The Political Economy of Rural Property Rights and the Persistence of the Dual Economy

Leopoldo Fergusson

No 9797, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: If property rights in land are so beneficial, why are they not adopted more widely? I propose a theory based on the idea that limited property rights over peasants' plots may be supported by elite landowners (who depend on peasants for labour) to achieve two goals. First, like other distortions such as taxation, limited property rights reduce peasants' income from their own plots, generating a cheap labour force. Second, and unlike taxation, they force peasants to remain in the rural sector to protect their property, even if job opportunities appear in the urban sector. The theory identifies conditions under which weak property rights institutions emerge, providing a specific mechanism for the endogenous persistence of inefficient rural institutions as development unfolds. It also predicts a non-monotonic relationship between the quality of rural property rights and land in the hands of peasants.

Keywords: Political economy; institutions; economic development; taxation; property rights; land; dualism (search for similar items in EconPapers)
JEL-codes: H2 N10 O1 O10 P16 (search for similar items in EconPapers)
Pages: 44
Date: 2012-06-14
New Economics Papers: this item is included in nep-iue
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The political economy of rural property rights and the persistence of the dual economy (2013)
Working Paper: The Political Economy of Rural Property Rights and the Persistence of the Dual Economy (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:009797

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