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Latifundia Economics

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Abstract

This paper proposes a simple general equilibrium theory of agrarian production organization to explain the emergence and persistence of latifundia - minifundia type patterns of agrarian production organization such as have prevailed historically in many parts of Latin America. When land ownership is concentrated, the exercise of market power over land can facilitate the exercise of control over labor, as labor supply to landlord estates is affected by peasant access to land. Equilibria may emerge where landlords, behaving as multi-market Cournot oligopolists, inefficiently hoard land to drive up land rentals and corral cheaper labor into their expanding estates. Labor-service tenancy arrangements, similar to those used in practice, emerge as landlords try to price discriminate. These contracts help to restore allocative inefficiency but lead to lower equilibrium peasant wages and welfare. Population growth, differential technical progress on landlord and peasant farms, and other changes in the physical and economic environment are shown to transform equilibrium patterns of agrarian production organization in ways that are consistent with agrarian trajectories observed in late nineteenth century Chile and several other regions and periods. The model also clarifies how agents' incentives to challenge property rights change along with equilibrium agrarian structures (See my more recent closely related paper "On The Causes of Slavery or Serfdom and the Transition to Agrarian Capitalism: Domar Extended.")

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Bibliographic Info

Paper provided by Hunter College Department of Economics in its series Economics Working Paper Archive at Hunter College with number 02/1.

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Length: 40 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:htr:hcecon:02/1

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Keywords: Monoposony; agrarian organization; inequality; tenancy; slavery; serfdom.;

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References

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  1. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772 Elsevier.
  2. Sadoulet, Elisabeth, 1992. "Labor-Service Tenancy Contracts in a Latin American Context," American Economic Review, American Economic Association, vol. 82(4), pages 1031-42, September.
  3. McCulloch, Rachel & Yellen, Janet L., 1980. "Factor market monopsony and the allocation of resources," Journal of International Economics, Elsevier, vol. 10(2), pages 237-247, May.
  4. MICHAEL R. CARTER & Frederic Zimmerman, 1998. "The Dynamic Cost and Persistence of Asset Inequality in an Agrarian Economy," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 416, Wisconsin-Madison Agricultural and Applied Economics Department.
  5. Kenneth L. Sokoloff & Stanley L. Engerman, 2000. "Institutions, Factor Endowments, and Paths of Development in the New World," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 217-232, Summer.
  6. Jonathan H. Conning & James A. Robinson, 2001. "Land Reform and the Political Organization of Agriculture," Department of Economics Working Papers 2001-10, Department of Economics, Williams College.
  7. Feenstra, Robert C., 1980. "Monopsony distortions in an open economy: A theoretical analysis," Journal of International Economics, Elsevier, vol. 10(2), pages 213-235, May.
  8. Michael Kevane, 1996. "Agrarian Structure and Agricultural Practice: Typology and Application to Western Sudan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 236-245.
  9. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
  10. Nugent, Jeffrey B & Robinson, James A, 2002. "Are Endowments Fate?," CEPR Discussion Papers 3206, C.E.P.R. Discussion Papers.
  11. Schaffner, Julie Anderson, 1995. "Attached farm labor, limited horizons and servility," Journal of Development Economics, Elsevier, vol. 47(2), pages 241-270, August.
  12. Baland, Jean-Marie & Robinson, James A, 2003. "Land and Power," CEPR Discussion Papers 3800, C.E.P.R. Discussion Papers.
  13. Braverman, Avishay & Stiglitz, Joseph E, 1982. "Sharecropping and the Interlinking of Agrarian Markets," American Economic Review, American Economic Association, vol. 72(4), pages 695-715, September.
  14. Dilip Mookherjee, 1995. "Informational Rents and Property Rights in Land," Boston University - Institute for Economic Development 55, Boston University, Institute for Economic Development.
  15. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-98, June.
  16. James R. Markusen & Arthur J. Robson, 1980. "Simple General Equilibrium and Trade with a Monopsonized Sector," Canadian Journal of Economics, Canadian Economics Association, vol. 13(4), pages 668-82, November.
  17. Hotte, Louis, 2001. "Conflicts over property rights and natural-resource exploitation at the frontier," Journal of Development Economics, Elsevier, vol. 66(1), pages 1-21, October.
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Citations

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Cited by:
  1. World Bank, 2004. "Colombia : Land Policy in Transition," World Bank Other Operational Studies 14351, The World Bank.
  2. Jonathan H. Conning & James A. Robinson, 2001. "Land Reform and the Political Organization of Agriculture," Department of Economics Working Papers 2001-10, Department of Economics, Williams College.
  3. Jonathan Conning & James A. Robinson, 2005. "Property Rights and the Political Organization of Agriculture," Hunter College Department of Economics Working Papers 405, Hunter College: Department of Economics.
  4. Juliano Junqueira Assunção & Humberto Moreira, 2005. "Land taxes in a Latin American context," Textos para discussão 497, Department of Economics PUC-Rio (Brazil).
  5. William F. Maloney, 2002. "Missed Opportunities: Innovation and Resource-Based Growth in Latin America," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  6. Assuncao, Juliano, 2006. "Land Reform and Landholdings in Brazil," Working Paper Series RP2006/137, World Institute for Development Economic Research (UNU-WIDER).
  7. Raffaella Castagnini & Klaus Deininger & Maria A. Gonzalez, 2004. "Comparing land reform and land markets in colombia: impacts on equity and efficiency," Policy Research Working Paper Series 3258, The World Bank.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Latifundium in Wikipedia English ne '')
  2. Latifundium in Wikipedia Latin ne '')
  3. Latifundium in Wikipedia Indonesian ne '')
  4. Usor:M0rphzone/Latifundium in Wikipedia Latin ne '')
  5. Латифундија in Wikipedia Macedonian ne '')

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