The Impact of “Market-Friendly” Reforms on Credit and Land Markets in Honduras and Nicaragua

This article explores the impacts on credit access and agrarian structure of land market liberalization policies undertaken in Honduras and Nicaragua during the 1990s. Like liberalization efforts pursued in many Latin American countries, these market-friendly reforms were designed to activate land transfers and enhance agricultural efficiency, in large part by improving the access of the rural poor to both credit and land markets. Panel data sets gathered in Honduras and Nicaragua are used to compare title, credit, and land access patterns before and after the reforms. Descriptive nonparametric regression analyses show that despite major gains in titling across the land size spectrum, and some increase in land market activity, the other hoped for improvements in credit and land access did not occur, and appear unlikely to occur without further policy attention to credit markets.