Efficiency and Equity Effects of Land Markets
It is widely believed that land markets, including both land sales and tenancy markets, are neither efficient nor conducive to social equity. It is often argued that tenants, particularly share tenants, do not have proper incentives to work and invest, partly because of the disincentive effects of output sharing and partly because of the tenure insecurity. It is also widely accepted that land sales transactions tend to exacerbate the social equity and rural poverty by facilitating the concentration of land ownership by hands of a few wealthy landlords. Based on these presumptions, land reform programs have been implemented in a number of developing countries. This article critically reviews these presumptions both theoretically and empirically. Firstly, we identify why land tenancy transaction is more common than land sales transactions and why share tenancy is more common than leasehold tenancy. Secondly, we critically review the theories of share tenancy, tenure security, and adjustment costs of farm size. Thirdly, we empirically review the efficiency and equity effects of land markets as well as the impacts of conventional land reform programs. It has become clear from the literature review that land reform polices have generally failed to improve land use efficiency and social equity. It is also found that tenancy contracts, including share tenancy, are generally efficient and conducive to social justice. In conclusion, we propose to encourage tenancy transactions, in general, and share tenancy, in particular.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|This chapter was published in: ||This item is provided by Elsevier in its series Handbook of Agricultural Economics with number
5-51.||Handle:|| RePEc:eee:hagchp:5-51||Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description|
When requesting a correction, please mention this item's handle: RePEc:eee:hagchp:5-51. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.