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Insecure Land Rights and Share Tenancy in Madagascar

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  • Bellemare, Marc F.

Abstract

While most studies looking at the consequences of tenurial insecurity on land markets in developing countries focus on the effects of tenurial insecurity on the investment behavior of landowners, this paper studies the hitherto unexplored relationship between tenurial insecurity and contract choice in land tenancy. Based on a distinct feature of the interaction between formal law and customary rights in Madagascar, this paper augments the canonical model of share tenancy by making the strength of the landlord’s property right increasing in the amount of risk she chooses to bear within the contract. Sharecropping may thus emerge as the optimal contract even when the tenant is risk-neutral. Using data on landlords’ subjective perceptions of tenurial insecurity in a rural area of Madagascar, empirical tests strongly support the hypothesis that insecure property rights drive contract choice while offering little support in favor of the canonical hypothesis that risk sharing considerations drive contract choice.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23640.

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Date of creation: 03 Jul 2010
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Handle: RePEc:pra:mprapa:23640

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Keywords: Sharecropping; Property Rights; Tenurial Insecurity; Subjective Expectations;

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References

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Citations

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Cited by:
  1. Ghebru, Hosaena H. & Holden, Stein T., 2012. "Reverse Share-Tenancy and Marshallian Inefficiency: Bargaining Power of Landowners and the Sharecroppers’ Productivity," CLTS Working Papers 2/12, Centre for Land Tenure Studies, Norwegian University of Life Sciences.
  2. Bellemare, Marc F., 2010. "The Productivity Impacts of de Jure and de Facto Land Rights," MPRA Paper 23639, University Library of Munich, Germany.
  3. Bellemare, Marc F., 2009. "The (Im)Possibility of Reverse Share Tenancy," MPRA Paper 23681, University Library of Munich, Germany.
  4. Hagos, Hosaena Gebru & Holden, Stein T., 2013. "Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity," IFPRI discussion papers 1270, International Food Policy Research Institute (IFPRI).
  5. Brown, Zachary S. & Bellemare, Marc F., 2009. "The Structural Estimation of Principal-Agent Models by Least Squares: Evidence from Land Tenancy in Madagascar," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49368, Agricultural and Applied Economics Association.

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