Publication: Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam
Abstract
Impact and desirability of land transfers in post-socialist-transition economies have been subject of considerable debate. We use data from Vietnam to identify factors conducive to the development of land markets and to assess potentially differential impacts of rental and sales. Results show that both rental and sales transfer land to more productive producers but that rental is more important for the poor to access land that becomes available as the non-farm economy develops. The fact that secure land rights significantly increase supply of land to the rental market suggests that government has a key role in facilitating emergence and functioning of efficiency-enhancing land markets.
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Publication Land Rental Markets in the Process of Rural Structural Transformation: Productivity and Equity Impacts from China(2009)Although the importance of land rental for overall economic development and development of the non-agricultural economy has long been recognized in theory, empirical evidence on factors that can promote or impede operation of such markets and their productivity and equity impacts, especially in rapidly developing economies with rather equal land endowments, remains limited. A large household level panel is used to illustrate the large contribution of land markets to occupational diversification, productivity of land use, and household welfare. Factors affecting land market participation are derived from a household model with transaction cost and individual ability. Results suggest that, by transferring land from less able and more affluent households who joined the non-farm sector to poorer ones with ample family labor, land markets are critical not only for non-agricultural growth but, by allowing more effective use of potentially idle land can contribute to significant productivity gains. Policy implications are derived.Publication Land Sales and Rental Markets in Transition : Evidence from Rural Vietnam(World Bank, Washington, DC, 2003-04)The extent to which households should be allowed to transfer their land rights in post-socialist transition economies is of considerable policy interest. The authors use data from Vietnam, a transition country that allows rental and sales of land use rights, to identify factors conducive to the development of land markets and to assess the extent to which land transfers enhance productive efficiency and transfer land to the poor. They find that activity in both rental and sales markets has increased rapidly, enhanced by the possession of long-term use rights and off-farm employment, and contributing to greater equity and efficiency of land use. While there is evidence for distress sales by households that experience a shock (death), the scope for such sales is reduced by well-functioning credit markets. Well-defined land rights and appropriate safety nets will thus help transition economies to realize the benefits from the operation of land markets.Publication Efficiency and Equity Impacts of Rural Land Rental Restrictions : Evidence from India(2008)Recognition of the potentially deleterious implications of inequality in opportunity originating in a skewed asset distribution has spawned considerable interest in land reforms. However, little attention has been devoted to the fact that, in the longer-term, the measures used to implement land reforms, especially rental restrictions, could negatively affect productivity. Use of state level data on rental restrictions, together with a nationally representative survey from India suggests that, contrary to original intentions, rental restrictions negatively affect productivity and equity by reducing scope for efficiency-enhancing rental transactions that benefit poor producers. Simulations suggest that, by doubling the number of producers with access to land through rental, from about 15 million currently, liberalization of rental markets could have far-reaching impacts.Publication Determinants and Consequences of Land Sales Market Participation : Panel Evidence from India(2009)Although opinions on impacts of land market transfers are sharply divided, few studies explore welfare- and productivity-impact of land sales markets over a long time horizon and national scale. A panel spanning almost 20 years, together with an indicator of climatic (rainfall) shocks, allows us to assess factors underlying market-mediated land (sale and purchase) transactions and their impact on productivity and equity. Economic growth emerges as a key driver of such markets although shocks, their effect mitigated by bank presence, also increased market activity. Land sales improved productivity and helped purchasers, many of them formerly landless, to accumulate non-land assets and enhance their welfare.Publication Assessing the Functioning of Land Rental Markets in Ethiopia(2008)Although a large theoretical literature discusses the possible inefficiency of sharecropping contracts, empirical evidence on this phenomenon has been ambiguous at best. Household-level fixed-effect estimates from about 8,500 plots operated by households that own and sharecrop land in the Ethiopian highlands provide support for the hypothesis of Marshallian inefficiency. At the same time, a factor adjustment model suggests that the extent to which rental markets allow households to attain their desired operational holding size is limited. Our analysis points toward factor market imperfections (no rental for oxen), lack of alternative employment opportunities, and tenure insecurity as possible reasons underlying such an outcome. They suggest that, rather than worrying only about Marshallian inefficiency, attention to the broader environment and policy framework within which producers can adjust to their optimum operational area will be warranted.
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