropped from65.4 per cent to 61.8 per cent (ECLAC 2004, 283). However, the Concertacióngovernments have so far failed to deliver on equity as it has been unable toreduce income inequality, which continues to be one of the worst in Latin America(ECLAC 2004, 301). Thus it seems that the mixed neoliberal and neostructuralistmodel followed by the Concertación governments will not resolve the inequalityproblem. More radical measures are required for tackling inequality. But how toavoid that these jeopardize growth is indeed a challenge.

CONCLUSIONS: LESSONS FOR POVERTY STUDIES AND POLICYINTERVENTIONS

I have endeavoured to present some key issues concerning the analysis of ruralpoverty, particularly, though not exclusively, within the Latin American con-text. Most of these issues I have only been able to sketch out and they wouldrequire further analysis. However, the intention of this article is not necessarilyto provide a full analysis but to stimulate reflection, discussion and furtherresearch on some of the topics raised. Some of the main findings of the previousanalysis, though by no means necessarily all, could be summarized as follows byway of conclusion.

Poverty is a complex problem with multifarious dimensions: economic, social,political, cultural, and other. The development literature focuses too narrowlyon the economic factors and gives insufficient attention to the social and, aboveall, political factors of poverty. Poverty reduction measures are required at allthese varied levels so as to resolve the problem. Furthermore, poverty is a socialrelation embedded in particular multivariate structures. Poverty is being pro-duced and reproduced by certain economic, social, political and cultural systemsin which the production of wealth also leads to the production of poverty both atnational and global levels. Thus to overcome poverty and inequality it is neces-sary to change such systems via major reforms as argued by structuralists, bydependency theories and by anti-globalization movements, among others.

Following from the above, integrating further developing countries into theworld economy through liberalization, trade and investment relations is not thepanacea for overcoming poverty. Neither national neoliberal policy measuresnor a neoliberal integration into world markets can be the key driving forces for



poverty reduction. Economic growth and exclusive reliance on the market mecha-nism and the so-called ‘trickle-down’ effect will never resolve the poverty pro-blem. While the PRSPs reveal a new commitment to poverty reduction, theyhave so far failed in their objectives largely because they are embedded within aneoliberal framework.

Economic growth by itself will not be enough to reduce poverty signifi-cantly, especially in the Latin American context as it is the most unequal regionof the world having the highest level of wealth and income concentration. IfLatin America had the distribution of income of South East Asia then alreadyextreme poverty would fall by 80 per cent (Burchardt 2004, 127; Inter-AmericanDevelopment Bank 1998). Thus a more egalitarian and widespread access toassets, either individually or collectively, is a fundamental prerequisite for achiev-ing a major reduction in poverty.55 In this sense the land reform issue is farfrom being closed, although it has to be set in the new context and needs to becomplemented with a series of other less controversial measures which facilitatethe rural poor’s access to land and other resources, as for example through theland sales and land rental markets. But redistribution of wealth in turn is not asufficient condition for sustainable poverty reduction, especially in today’s globalizedcontext. Thus economic, social and political measures for encouraging produc-tivity growth, innovation and competitiveness are also required. A more egalitarianand properly regulated international financial and trading architecture is furtheressential for facilitating such transformations within developing countries.

The State continues to be pivotal for resolving the poverty problem. Only byenhancing State capacity, domestically as well as globally, and by implementingappropriate development strategies, nationally and internationally, will it be pos-sible to make major inroads into poverty reduction. Developing countries whichhave followed a redistribution with growth development strategy have beenmore successful in reducing poverty and rural poverty in particular (as a result ofa comprehensive agrarian reform) than those countries which have implementedan import-substitution industrialization strategy (which largely neglected peasantfarmers) or a neoliberal strategy (which left the peasantry at the mercy of largelyunrestricted global market forces). Within the Latin American context it is mybelief that a neostructuralist development strategy as proposed by some scholarsbut principally by the United Nations Economic Commission for Latin Americaand the Caribbean (ECLAC) offers the most feasible policy option, despite itslimitations, for achieving the twin objectives of growth with equity.56

55 A strong case for a major redistribution of resources and specifically for land reform is also madeby Hoffman and Centeno (2004). In their view Latin America’s high degree of inequality reproducesnot only poverty but also internal colonialism, the weakness of the state structures and the region’sdependency within the world system.56 ECLAC published a series of books outlining the neostructuralist perspective on sustainabledevelopment, social equity, open regionalism, human resources, citizenship, globalization, incomedistribution and poverty, among other development issues. Several of their main ideas are discussedin Gwynne and Kay (2004). For a key neostructuralist text, see Sunkel (1993) and for a neostructuralistperspective on rural development, see Figueroa (1993). For a well-argued discussion of the limita-tions of the neostructuralist approach, see Leiva (forthcoming).

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As far as rural development and rural poverty are concerned, a fruitful analyticalframework, at least as a starting point, is given by the livelihoods approach. Itsvirtue is to focus on assets and the actor’s agency in constructing their livelihoods.Its downside is that it underestimates the importance of structural and politicalfactors. Interventions by governments, NGOs, foreign donor agencies andinternational institutions like the World Bank designed to alleviate poverty may(unwittingly) contribute to the reproduction of poverty due to misconceptionsabout the nature and causes of poverty in developing countries. Given the com-plexity of the poverty problematic, the exchange of ideas and experiences as wellas the collaboration in joint initiatives should be welcomed. This should permita deeper and better understanding of the causes of poverty as well as moreinsightful evaluations of the various pro-poor policy interventions (suchas the PRSPs). Thereby it should also allow for a more valuable contribution ofideas to the design of more effective development strategies and policy interven-tions for poverty reduction and specifically for meeting the wider MDGs.

The battle against rural poverty is not only about designing and monitoringsuitable pro-poor rural development projects but above all a contest to convincethe majority of the citizens that poverty reduction is a key task for humanity andthat this requires a development strategy that entails redistribution of resourcesat various levels so as to be able to create more wealth without the stigma ofpoverty. Thus policy makers and those concerned with poverty reduction pro-grammes should engage more actively in this campaign of public education andawareness, or as Paulo Freire (1985) would say ‘concientización’ or ‘conscientization’,so as to create the ideological, social and political climate which would enablethe implementation of sustainable poverty reduction development strategies.Due to the structural causes of poverty, its reduction and eventual eradicationrequire major transformations within countries and between countries due to theunequal economic, social and political relations of the global system.

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Rural Poverty and Development Strategies in Latin America

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