Does sharecropping affect productivity and long-term investment ? evidence from West Bengal's tenancy reforms

Klaus Deininger, Songqing Jin and Vandana Yadav

No 6293, Policy Research Working Paper Series from The World Bank

Abstract: Although transfer of agricultural land ownership through land reform had positive impacts on productivity, investment, and political empowerment in many cases, institutional arrangements in West Bengal -- which made tenancy heritable and imposed a prohibition on subleasing -- imply that early land reform benefits may not be sustained and gains from this policy remain well below potential. Data from a listing of 96,000 households in 200 villages, complemented by a detailed survey of 1,800 owner-cum tenants, point toward binding policy constraints and large contemporaneous inefficiency of share tenancy that is exacerbated by strong disincentives to investment. A conservative estimate puts the efficiency losses from such arrangements in any period at 25 percent.

Keywords: Political Economy; Labor Policies; Economic Theory&Research; Debt Markets; Municipal Housing and Land (search for similar items in EconPapers)
Date: 2012-12-01
New Economics Papers: this item is included in nep-agr and nep-eff
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