Hostname: page-component-cd9895bd7-dk4vv Total loading time: 0 Render date: 2024-12-23T05:33:09.707Z Has data issue: false hasContentIssue false
  • English
  • Français

A hard row to hoe: farming on the economic frontier under incomplete property rights

Published online by Cambridge University Press:  11 April 2013

Robert C. Tatum
Robert C. Tatum*
Affiliation:
Department of Economics, University of North Carolina at Asheville, CPO 2110, One University Heights, Asheville, NC 28804-8509, USA. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Farmers on the economic frontier often do not have clear titles to their land. Therefore, using an infinite-horizon representative agent model calibrated with data for the Brazilian Amazon, this paper analyzes how improved property rights influence the frontier farmer's investment in the land, as well as the farmer's consumption and debt. Three channels through which property rights affect these variables are identified in the analysis. Two involve the expenditure the farmer incurs to defend the land claim, and the third involves the interest rate premium the farmer faces when borrowing without a clear title to the land. Variants of the model allow for labor to defend the land claim and for endogenous property rights. The findings suggest a need and direction for further, empirical research, particularly with regard to informal institutional arrangements, measures of property rights and the means by which they are defended.

Type
Research Article
Information
Environment and Development Economics , Volume 18 , Issue 5 , October 2013 , pp. 576 - 594
Copyright
Copyright © Cambridge University Press 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abel, A. and Blanchard, O. (1986), ‘The present value of profits and cyclical movements in investment’, Econometrica 54: 249–276.CrossRefGoogle Scholar
Alston, L.J., Libecap, G.D., and Mueller, B. (1999), Title, Conflict, and Land Use: The Development of Property Rights and Land Reform on the Brazilian Amazon Frontier, Ann Arbor, MI: University of Michigan Press.CrossRefGoogle Scholar
Alston, L.J., Libecap, G.D., and Schneider, R. (1995), ‘Property rights and the preconditions for markets: the case of the Amazon frontier’, Journal of Institutional and Theoretical Economics 151(1): 89–107.Google Scholar
Barreto, P., Pinto, A., Brito, B., and Hayashi, S. (2008), Quem é dono da Amazônia? Uma Análise do Recadastramento de Imóveis Rurais, Belém: Imazon.Google Scholar
Besley, T. (1995), ‘Property rights and investment incentives: theory and evidence from Ghana’, Journal of Political Economy 103(5): 903–937.Google Scholar
Bromley, D.W. (2008), ‘Formalising property relations in the developing world: the wrong prescription for the wrong malady’, Land Use Policy 26: 20–27.Google Scholar
Carter, M.R. and Olinto, P. (2003), ‘Getting institutions “right” for whom? Credit constraints and the impact of property rights on the quantity and composition of investment’, American Journal of Agricultural Economics 85(1): 173–186.CrossRefGoogle Scholar
Deininger, K. (2003), Land Policies for Growth and Poverty Reduction, Washington, DC: World Bank.Google Scholar
Deininger, K. and Feder, G. (2009), ‘Land registration, governance, and development: evidence and implications for policy’, World Bank Research Observer 24(2): 233–266.CrossRefGoogle Scholar
Dower, P. and Potamites, E. (2005), ‘Signaling credit-worthiness: land titles, banking practices and access to formal credit in Indonesia’, Paper presented at the American Agricultural Economics Association 2005 Annual Meeting, 24–27 July, Providence, RI.Google Scholar
Ellery, R. Jr. (2002), ‘Notas sobre o investimento’, mimeo, Department of Economics, University of Brasilia.Google Scholar
Ellery, R. Jr., Gomes, V., and Bugarin, M. (2001), ‘Implicações de curto e longo prazo das estimativas do estoque e da renda do capital’, Anais do XXIII Encontro Brasileiro de Econometria, Salvador.Google Scholar
Engle, R. and Foley, D. (1975), ‘An asset pricing model of aggregate investment’, International Economic Review 16: 625–647.Google Scholar
Field, E. (2007), ‘Entitled to work: urban property rights and labor supply in Peru’, Quarterly Journal of Economics 122(4): 1561–1602.CrossRefGoogle Scholar
Galiani, S. and Schargrodsky, E. (2010), ‘Property rights for the poor: effects of land titling’, Journal of Public Economics 94(9–10): 700–729.Google Scholar
Grossman, H. and Kim, M. (1995), ‘Swords or plowshares? A theory of the security of claims to property’, Journal of Political Economy 105(6): 1275–1288.Google Scholar
Hayashi, F. (1982), ‘Tobin's marginal q and average q: a neoclassical interpretation’, Econometrica 50: 213–224.Google Scholar
Issler, J.V. and Piqueira, N.S. (2000), ‘Estimating relative risk aversion, the discount rate, and the intertemporal elasticity of substitution in consumption for Brazil using three types of utility functions’, Brazilian Review of Econometrics 20(2): 201–239.Google Scholar
Rodrigues, A.S.L., Ewers, R.M., Parry, L., Souza, C. Jr., Verissimo, A., and Balmford, A. (2009), ‘Boom-and-bust development patterns across the Amazon deforestation frontier’, Science 324(5933): 1435–1437.Google Scholar
Santos, P.F.P. (2005), ‘Brazil's remarkable journey’, Finance and Development 42(2): 50–52.Google Scholar
Siamwalla, A. (1990), ‘The Thai rural credit system: public subsidies, private information, and segmented markets’, World Bank Economic Review 4(3): 271–295.Google Scholar
Summers, L. (1981), ‘Taxation and corporate investment: a q-theory approach’, Brooking Papers on Economic Activity 1: 67–127.CrossRefGoogle Scholar