Property Rights and Land Reform

General Issues at Stake The agenda of the property rights discussion gets much more “left-wing” when issues of land rights are at stake Distinction between “use value” and “exchange value”

General Issues at Stake The efficiency case for property rights in land are less strong, in particular in development context Inverse relationship between farm size and land productivity

The history of collectivisation and decollectivisation Revolutionary redistribution initially created small peasant farmers. Output typically increased but with regulated prices market provision does not increase Collectivisation allows better extraction but creates disincentives e.g. in Soviet Union, 20% of agricultural output is produced on the 2% of land remaining private

Decollectivisation Often supporting state infrastructure is removed in the process “Share privatisation” puts manager in charge of large agricultural units leased back by farmers still about 80% of agricultural land is tilled under leasing arrangements decollectivisation resulted in reduction of output and labour productivity

Resistance against Privatization normally small holders are happy to take over land as private property

Resistance against Privatization Kazakhstan in May 2016: Unrest following plans to strengthen property rights in land, in particular lengthen period of lease from 10 to 25 years for companies with up to 50% foreign ownership introduce auction of land to locals facilitate transfer of ownership restrict subletting