Is there scope for growth with equity?: the case of land reform in South Africa

Development economists have long aimed to identify programs and policies that can, by simultaneously improving equity and efficiency, foster sustainable growth. Land reform provides a classical example for such a programme. However, fears of not being able to achieve equity objectives has lead South African authorities to impose a number of restrictions that have arguably slowed program implementation and limited its outreach.This article use evidence from a survey of about 1,200 South African land reform beneficiaries to argue that such fears were exaggerated and that there is no conflict between efficiency and equity goals. Economically viable projects were oriented more towards the poor than unprofitable ones and characteristics of such projects are used to identify changes in program rulesto combine economic viability with equity, speed up implementation, and thereby contribute to the transformation that will be needed if rural South Africa is to deal successfully with the challenges of the 21 st century.<B>Policy recommendations:</B>A land reform programme that is more clearly focused on the goal of economic viability, with a minimum equity criterion, could make a significant contribution to overcoming rural poverty in South Africa Greater participation by the private sector, more scope for participation and 'ownership' by beneficiaries, communities, and local governments, and adoption of more flexible institutional arrangements for production and internal management of the beneficiary group are required transparency, and accountability at the local level will be critical to dispel fears that land reform is just another means of political favoritism, rather than an instrument to transform the rural sectorIn addition to having private financial intermediaries carry a real credit risk, greater involvement of civil society at large to ensure that the programme is not driven by landlords, as well as a stronger focus on capacity building at the community level, seem necessary to ensure that the programme will be sustainable in the long termThe elimination of barriers within the land rental market, through reform based on a 'community-based' approach, linked with the collection or even increases in the rate of a land tax (which could provide financing for a programme of land redistribution) is likely to provide far greater benefits to the poor than what has been possible through a programme of purely redistributive land reformIn all of these instances, the challenge is to move towards an understanding of land reform as a process that aims to empower the poor, improve productivity, and create sustainable rural livelihoods, rather than just redistributing a certain number of hectares of land. [Author]