Series editors' preface 1. Contracting for property rights 2. Analytical framework 3. Contracting for mineral rights 4. Contracting for changes in federal land policies 5. Contracting in fisheries 6. Contracting for the utilization of oil fields 7. Concluding remarks References Index.

Contracting for Property Rights

Most work on the relationship between farm size and productivity strongly suggests that farms that rely mostly on family labor are more productive than large farms operated primarily by hired labor. This study began as an inquiry into how rental and sales markets for agricultural land in the developing world affect efficiency and equity. What emerged was the clear sense that great variations in land relations around the world and over time cannot be understood in the common paradigm of property rights and competitive markets. Under that paradigm, land scarcity leads to better definition of rights, which are then traded in sales and rental markets accessible equally to all players. The outcome should be the allocation of land to the most efficient uses and users, yet this rarely happens. Instead, land rights and ownership tend to grow out of power relationships. Landowning groups have used coercion and distortions in land, labor, credit, and commodity markets to extract economic rents from the land, from peasants and workers, and most recently from urban consumer groups or taxpayers. Such rent-seeking activities reduce the efficiency of resource use, retard growth, and increase the poverty of the rural population. The authors examine how these power relations emerged and what legal means enabled relatively few landowners to accumulate and hold on to large landholdings. The authors discuss the successes and failures of reform in market and socialist economies, and the perversions of reforms in both systems, manifested in large commercial farms and collectives. They survey the history of land relations and the legacies that history leaves. They discuss the three analytical controversies surrounding economies of scale, and the efficiency of the land sales and land rental market. They discuss the main policy issues and implications of various distortions and successful and unsuccessful reforms in the developing world, including land registration and titling, land taxation, regulations restricting land sales and rentals, fragmentation and consolidation of land, redistributive land reform, and decollectivization. In an epilogue on methodology, the authors examine how various strands of economic theory have contributed, or failed to contribute, to the explanation of variations in policies, distortions, and land relations over space and time.

Power, distortions, revolt, and reform in agricultural land relations

This article explores the nature of property rights systems, their evolution, and their effect on resource allocation. It is argued that certain institutional arrangements for land rights have evolved in order to reduce uncertainty and increase efficiency in credit as well as in land markets. Of particular relevance to developing countries, the article emphasizes the contribution of public sector infrastructure to effective land rights systems. An appendix to the article presents a formal model analyzing the effects of security of land rights on land prices, the intensity of cultivation, and the use of credit. Empirical evidence from Thailand supports several of the propositions derived from the model.

https://learning.uonbi.ac.ke/courses/GPR203_001/document/Property_Law_GPR216-September,_2014/Articles/land_tenure_and_property_rights.pdf

Land tenure and property rights : theory and implications for development policy

This paper uses household data from Northeast China to examine the link between investment and land tenure insecurity induced by China’s system of village-level land reallocation. We quantify expropriation risk using a hazard analysis of individual plot tenures and incorporate the predicted “hazards of expropriation” into an empirical analysis of plot-level investment. Our focus is on organic fertilizer use, which has long lasting benefits for soil quality. Although we find that higher expropriation risk significantly reduces application of organic fertilizer, a welfare analysis shows that guaranteeing land tenure in this part of China would yield only minimal efficiency gains.

/pdf/hazards-of-expropriation-tenure-insecurity-and-investment-in-rw40kgs7af.pdf

Hazards of Expropriation: Tenure Insecurity and Investment in Rural China

This paper provides new empirical results regarding the demand and supply of title, its impact on land value, and its effects on agricultural investment on Brazilian frontiers. We use survey data from 1992 and 1993 from the state of Par with data on the characteristics of the settlers, land tenure, land agencies involved, land values, and investment. We then turn to census data from the Brazilian agricultural census from 1940 through 1985, with observations at the municipio (county) level to examine the development of property rights to land in the southern state of Paran during the agricultural boom between 1940 and 1970 and in the Amazon state of Par during the period of rapid migration to the region after 1970. By examining frontiers we can follow the rise in land values, the increase in the demand for title, and the response of government. The empirical findings support the predictions of the theory regarding the effects of title and investment on land value, the role of expected change in value on demand for title, and the contribution of title in promoting investment. Governments, however, have not exactly followed the predictions of the analytical framework in supplying title. Political and bureaucratic factors play an important role in the government response to demands for title. This result suggests that researchers must pay special attention to the complex political process by which property rights are assigned in studying the emergence of tenure institutions.

The Determinants and Impact of Property Rights: Land Titles on the Brazilian Frontier

The article discusses the impact of land ownership security on farm investment and land improvements. Ownership security enhances capital formation by providing better incentives and improved access to credit. Data from three provinces in Thailand are used to support theoretical propositions and estimate the impact of ownership security. Econometric analysis shows that in two provinces, ownership security induces significantly higher capital/land ratios. In a third province, with a well-developed, informal credit market, ownership security is less important and the impact on capital formation is less significant. Land-improving investments are shown to be significantly affected by ownership security.

Land Ownership Security and Farm Investment in Thailand

Illegal or unregistered occupation and utilization of public lands characterize the practice of large numbers of farmers in many less-developed countries Economic theory suggests that, because squatters lack secure land ownership, they will have fewer investment incentives than farmers with secure ownership Further, because squatters cannot legally use the land as loan collateral, their access to institutional credit, especially medium- and long-term credit, is inhibited This has negative effects on squatters' ability to invest Squatters also face short-term institutional credit constraints, implying a low use of variable inputs Consequently, theory suggests that squatters' land is less productive than titled land1 One policy frequently adopted with the intention of increasing squatters' productivity is the granting of usufruct rights or similar nontradable entitlements Such policies are viewed by many policymakers as adequate alternatives to the provision of full, unrestricted ownership Empirical studies of these issues are scant, and no quantitative assessments of the impact of policy measures addressing squatters have been reported This article presents the results of a quantitative research focusing on Thailand as a case study In Thailand, an estimated 53 million hectares, or about one-fifth of the land officially designated as state-owned forest reserve, is under permanent occupation and cultivation by squatters This is about 21% of the land under cultivation and involves about 1 million farm households Much of the encroached area is suitable for permanent agricultural cultivation, and its continued exploitation poses no substantial environmental risks

Land Policies and Farm Performance in Thailand's Forest Reserve Areas*

Collateral, guaranties and rural credit in developing countries: evidence from Asia

https://www.kuojs.lib.ku.ac.th/index.php/jems/article/download/2671/1237

CAPITALISM WITHOUT CAPITAL: The Rise of the Intangible Economy

This article assesses the impact of the East Asian financial crisis on farm households in two of the region’s most affected countries, Indonesia and Thailand, using detailed householdlevel survey data collected before and after the crisis began. Although the nature of the shocks in the two countries were similar, the impact on farmers’ income (particularly on distribution) was quite different. In Thailand, poor farmers bore the brunt of the crisis, in part because of their greater reliance on the urban economy, than did poor farmers in Indonesia. Urban-rural links are much weaker in Indonesia. Farmers in both countries, particularly those specializing in export crops, benefited from the currency devaluation. Although there is some evidence that the productivity of the smallest landholders declined over the period in question, it is difficult to attribute this directly to the financial crisis. At least in Thailand, a rural credit crunch does not seem to have materialized. Now that the East Asian financial crisis has waned, its impact on two of the region’s most affected countries, Indonesia and Thailand, can be more readily assessed. Agriculture is the major employer in these economies, yet little is known about how farm households weathered the crisis. Hyperbolic news reports notwithstanding, many farmers surely benefited from the exchange rate depreciation. Other effects of the crisis, however, may not have been so sanguine. Overall, one would expect considerable variation in the impact of the crisis within the rural sector. Of particular interest to policymakers, given the implications for the design of safety net programs and balanced rural development, is how the rural poor fared relative to better-off households. This article uses detailed household survey data from Indonesia and Thailand collected before and after the onset of the 1997 financial crisis to explore its effect on farm production and income, especially its differential impact on the poor.

/pdf/weathering-the-storm-the-impact-of-the-east-asian-crisis-on-18kdiugple.pdf

Tongroj Onchan

Papers

Land Ownership Security and Farm Investment in Thailand

Land Policies and Farm Performance in Thailand's Forest Reserve Areas*

Collateral, guaranties and rural credit in developing countries: evidence from Asia

CAPITALISM WITHOUT CAPITAL: The Rise of the Intangible Economy

Weathering the Storm: The Impact of the East Asian Crisis on Farm Households in Indonesia and Thailand