Property Rights Imperfections, Asset Allocation and Welfare: Co-ownership in Bulgaria

Liesbet Vranken, Karen Macours, Nivelin Noev and Johan Swinnen
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Liesbet Vranken: LICOS Center for Institutions and Economic Performance - KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven, Department of Earth and Environmental Sciences [Leuven-Heverlee] - KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven
Nivelin Noev: European Commission - European Commission [Brussels]

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Abstract: 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.

Keywords: Property rights; Asset allocation; Land markets (search for similar items in EconPapers)
Date: 2011-06
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Citations: View citations in EconPapers (5)

Published in Journal of Comparative Economics, 2011, 39 (2), pp.159-175. ⟨10.1016/j.jce.2010.12.003⟩

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Related works:
Working Paper: Property Rights Imperfections, Asset Allocation and Welfare: Co-ownership in Bulgaria (2011)
Working Paper: Property Rights Imperfections, Asset Allocation, and Welfare: Co-Ownership in Bulgaria (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-00754535

DOI: 10.1016/j.jce.2010.12.003

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