Institutional Inertia: Persistent Inefficient Institutions in Spain

José-Antonio Espín-Sánchez

The Journal of Economic History, 2017, vol. 77, issue 3, 692-723

Abstract: In 1966, after more than 700 years, the irrigation community in Mula (Spain) switched from auctions to quotas to allocate water from its river. This change happened in the absence of either political or technological change. Quotas were more efficient, but required that farmers own water property rights. I develop a model in which poor farmers cannot credibly commit to purchase water rights. I show that empirical evidence on savings and prices is consistent with this interpretation. A temporary increase in output prices in the 1950s and better financial institutions allowed farmers to accumulate savings and solve the commitment problem. “There is nothing more difficult to arrange, more doubtful of success, and more dangerous to carry through, than to initiate a new order of things.” Niccolò Machiavelli, The Prince

Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Working Paper: Institutional Inertia: Persistent Inefficient Institutions in Spain (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jechis:v:77:y:2017:i:03:p:692-723_00

Access Statistics for this article

More articles in The Journal of Economic History from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().