Land Taxation, the Poor, and Sustainable Development
Author(s)
Strasma, John D.; Celis, Rafael
Abstract
Land policies are at the very heart of the problems of poverty, deforestation, and agricultural productivity in Central America. Despite land reforms in several countries, much arable land remains in holdings that are too large or too small for efficient production. Present policies create perverse incentives that cause much land to be over- or underutilized. Some of those policies, though well intended, actually discourage investment and induce low productivity, deforestation, squatting, and violence. One implicit policy with damaging repercussions has been not having an effective land tax. This chapter argues that land taxes are one of the most effective potential policy measures now available in Central America to reduce both poverty and the destruction of natural resources in a manner compatible with sustainable development. The authors argue that an alternative strategy is needed, one in favor of both the poor and natural resources. A modern land survey and tax are key parts of this strategy. The chapter examines the potential relationship between agrarian reforms and pressure on fragile lands, and suggests a list of the decisions and steps required to implement effective instruments for initiating sustainable development in Central America.
