Property rights in land and output growth in Russia

This paper tests whether the implementation of a key market‐oriented reform in post‐Soviet Russia, property rights in land, proxied by the percent of privatized land by region, affected the pace of sub‐national economic growth during two unprecedented expansion periods: 2001–2008 and 2010–2014. Individuals gained the Constitutional right to own land in 1993, but implementation was stalled. The pace of land privatization can be explained by arguably exogenous factors such as distance to Moscow, as well as climate and also regional political culture, proxied by concentration of votes in the 2004 presidential election. We show that this rate of land privatization in Russia's regions was significantly associated with output growth in 2010–2014, confirming the policy importance of this measure for developing economies. Regions where private holdings expanded most rapidly with the enforcement of property rights in land, gained a competitive advantage in the growth process through increased investment in fixed assets and private consumption.     

Property rights for the poor: Effects of land titling

Secure property rights are considered a key determinant of economic development. The evaluation of the causal effects of property rights, however, is a difficult task as their allocation is typically endogenous. To overcome this identification problem, we exploit a natural experiment in the allocation of land titles. In 1981, squatters occupied a piece of land in a poor suburban area of Buenos Aires. In 1984, a law was passed expropriating the former owners' land to entitle the occupants. Some original owners accepted the government compensation, while others disputed the compensation payment in the slow Argentine courts. These different decisions by the former owners generated an exogenous allocation of property rights across squatters. Using data from two surveys performed in 2003 and 2007, we find that entitled families substantially increased housing investment, reduced household size, and enhanced the education of their children relative to the control group. These effects, however, did not take place through improvements in access to credit. Our results suggest that land titling can be an important tool for poverty reduction, albeit not through the shortcut of credit access, but through the slow channel of increased physical and human capital investment, which should help to reduce poverty in future generations.     

Property rights revisited

Over the last 20 years, a large number of papers have tried to quantify the effect of property rights on a wide range of variables like growth, trade and to a lesser extent, inequality. However, these studies have been inherently limited by measures of the security of property rights that are currently available. These suffer from any of a number of shortcomings, ranging from a lack of availability, objectivity, or the fact that they measure a broader concept like the rule of law. This paper tries to address this gap by proposing a new index of property rights. Specifically, we use a state-space model to combine all available indicators tracking the security of property rights into an index that covers 191 countries over the period 1994–2014. We compare it to the existing indicators by revisiting the link between inequality, democracy and property rights, using a panel threshold regression model with fixed-effects. Depending on the measure of property rights that is used, there can be considerable differences in the size, significance and even the sign of the estimated parameters. Specifically, in contrast with existing measures, we find that a strengthening of the security of property rights reduces inequality in highly democratic countries only via the government's redistribution channel.     

Property rights and long-run capital

Proprietary capital falling into the public domain inefficiently decreases capital accumulation. As a consequence, the market steady state consumption underperforms the planner's by 4.6%–9.1% in a neoclassical infinitely-lived agents economy with constant returns to scale and standard empirically supported parameters. The results extend robustly to an overlapping generations economy, for which the gap is 10.5% when similarly parametrized. A policy decentralizing, in the latter, the planner's steady state instead consists of (i) subsidizing the rental rate of private capital at its depreciation rate, and (ii) taxing households' negative net position between, on the one hand, firm and depreciated capital ownership, and on the other, borrowing. Under this policy, the necessary tax rate on households' negative net position is smaller the bigger the absolute value of the latter and, hence, the bigger the corresponding monetary real balances held by households.     

Property rights,entrepreneurship and coordination

The notion of plan coordination enjoys a central place in the analysis of institutions and competitive market processes. The conventional wisdom is that institutions and policies vary in the extent to which they promote competition and how quickly and completely they bring individuals’ plans into closer coordination with one another. Kirzner has provided the most fully elaborated statement on the use of coordination as a positive analytical device for explaining market dynamics and as a normative criterion for evaluating economic policies. We identify the core propositions in his analysis that elucidate how economic coordination depends upon that most fundamental of market institutions – the system of private property rights. We also probe into Kirzner's claims about inherent limitations in our ability to compare the coordinative potential of alternative property rights systems. We unpack the consequences of these core propositions using the economic theory of property rights. We also examine Kirzner's assertion that dynamic competition – including Schumpeterian innovation – is necessarily coordinative in its market effects. We find that his argument rests on the implicit assumption that property rights remain constant during the process of market adjustment. We provide a case study of the advent of commercial aviation as a potential counterexample to his claims.     

Property and Industrial Organization in Communist and Capitalist Nations

Endogenous growth theorists argue that certain equity-enhancing social institutions enhance growth. Despite the centrality of inequality in these approaches, there is no sense in which economic actors exercise power or collective action to create and maintain social norms and rules that are personally advantageous but socially costly. This despite the work of neoclassical economists on rent-seeking, which posits that efforts to claim unearned revenues can pose significant costs for growth. The question of the impact of gender equity on economic growth is an instructive context for understanding these contradictions. Even though gender practices are inherently about the exercise of power, that they have become a feature of the neoclassical growth literature alights on obvious tensions in the neoclassical institutionalist paradigm. By incorporating insights from both the rent-seeking and feminist economics literatures, we will present analternative explanation of why gender hierarchies persist despite their obvious economic costs.     

Property and contract rights in autocracies and democracies

We present and test empirically a new theory of property and contract rights. Any incentive an autocrat has to respect such rights comes from his interest in future tax collections and national income and increases with his planning horizon. We find a compelling empirical relationship between property and contract rights and an autocrat's time in power. In lasting—but not in new—democracies, the same rule of law and individual rights that ensure continued free elections entail extensive property and contract rights. We show that the age of a democratic system is strongly correlated with property and contract rights.     

Property rights protection and access to bank loans

Poor protection of private property has limited the access to bank loans by private enterprises in developing and transition economies. Under those circumstances, private entrepreneurs have resorted to various ways of enhancing the de facto protection of private property. Using a dataset of 3,073 private enterprises in China, this paper empirically investigates the impact of political participation and philanthropic activities – informal substitutes for the lack of formal protection of private property – on the access to bank loans.     

Property rights and investments: An evolutionary approach

When contracts are not enforceable, or property rights are not clearly defined, individuals may lack an incentive to carry out costly investments even when they are socially efficient. Some recent contributions such as Ellingsen and Robles (2002) prove that this problem may be less dramatic than standard economic models would suggest. They propose evolutionary models in which only efficient equilibria can be (stochastically) stable. In this paper we show that these results are not robust with respect to the introduction of individual heterogeneity. When individuals have different cost functions, stochastically stable states may be inefficient, even when they induce a positive (suboptimal) level of investment.     

Property rights,entrepreneurship, and economic development

The Review of Austrian Economics - The disparity in economic progress across nations still confound economists. However, economists know that institutions play a significant role in economic...     

Property rights and the political organization of agriculture

We propose a general equilibrium model where the economic organization of agriculture and the political equilibrium determining the security of property rights are jointly determined. In particular, because the form of organization may affect the probability and distribution of benefits from future property challenges, it may be shaped in anticipation of this impact. Property rights security may then be secured at the expense of economic efficiency. The model provides a framework for understanding why in some contexts land is redistributed primarily via land sales and tenancy markets but via politics and conflict in others. We test some implications of the theory using a five-decade panel dataset that traces changes in the extent of tenancy and tenancy reform across 15 Indian states.     

Security of property rights and transition in land use

Price and yield uncertainty are traditional considerations in agricultural markets and their impact on development. Agricultural producers in transition economies face an additional risk factor – changes in the institutional protection of property rights. This paper illustrates how institutional uncertainty may affect investment, land use, and crop mix patterns. In particular, in the Ukrainian example, the rights of tenants are viewed as uncertain in anticipation of establishment of an open market for sale of agricultural land. Establishment of the land market in Ukraine has been postponed several times over the last 15 years and a significant number of lease contracts are not formalized. A large panel of farm-level data was used to show that a higher share of rented land is associated with a lower share of land used for investment intensive perennial crops controlling for prices and other factors. The difference in response to uncertainty is found to be significant among three crop types: perennials, grains and oil crops. The implication is that the lower level of protection of use rights and uncertainty regarding the future regulation of land sales market lead to under-investments in more capital intensive crops. As a result, tenants deviate from the optimal crop mix, reducing the productivity of tenant farms. Farms under 200 ha are affected most negatively as they are less likely to be able to access the level of legal and political protection enjoyed by large farms.     

Property rights,mobile capital,and comparative advantage

Recent papers show that imperfect property rights to a natural resource – a sector-specific factor–can be a source of comparative advantage. In these models, weaker property rights attract labor–the only mobile factor – to the resource sector, increasing the country's comparative advantage for that sector. If capital in addition to labor is mobile, and if the benefits of capital are non-excludable or if the degree of property rights is endogenous, a deterioration of property rights has ambiguous effects on comparative advantage and on the equilibrium wage/rental ratio.     

Property rights and information flows: a simulation approach

With the growth of the information economy, the proportion of knowledge-intensive goods to total goods is constantly increasing. Lessig (The future of ideas: the fate of the commons in a connected world. Vintage, New York 2001) has argued that IPRs have now become too favourable to existing producers and that their ‘winner-take-all’ characteristics are constraining the creators of tomorrow. In this paper we look at how variations in IPRs regimes might affect the creation and social cost of new knowledge in economic systems. Drawing on a conceptual framework, the Information Space or I-Space to explore how the uncontrollable diffusibility of knowledge relates to its degree of structure, we deploy an agent-based modelling approach to explore the issue of IPRs. We take the ability to control the diffusibility of knowledge as a proxy measure for an ability to establish property rights in such knowledge. Second, we take the rate of obsolescence of knowledge as a proxy measure for the degree of turbulence induced by different regimes of technical change. Then we simulate the quantity and cost to society of new knowledge under different property right regimes.

First Peoples lost: Determining the state of status First Nations mortality in Canada using administrative data

We present the most comprehensive set of estimates to date for status First Nations mortality in Canada. We use administrative data from Indigenous and Northern Affairs Canada to establish a set of stylized facts regarding status First Nations mortality rates. Between 2010 to 2013, the mortality rates of status First Nations men and boys are highest in nearly all age groups of status First Nations considered, with the exception of status girls between the ages of 10 to 14. On reserve, status boys between the ages of 15 to 19 have mortality rates nearly four times that in the general population, while status girls between the ages of 15 to 19 have mortality rates five times that in the general population. We demonstrate substantial regional variation in mortality rates. Finally, we document that there has been no improvement in mortality among status women and girls living on reserve in the last 30 years and relative mortality rates for all status people on reserve has not changed in 40 years.     

Property rights and groundwater management in the High Plains Aquifer

Groundwater is an important natural resource that needs to be managed dynamically. Ideally, institutions governing property rights to the groundwater of low-recharge aquifers should not discourage or disincentivize groundwater users from dynamic management. We develop an empirical model to examine whether agricultural groundwater users faced with prior appropriation property rights to groundwater in western Kansas exhibit dynamic, forward-looking behavior consistent with dynamic management. We find that although farmers are allotted a time-invariant maximum amount of groundwater that they can extract each year, they still behave in a manner consistent with dynamic management. Their groundwater extraction decisions are not significantly affected by the quantity they are authorized to extract, but are instead affected by expected future crop prices, expected future energy prices, and groundwater extraction by neighbors. Our results provide evidence that farmers manage their groundwater resource dynamically, even if their property rights do not necessarily encourage or incentivize them to do so.     

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

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.     

On the transaction values of land use rights in rural China

Land Use Rights (LURs) in China affect farmers’ productivity through investment incentives and the way land is allocated across households. LURs have implication and trade-offs between equity and growth. This paper examines how Chinese farmers might respond if the Chinese government made it legal for farmers to buy or sell LURs. Livelihood choices, labor substitution, market infrastructure, a lack of property right protections, entrepreneurship, bureaucracy, and political will are all influential factors that will determine whether such a program would work. The purpose of this paper is to examine the economics of transaction in LURs, estimate the value at which LURs could transact in equilibrium, and to analyze factors that would affect these price changes. We evaluate farmer’s intention to buy and sell LURs and how much they are willing to pay and receive for LURs.     

当前农地产权与流转制度改革研究

推进农村土地制度改革,有利于加快农民工市民化进程、推进农业规模化专业化现代化发展、提升农村建设水平缩小城乡差距。当前,农村土改过程中还存在诸多问题,必须深化改革,进行制度创新,建立以权属管理和用途管制为核心的现代土地管理制度。具体而言,要加快确权颁证工作,稳步推进土地改革,加强土地流转市场制度建设,探索农村集体建设用地进入市场有效途径,改革完善农村宅基地制度,发展农地金融,实施严格的耕地保护制度。