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The Political Economy of Rural Property Rights and the Persistence of the Dual Economy

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  • Fergusson, Leopoldo

Abstract

If property rights in land are so beneficial, why are they not adopted more widely? I propose a theory based on the idea that limited property rights over peasants' plots may be supported by elite landowners (who depend on peasants for labour) to achieve two goals. First, like other distortions such as taxation, limited property rights reduce peasants' income from their own plots, generating a cheap labour force. Second, and unlike taxation, they force peasants to remain in the rural sector to protect their property, even if job opportunities appear in the urban sector. The theory identifies conditions under which weak property rights institutions emerge, providing a specific mechanism for the endogenous persistence of inefficient rural institutions as development unfolds. It also predicts a non-monotonic relationship between the quality of rural property rights and land in the hands of peasants.

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Paper provided by Universidad de Los Andes, Economics Department in its series Documentos CEDE Series with number 146455.

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Date of creation: Jun 2012
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Handle: RePEc:ags:ulaedd:146455

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Keywords: Political economy; institutions; economic development; taxation; property rights; land; dualism; Political Economy; H2; N10; O1; O10; P16;

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References

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  2. Aghion, Philippe & Caroli, Eve & García-Peñalosa, Cecilia, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Scholarly Articles 12502063, Harvard University Department of Economics.
  3. Sergio Rebelo & Piyabha Kongsamut & Danyang Xie, 2001. "Beyond Balanced Growth," IMF Working Papers 01/85, International Monetary Fund.
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  1. Why are property rights not adopted more widely?
    by UDADISI in UDADISI on 2012-07-28 20:24:00
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Cited by:
  1. Juan Carlos Muñoz-Mora & Santiago Tobón-Zapata & Jesse d'Anjou, 2014. "Does land titling matter? The role of land property rights in the war on illicit crops in Colombia," HiCN Working Papers 168, Households in Conflict Network.
  2. Mizuno, Nobuhiro, 2013. "Political Structure as a Legacy of Indirect Colonial Rule: Bargaining between National Governments and Rural Elites in Africa," MPRA Paper 48771, University Library of Munich, Germany.

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