Falcone, Stefano and Rosenberg, Michele (2025) Agricultural modernization and redistributive conflict. Journal of Development Economics, vol. 177.

Abstract

Agricultural modernization is a critical driver of economic development. However, it can generate conflicts on previously uncontested land. This paper shows that the expansion of capital-intensive agriculture induced by market-oriented reforms and technological innovation in the mid-1990s in Brazil increased the number of land occupations by subsistence farmers and rural workers. Our identification strategy exploits local variation in the profitability of investments in soy production given by geographic characteristics and the timing of our shock in a difference-in-differences setting. We find that higher land inequality increases conflict by decreasing land access for subsistence farmers and rural workers while creating political incentives for social movements opposing large farm expansion.