An Explanation Of Land Reform Choices In Central And Eastern Europe

In all Central and East European countries (CEECs) land reform was a key part of the overall agrarian reforms. Various land reform procedures have been chosen and the selected procedures were not the most efficient ones in several cases. The efficiency and distributional impacts depend on the privatization and land reform process. The paper therefore explains the choice of the land reform processes by analyzing their efficiency and distributional effects -- and how they differ between CEECs. It starts with an overview of the post-1989 land reforms in CEECs. The second section discusses the most efficient reform processes and compares these with the effectively chosen processes, identifying in which cases governments clearly have not chosen efficient land reforms. The third part indicates several key factors which have constrained CEEC governments in their choice of the land reform procedures and which have caused the choice of inefficient land reform process. Key factors are the history of the land ownership, including the postcollectivization ownership status, the ethnicity of precollectivization owners, and the equality of precollectivization asset distribution. These factors affect the distributional implications of the land reform, the (potential) conflict between efficiency, equity historical justice, and thus the political economy equilibrium. The last sections discuss two important issues in the CEEC land reforms: compensation of those who do not benefit from the reforms and the impact on effective property rights.