Working Paper: NBER ID: w27750
Authors: Eric C. Edwards; Martin Fiszbein; Gary D. Libecap
Abstract: The contributions of Harold Demsetz offer key insights on how property rights and transaction costs shape economic organization. This guides our comparison of agricultural organization in two comparable regions, the Argentine Pampas and the US Midwest. In the US, land was distributed in small parcels and actively traded. In the Pampas, land was distributed in large plots and trade was limited because land was a social and political asset as well as commercial. We analyze why this led to persistently larger farms, specialization in ranching, and peculiar tenancy contracts in Argentina, relative to the US. Our empirical analysis, based on county-level data for both regions, shows that geo-climatic factors cannot explain the observed differences in agricultural organization. We discuss implications for long-term economic development in Argentina.
Keywords: property rights; agricultural organization; Argentina; United States; transaction costs
JEL Codes: K11; L1; L22; N2; N21; N22; N26; N5; N51; N52; N56; O13; Q12; Q15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| property rights regimes (P14) | agricultural organization (Q13) |
| large landholdings in Argentina (Q15) | larger average farm sizes in Argentina (Q15) |
| social and political status associated with land ownership (P26) | partitioning estates into smaller farms (Q15) |
| cash tenancy contracts in Argentina (K12) | agricultural organization (Q13) |
| share tenancy contracts in the US (R21) | agricultural organization (Q13) |