The Law of Disentailment (Ley de Exvinculación) of 1874 was the culmination of liberal reform initiatives going back to the late-colonial period and to Bolívar. It sought to end the colonial institution of Indian tribute and replace it with a universal tax on the land, to be collected from all citizens regardless of caste or race. At the same time, it aimed to break up collective landholding by Indians, on the grounds that communal property was a drag on the land market and economic productivity, and to grant titles to individual proprietors who would be free to buy and sell it. From this point on, communities were to be legally abolished. In 1880, Secretary of State Ladislao Cabrera explained the theoretical rationale: “To put this immense wealth of [indigenous community lands] in circulation, to deliver them to intelligent and capitalist proprietors, was the spirit that animated the legislature of 1874; and if the law is put into practice, public wealth will be considerably increased, and agricultural yields will also grow in the same proportion.” In fact, the state also stood to make money when individuals bought the title to their land and paid taxes, and when the state sold off any lands deemed vacant or unused. Not coincidentally, the Law would not be put into effect until after the 1880 National Convention when the Bolivian state, caught up in the War of the Pacific, sought to fill its empty coffers.

But just as Mariano Melgarejo’s prior attempt, in the 1860s, to sell off community lands met with Indian resistance, so did the land survey commissions in the early 1880s. In 1881, a new government resolution was forced to grant communities the option of ongoing collective title. In 1883, in response to protests by communities that had purchased the rights to their lands in the colonial period, a new law admitted that community lands with colonial titles were exempt from the survey.

The outcomes of the liberal land legislation were mixed and uneven. Indigenous tribute ended, but in practice, the new property tax was applied only to Indians. In Cochabamba, the impacts contributed to a pattern of peasant smallholding. On the altiplano of La Paz, the law contributed to a long-term weakening of the land base of communities and an expansion of the haciendas.