Working Paper: CEPR ID: DP4410
Authors: Oriana Bandiera; Gilat Levy
Abstract: This Paper analyses an unusually conservative type of redistribution. We take land from the very rich, as usual, but give it to the rich instead of the poor. We show that this type of reform reduces agency costs, thus increasing productivity, total surplus in the economy, and workers? welfare. Compared to the classic redistribution ?to the tiller? it does worse in terms of equity and does not give the poor a collaterizable asset but it is likely to be more sustainable, both economically and politically.
Keywords: inequality; land reforms; moral hazard; redistribution
JEL Codes: D30; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| redistributing land among large landowners (Q15) | reduces agency costs (G34) |
| reduces agency costs (G34) | increases agricultural productivity (Q16) |
| reduces agency costs (G34) | increases total surplus (D69) |
| redistributing land among large landowners (Q15) | increases agricultural productivity (Q16) |
| redistributing land among large landowners (Q15) | increases total surplus (D69) |
| increased competition among landowners (Q15) | increases worker bargaining power (J52) |
| increases worker bargaining power (J52) | leads to higher wages (J31) |
| higher wages (J39) | better incentives for effort (J33) |
| better incentives for effort (J33) | boosts productivity (O49) |
| redistributing land among large landowners (Q15) | higher employment (J68) |
| redistributing land among large landowners (Q15) | increased productivity (O49) |