Economics
The Political Economy of Land Grabbing in the Global South
Quick fact
Between 2000 and 2020, over 50 million hectares of land in the Global South were transferred to foreign investors — an area roughly the size of Spain — often via opaque deals that bypass local land users.
Why this is interesting
When a Saudi company buys a million hectares of farmland in Ethiopia to grow rice for its people, national governments cheer the investment while local farmers face eviction. Why does this happen, and who actually wins?
Read the full explanation
Understanding The Political Economy of Land Grabbing in the Global South
Land grabbing is not just about agriculture; it's about power and leverage. When foreign investors acquire land in the Global South, they are often buying the right to use that land for large-scale commercial farming of crops for export, biofuel production, or even real estate. The process begins with a host government negotiating a deal, often under the influence of international financial institutions like the World Bank that promote large-scale commercial agriculture. Local communities may be consulted but often lack the formal land titles to legally protect their holdings. As a result, they can be displaced or turned into wage laborers on the very land they once owned. Economically, the host country gains foreign direct investment, employment, and infrastructure, but these benefits are often skewed toward the richer, more powerful partners. This dynamic reflects a global system where the political and economic power of multinational corporations and wealthy governments outweighs the negotiating power of poorer nations and their rural populations.
A deeper explanation
The mechanism behind land grabbing is rooted in the interlocking of economic incentives and political structures. On the economic side, the Global North and emerging economies like China and Gulf states face growing population pressure, food and water scarcity, and the need for biofuel feedstocks. Acquiring land abroad is seen as a cheaper, more secure way to produce these goods. On the political side, host governments see land deals as a source of revenue, development, and geopolitical leverage. These deals are often facilitated by international institutions that promote investment liberalization and commercial agriculture. Furthermore, land in many Global South countries is often formally owned by the state, making it easier to lease or sell without transparent community consent. This is compounded by weak governance and existing power asymmetries, where elites may benefit personally from selling land. The result is a classic example of the political economy at work: who gets what, when, and how, determined by unequal power and access to capital. Understanding this reveals why land grabs persist, despite being criticized for dispossessing the poor and causing environmental damage.