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The Political Economy of Rural Property Rights and the Persistence of the Dual Economy

  • Fergusson, Leopoldo

If property rights in land are so beneficial, why are they not adopted more widely? I propose a theory based on the idea that limited property rights over peasants' plots may be supported by elite landowners (who depend on peasants for labour) to achieve two goals. First, like other distortions such as taxation, limited property rights reduce peasants' income from their own plots, generating a cheap labour force. Second, and unlike taxation, they force peasants to remain in the rural sector to protect their property, even if job opportunities appear in the urban sector. The theory identifies conditions under which weak property rights institutions emerge, providing a specific mechanism for the endogenous persistence of inefficient rural institutions as development unfolds. It also predicts a non-monotonic relationship between the quality of rural property rights and land in the hands of peasants.

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File URL: http://purl.umn.edu/146455
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Paper provided by Universidad de Los Andes, Economics Department in its series Documentos CEDE Series with number 146455.

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Date of creation: Jun 2012
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Handle: RePEc:ags:ulaedd:146455
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  1. Konstantin Sonin, 2002. "Why the Rich May Favor Poor Protection of Property Rights," William Davidson Institute Working Papers Series 544, William Davidson Institute at the University of Michigan.
  2. Deininger, Klaus & Binswanger, Hans, 1999. "The Evolution of the World Bank's Land Policy: Principles, Experience, and Future Challenges," World Bank Research Observer, World Bank Group, vol. 14(2), pages 247-76, August.
  3. 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.
  4. Benabou, R., 1996. "Inequality and Growth," Working Papers 96-22, C.V. Starr Center for Applied Economics, New York University.
  5. Hans P. Binswanger & Klaus Deininger, 1997. "Explaining Agricultural and Agrarian Policies in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1958-2005, December.
  6. Garcia-Penalosa, Cecilia & Aghion, Philippe & Caroli, Eve, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Economics Papers from University Paris Dauphine 123456789/10091, Paris Dauphine University.
  7. Kongsamut, P. & Rebelo, S. & Xie, D., 1997. "Beyong Balanced Growth," RCER Working Papers 438, University of Rochester - Center for Economic Research (RCER).
  8. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
  9. repec:bla:restud:v:76:y:2009:i:1:p:143-179 is not listed on IDEAS
  10. Timothy Besley & Maitreesh Ghatak, 2009. "Property rights and economic development," LSE Research Online Documents on Economics 25428, London School of Economics and Political Science, LSE Library.
  11. Tasso Adamopoulos, 2008. "Land Inequality and the Transition to Modern Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 257-282, April.
  12. Hornbeck, Richard A., 2010. "Barbed Wire: Property Rights and Agricultural Development," Scholarly Articles 11185832, Harvard University Department of Economics.
  13. Markus Goldstein & Christopher Udry, 2005. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Working Papers 929, Economic Growth Center, Yale University.
  14. Acemoglu, Daron & Zilibotti, Fabrizio, 1998. "Information Accumulation in Development," Seminar Papers 652, Stockholm University, Institute for International Economic Studies.
  15. Daron Acemoglu, 2006. "Modeling Inefficient Institutions," NBER Working Papers 11940, National Bureau of Economic Research, Inc.
  16. Hanan G. Jacoby & Guo Li & Scott Rozelle, 2002. "Hazards of Expropriation: Tenure Insecurity and Investment in Rural China," American Economic Review, American Economic Association, vol. 92(5), pages 1420-1447, December.
  17. Banerjee, Abhijit & Newman, Andrew F, 1998. "Information, the Dual Economy, and Development," Review of Economic Studies, Wiley Blackwell, vol. 65(4), pages 631-53, October.
  18. Binswanger, Hans P. & Deininger, Klaus, 1993. "South African land policy: The legacy of history and current options," World Development, Elsevier, vol. 21(9), pages 1451-1475, September.
  19. 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.
  20. Fenske, James, 2011. "Land tenure and investment incentives: Evidence from West Africa," Journal of Development Economics, Elsevier, vol. 95(2), pages 137-156, July.
  21. Brasselle, Anne-Sophie & Gaspart, Frederic & Platteau, Jean-Philippe, 2002. "Land tenure security and investment incentives: puzzling evidence from Burkina Faso," Journal of Development Economics, Elsevier, vol. 67(2), pages 373-418, April.
  22. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
  23. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, MIT Press, vol. 122(4), pages 1561-1602, November.
  24. Deininger, Klaus & Feder, Gershon, 2001. "Land institutions and land markets," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 6, pages 288-331 Elsevier.
  25. 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.
  26. Antonia Diaz, 2000. "On the Political Economy of Latin American Land Reforms," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(3), pages 551-571, July.
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