ABSTRACT
This paper seeks an explanation of the limited success of land reforms in redistributing land in Latin America during the 1960s and 1970s, in spite of their widespread implementation. A rational choice model of farmer behavior incorporating transaction costs on labor and credit, and a game-theoretical approach between landlords and the state are used for that purpose. We show that land reform failed to be redistributive because it sought to first modernize large farms, which allowed landlords to reinforce their power over the state. This, in turn, enabled them either to obtain credible commitments of nonexpropriation if they would modernize, or to successfully use rent seeking to externalize the cost of modernization and make expropriation with compensation no longer feasible.
