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Specificity of Control: The Case of Mexico's Ejido Reform

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  • Paul Castãneda Dower

    () (New Economic School)

  • Tobias Pfutze

    () (Oberlin College)

Abstract

An important aspect of property rights is specificity, the ability of a third party to enforce rights. The empirical literature rarely isolates the effect of specificity because exogenous changes, due to land reforms, either simultaneously change both control and specificity or exclusively change control. We investigate the effect of specificity in the context of the 1992 Salinas land reforms in Mexico, which constitutionally changed individual control rights for all communal landholders but reserved changes to specificity for a subsequent voluntary land certification program. We are able to address selection into the program by taking advantage of the peculiarities in the certification process. Using agricultural production data from before and after the reform, we demonstrate that land certification significantly increases agricultural investments but only for investments directly affected by the changes in control. We explain the results using a simple model that shows how specificity can better coordinate landholders' beliefs about the implementation of changes in control.

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Bibliographic Info

Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0188.

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Length: 54 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:cfr:cefirw:w0188

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Keywords: Property Rights; Speci city; Land Reform; Mexico; Ejido;

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  1. Lee J. Alston & Edwyna Harris & Bernardo Mueller, 2009. "De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers," NBER Working Papers 15264, National Bureau of Economic Research, Inc.
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  5. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
  6. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2007. "The Formation of Beliefs: Evidence from the Allocation of Land Titles to Squatters," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 209-241, 02.
  7. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
  8. Adsera, Alicia & Ray, Debraj, 1998. " History and Coordination Failure," Journal of Economic Growth, Springer, vol. 3(3), pages 267-76, September.
  9. Deininger, Klaus & Jin, Songqing, 2007. "Securing property rights in transition: lessons from implementation of China's rural land contracting law," Policy Research Working Paper Series 4447, The World Bank.
  10. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-37, October.
  11. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135.
  12. Gary D. Libecap & Dean Lueck, 2011. "The Demarcation of Land and the Role of Coordinating Property Institutions," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 426 - 467.
  13. Andre, Catherine & Platteau, Jean-Philippe, 1998. "Land relations under unbearable stress: Rwanda caught in the Malthusian trap," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 1-47, January.
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