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Land Distribution, Incentives and the Choice of Production Techniques in Nicaragua

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  • Oriana Bandiera

Abstract

Does 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.

Suggested Citation

  • Oriana Bandiera, 2002. "Land Distribution, Incentives and the Choice of Production Techniques in Nicaragua," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 34, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    • Handle: RePEc:cep:stidep:34
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    Cited by:

    1. Luis H. B. Braido, 2008. "Evidence on the Incentive Properties of Share Contracts," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 327-349, May.
    2. Niee Foning, Maxime & Kane, Gilles Quentin & Ambagna, Jean Joël & Fondo, Sikod & Abayomi Oyekale, Samuel, 2013. "The effect of incomplete land tenure contracts on agricultural investment and productivity in Cameroon," MPRA Paper 62752, University Library of Munich, Germany.
    3. de Laiglesia, Juan R., 2005. "Investment and credit effects of land titling and registration:," Proceedings of the German Development Economics Conference, Kiel 2005 10, Verein für Socialpolitik, Research Committee Development Economics.

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    More about this item

    Keywords

    Agricultural productivity; asymmetric information; crop choice.;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, 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

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