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Latifundia Revisited. Market Power, Land Inequality and Efficiency in Interwar Italian Agriculture

Author

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  • Pablo Martinelli

    () (HEC Department, European University Institute)

Abstract

This paper explores a simple though neglected mechanism linking land inequality and inefficiency: market power. In underdeveloped economies with serious constraints on labour mobility, high ownership concentration will endow landowners with market power in local labour markets. The resulting equilibrium explains many of the often criticised features of pre-war Italian latifundia, without the need to factor in irrational behaviour (the preferred explanation of Italian traditional historians) or social institutions and capital market imperfections (explanations advanced by economists in different contexts). According to the model here explored the main effects of inequality are of a distributive rather than of a productive nature. The market power hypothesis is strongly supported by the available quantitative evidence provided by an unexploited dataset on all local labour markets of Italy at the end of the 1930s.

Suggested Citation

  • Pablo Martinelli, 2012. "Latifundia Revisited. Market Power, Land Inequality and Efficiency in Interwar Italian Agriculture," Working Papers 0020, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0020
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    File URL: http://ehes.org/EHES_No20.pdf
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    Cited by:

    1. Jean-Paul Faguet & Fabio Sánchez & Marta-Juanita Villaveces, 2015. "Land Reform, Latifundia and Social Development at Local Level in Colombia, 1961-2010," DOCUMENTOS DE TRABAJO 012503, UNIVERSIDAD DEL ROSARIO.

    More about this item

    Keywords

    Monopsony; Agricultural labour markets; Land distribution; Inequality; Italy;

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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