Interest groups, vested interests, and the myth of apolitical administration : the politics of land tenure reform on the South Island of New Zealand

Abstract

This report explores the political history, property rights, and administrative politics of the land tenure reform process to ask why the Crown has paid farmers millions of dollars to convert land from leasehold to freehold. Since 1992, runholders have received collectively 58% (or 165,446 hectares) of the reformed pastoral estate as fee-simple, and $15.5 million. The report documents the results of research in the South Island of New Zealand during Fulbright grant year 2004-05.

Land tenure reform is a process of dividing up the Crown pastoral estate into freehold and public conservation land. The pastoral estate constitutes about one-tenth of NZ's landmass. The Crown holds all 2.4 million hectares of the pastoral estate; and it has alienated, or leased out, certain use rights to the lessees. Now the Crown is in the process of purchasing pastoral and occupation use rights and land improvements back from the lessee, on the hectares shifting into DOC custody. And the lessees are in the process of purchasing a whole bundle of Crown-held use rights on the hectares passing to freehold. This Crown-held bundle of use rights includes subdivision, condominium construction, ski field development, viticulture, safari park development, and automobile tyre testing centre development. The Crown-held bundle even includes such mundane use rights as planting grass seeds without prior consent of the Commissioner of Crown Lands.

Chapter 2 deconstructs the numerical results - hectares and dollars - of the land reform policy endeavour so far, and reveals that these numbers are contested. Quite simply, it depends on what you count and how you count them. And those methodological counting decisions, while appearing dry and clinical, most certainly are not. Numbers are the stuff of public policy, and decisions on how to count them are the stuff of politics. Further, the number of hectares is misleading, as it is use rights being exchanged here, not the hectares themselves.

Chapter 3, "Interest Groups, Property Rights, and States' Rights: The Sagebrush Rebellion and New Zealand Land Tenure Reform", examines the political history of South Island public grazing land, from first establishment of pastoral licenses in 1856 to the 1998 passage of legislation governing the disestablishment of the pastoral lease system. It takes a comparative perspective, using the Sagebrush Rebellion launched by ranchers in the American West as a lens. It concludes that NZ farmers' push for freehold succeeded while the American ranchers' campaign failed, for three reasons: 1) property rights arrangements in NZ pastoral leases allow lessees to exclude recreationists and other trespassers, while not in the US; 2) the lack of legally-sanctioned reliable recreation access and conservation provisions in the leases led NZ's most prominent conservation and recreation advocacy groups to join the farmers' campaign for land tenure reform, while similar US groups opposed the Sagebrush Rebellion; 3) NZ farmers were able to use administrative and institutional momentum from the state sector reforms of the 1980s in their campaign for reform.

Next chapter 4, "Trading Sticks with the Crown: Redistributing Property Rights to Effect Land Use Change" explores the current distribution and redistribution of property rights in the Crown pastoral estate, in order to examine the merits of using property rights as a tool to create land use change. It deconstructs property rights arrangements in pastoral leases into their constituent parts and finds that there is some uncertainty surrounding the relationship between the lessee-held exclusive occupation right and the Crown-held non-pastoral use rights. It concludes that this uncertainty is a matter to be addressed by the Courts, not by government contractors or even government officials. Finally, it offers alternative policy tools to achieve the desired changes in land use with an eye to reducing the cost to the government.

The last chapter, "Who is sticking up for the Crown? The myth of apolitical administration in New Zealand land tenure reform" evaluates the results of land reform on the national scale by looking at the administrative politics within the process managed by Land Information New Zealand (LINZ). It observes that the numerical results of tenure review are strongly biased in favour of the farmer, with the farmers receiving 58% of the land as freehold, fee simple private property, and receiving millions of dollars in "equalization payments". It concludes that LINZ's subscription to the myth of apolitical administration is leading the agency that represents the Crown's vested interest in the land to take a position of neutrality in negotiations instead of one of advocacy. LINZ relies on a functional split between policy and operations, which in turn relies on the oldest trick in the book of public administration - the politics-administration dichotomy. These two models share a common goal - avoiding agency capture in policy implementation - and administrative tool - neutrality.

But in this case, striving for neutrality is neutralizing the Crown's vested interest in the land. LINZ cannot be neutral and advocate for the Crown's interest at the same time. Thus over-reliance on the myth of apolitical administration is leading to a result that out-captures agency capture theories of interest group politics.

This report does not paint a rosy picture of land tenure reform. It concludes that the myth of apolitical administration supercedes interest group politics and property rights, and leads the Crown to take a neutral stance in the face of powerful special interests motivated to diversify land use, be it for venison farming, viticulture, or lifestyle blocks.

It is impossible to remove politics from inherently political decisions such as redistributing valuable resources. And it can be a dangerous endeavour. In this case, striving for neutrality in order to achieve a fair, unbiased, and uncaptured result is doomed to fail on all counts, no matter how well-intentioned the attempt.

The Crown is asserting neither its property rights nor its bargaining powers. Instead, the Crown's position of neutrality leads it to give away valuable property rights and pay constituents to take it. In short, the myth of apolitical administration makes the Crown complicit giving away freehold title to New Zealand's iconic high country, and paying the lease-holders to take it.

To sum up, the politics of land tenure reform remain win-win as long as the Crown agrees to lose. This is not an indictment of LINZ. I have no data to support a claim that the agency's attempts at neutrality are anything but honest, competent, and well-intentioned. But placing "neutral" and "vested interest" in the same task description will not work. One will lose. In this case, it is the vested interest, the Crown, and ultimately the NZ people.