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Property rights imperfections and asset allocation: Co-ownership in Bulgaria

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  • Vranken, Liesbet
  • Macours, Karen
  • Noev, Nivelin
  • Swinnen, Johan

Abstract

This paper analyzes how imperfections of property rights affect households' allocation of assets using micro-survey data from Bulgaria. Co-ownership of assets is widespread in many countries due to inheritance. Central and Eastern Europe offers an interesting natural experiment to assess the effects of this type of property rights imperfection because of the asset restitution process in the 1990s. In Bulgaria, where co-ownership is very prominent and land is strongly fragmented, the land reform and inheritance legislation allows identifying the impact of co-ownership by taking advantage of a discontinuity created by a minimum plot size law. We find that land in co-ownership is more likely to be used by less efficient farm organizations or to be left abandoned, and that it is related to significant welfare losses. The paper hence provides evidence of sub-optimal land allocation following a privatization that established formal but imperfect property rights.

Suggested Citation

  • Vranken, Liesbet & Macours, Karen & Noev, Nivelin & Swinnen, Johan, 2011. "Property rights imperfections and asset allocation: Co-ownership in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 159-175, June.
  • Handle: RePEc:eee:jcecon:v:39:y:2011:i:2:p:159-175
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    Cited by:

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    3. Jérémie GIGNOUX & Karen MACOURS & Liam WREN-LEWIS, 2015. "Impact of land administration programs on agricultural productivity and rural development: existing evidence, challenges and new approaches," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(3), pages 467-498.
    4. Ricker-Gilbert, Jacob & Lunduka, Rodney W. & Kanyamuka, Joseph Samuel & Jumbe, Charles & Kaiyatsa, Stevier & Chamberlin, Jordan, 2017. "Do Farm Land Rental Markets Really Promote Efficiency, Equity and Investment in Smallholder African Agriculture? Evidence from a Matched Tenant-Landlord Survey in Malawi," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258391, Agricultural and Applied Economics Association.
    5. Macours, Karen, 2014. "Ethnic divisions, contract choice, and search costs in the Guatemalan land rental market," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 1-18.
    6. Ivan Takáč & Jarmila Lazíková & Ľubica Rumanovská & Anna Bandlerová & Zuzana Lazíková, 2020. "The Factors Affecting Farmland Rental Prices in Slovakia," Land, MDPI, vol. 9(3), pages 1-18, March.
    7. Suresh Chaudhary & Yukuan Wang & Amod Mani Dixit & Narendra Raj Khanal & Pei Xu & Bin Fu & Kun Yan & Qin Liu & Yafeng Lu & Ming Li, 2020. "A Synopsis of Farmland Abandonment and Its Driving Factors in Nepal," Land, MDPI, vol. 9(3), pages 1-22, March.
    8. Johan Swinnen, & Kristine Van Herck & Liesbet Vranken, 2014. "The Diversity of Land Institutions in Europe," LICOS Discussion Papers 35514, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

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