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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.

Suggested Citation

  • Bellemare, Marc F., 2010. "Insecure Land Rights and Share Tenancy in Madagascar," MPRA Paper 23640, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:23640
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    File URL: https://mpra.ub.uni-muenchen.de/23640/1/MPRA_paper_23640.pdf
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    References listed on IDEAS

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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 Sharecropper’s Productivity," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126883, International Association of Agricultural Economists.
    2. Delavande, Adeline & Giné, Xavier & McKenzie, David, 2011. "Measuring subjective expectations in developing countries: A critical review and new evidence," Journal of Development Economics, Elsevier, vol. 94(2), pages 151-163, March.
    3. 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.
    4. Bellemare, Marc F., 2010. "The Productivity Impacts of de Jure and de Facto Land Rights," MPRA Paper 23639, University Library of Munich, Germany.
    5. Bellemare, Marc F., 2009. "The (Im)Possibility of Reverse Share Tenancy," MPRA Paper 23681, University Library of Munich, Germany.
    6. 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).

    More about this item

    Keywords

    Sharecropping; Property Rights; Tenurial Insecurity; Subjective Expectations;

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • 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
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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