Land Distribution, Incentives and the Choice of Production Techniques in Nicaragua
AbstractDoes the distribution of land rights affect the choice of contractible techniques? I present evidence suggesting that Nicaraguan farmers are more likely to grow effort-intensive crops on owned rather than on rented plots. I consider two theoretical arguments that illustrate why property rights might matter. In the first the farmer is subject to limited liability; in the second the owner cannot commit to output-contingent contracts. In both cases choices might be inefficient regardless of land distribution. The efficiency loss, however, is lower when the farmer owns the land. Further evidence suggests that, in this context, the inefficiency derives from lack of commitment.
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Bibliographic InfoPaper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers with number 34.
Date of creation: Apr 2002
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Agricultural productivity; asymmetric information; crop choice.;
Other versions of this item:
- Oriana Bandiera, 2002. "Land distribution, incentives and the choice of production techniques in Nicaragua," LSE Research Online Documents on Economics 3545, London School of Economics and Political Science, LSE Library.
- Bandiera, Oriana, 2002. "Land Distribution, Incentives and the Choice of Production Techniques in Nicaragua," CEPR Discussion Papers 3141, C.E.P.R. Discussion Papers.
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
This paper has been announced in the following NEP Reports:
- NEP-AGR-2003-11-23 (Agricultural Economics)
- NEP-ALL-2003-10-28 (All new papers)
- NEP-DEV-2003-10-28 (Development)
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