IDEAS home Printed from https://ideas.repec.org/p/auu/hpaper/100.html
   My bibliography  Save this paper

Property Rights to Land and Agricultural Organization: An Argentina-United States Comparison

Author

Listed:
  • Eric Edwards
  • Martin Fiszbein
  • Gary 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.

Suggested Citation

  • Eric Edwards & Martin Fiszbein & Gary Libecap, 2022. "Property Rights to Land and Agricultural Organization: An Argentina-United States Comparison," CEH Discussion Papers 01, Centre for Economic History, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:hpaper:100
    as

    Download full text from publisher

    File URL: https://cbe.anu.edu.au/researchpapers/CEH/WP202201.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Douglas W. Allen & Dean Lueck, 1993. "Transaction Costs and the Design of Cropshare Contracts," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 78-100, Spring.
    2. Yoram Barzel, 1997. "Measurement Cost and the Organization of Markets," Chapters, in: Svetozar Pejovich (ed.), The Economic Foundations of Property Rights, chapter 13, pages 171-192, Edward Elgar Publishing.
    3. Ronald H. Coase, 2008. "The Institutional Structure of Production," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 2, pages 31-39, Springer.
    4. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    5. Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 299-322, National Bureau of Economic Research, Inc.
    6. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    7. David S. Jacks, 2019. "From boom to bust: a typology of real commodity prices in the long run," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 13(2), pages 201-220, May.
    8. Droller, Federico & Fiszbein, Martin, 2021. "Staple Products, Linkages, and Development: Evidence from Argentina," The Journal of Economic History, Cambridge University Press, vol. 81(3), pages 723-762, September.
    9. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    10. Andrew D. Foster & Mark R. Rosenzweig, 2022. "Are There Too Many Farms in the World? Labor Market Transaction Costs, Machine Capacities, and Optimal Farm Size," Journal of Political Economy, University of Chicago Press, vol. 130(3), pages 636-680.
    11. Raghuram G. Rajan & Rodney Ramcharan, 2011. "Land and Credit: A Study of the Political Economy of Banking in the United States in the Early 20th Century," Journal of Finance, American Finance Association, vol. 66(6), pages 1895-1931, December.
    12. Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-386, October.
    13. Abramitzky, Ran & Braggion, Fabio, 2006. "Migration and Human Capital: Self-Selection of Indentured Servants to the Americas," The Journal of Economic History, Cambridge University Press, vol. 66(4), pages 882-905, December.
    14. Filipe Campante & Edward L. Glaeser, 2018. "Yet another tale of two cities: Buenos Aires and Chicago," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 27(1), pages 1-33, December.
    15. Lindert, Peter H. & Williamson, Jeffrey G., 2013. "American Incomes Before and After the Revolution," The Journal of Economic History, Cambridge University Press, vol. 73(3), pages 725-765, September.
    16. James Roumasset & Marilou Uy, 1987. "Agency Costs and the Agricultural Firm," Land Economics, University of Wisconsin Press, vol. 63(3), pages 290-302.
    17. Goldin, Claudia, 1998. "America's Graduation from High School: The Evolution and Spread of Secondary Schooling in the Twentieth Century," The Journal of Economic History, Cambridge University Press, vol. 58(2), pages 345-374, June.
    18. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-498, June.
    19. Go, Sun & Lindert, Peter, 2010. "The Uneven Rise of American Public Schools to 1850," The Journal of Economic History, Cambridge University Press, vol. 70(1), pages 1-26, March.
    20. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    21. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
    22. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    23. Allen, Douglas W., 2011. "The Institutional Revolution," University of Chicago Press Economics Books, University of Chicago Press, number 9780226014746, December.
    24. Facundo Alvaredo & Guillermo Cruces & Leonardo Gasparini, 2018. "A short episodic history of income distribution in Argentina," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 27(1), pages 1-45, December.
    25. Kearl, J.R. & Pope, Clayne L. & Wimmer, Larry T., 1980. "Household Wealth in a Settlement Economy: Utah, 1850–1870," The Journal of Economic History, Cambridge University Press, vol. 40(3), pages 477-496, September.
    26. Stewart, James I., 2009. "Economic Opportunity or Hardship? The Causes of Geographic Mobility on the Agricultural Frontier, 1860–1880," The Journal of Economic History, Cambridge University Press, vol. 69(1), pages 238-268, March.
    27. Libecap, Gary D., 2007. "The Assignment of Property Rights on the Western Frontier: Lessons for Contemporary Environmental and Resource Policy," The Journal of Economic History, Cambridge University Press, vol. 67(2), pages 257-291, June.
    28. Steckel, Richard H., 1989. "Household migration and rural settlement in the United States, 1850-1860," Explorations in Economic History, Elsevier, vol. 26(2), pages 190-218, April.
    29. Cheung, Steven N S, 1983. "The Contractual Nature of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(1), pages 1-21, April.
    30. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 143-179.
    31. Rada, Nicholas E. & Fuglie, Keith O., 2019. "New perspectives on farm size and productivity," Food Policy, Elsevier, vol. 84(C), pages 147-152.
    32. Alston, Lee J. & Ferrie, Joseph P., 2005. "Time on the Ladder: Career Mobility in Agriculture, 1890–1938," The Journal of Economic History, Cambridge University Press, vol. 65(4), pages 1058-1081, December.
    33. Carlos Álvarez-Nogal & Leandro Prados De La Escosura, 2013. "The rise and fall of Spain (1270–1850)," Economic History Review, Economic History Society, vol. 66(1), pages 1-37, February.
    34. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
    35. Roumasset, J., 1995. "The nature of the agricultural firm," Journal of Economic Behavior & Organization, Elsevier, vol. 26(2), pages 161-177, March.
    36. Galenson, David W. & Pope, Clayne L., 1989. "Economic and Geographic Mobility on the Farming Frontier: Evidence from Appanoose County, Iowa, 1850–1870," The Journal of Economic History, Cambridge University Press, vol. 49(3), pages 635-655, September.
    37. Demsetz, Harold, 1988. "The Theory of the Firm Revisited," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 141-161, Spring.
    38. Acemoglu, Daron, 2003. "Why not a political Coase theorem? Social conflict, commitment, and politics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 620-652, December.
    39. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    40. Grubb, Farley, 1986. "Redemptioner Immigration to Pennsylvania: Evidence on Contract Choice and Profitability," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 407-418, June.
    41. Harold Demsetz, 1968. "The Cost of Transacting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(1), pages 33-53.
    42. Gregson, Mary Eschelbach, 1996. "Wealth Accumulation and Distribution in the Midwest in the Late Nineteenth Century," Explorations in Economic History, Elsevier, vol. 33(4), pages 524-538, October.
    43. Gary D. Libecap, 2011. "The Political Economy of Property Rights," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 77(02), pages 52-63.
    44. Robert Evenson & Prabhu Pingali (ed.), 2010. "Handbook of Agricultural Economics," Handbook of Agricultural Economics, Elsevier, edition 1, volume 4, number 1.
    45. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    46. Daniel Oto-Peralías & Diego Romero-Ávila, 2016. "The economic consequences of the Spanish Reconquest: the long-term effects of Medieval conquest and colonization," Journal of Economic Growth, Springer, vol. 21(4), pages 409-464, December.
    47. Gary D. Libecap & Dean Lueck, 2011. "The Demarcation of Land and the Role of Coordinating Property Institutions," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 426-467.
    48. Stanley L. Engerman & Kenneth L. Sokoloff, 1994. "Factor Endowments: Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States," NBER Historical Working Papers 0066, National Bureau of Economic Research, Inc.
    49. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    50. Yoram Barzel, 2004. "Standards and the Form of Agreement," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 1-13, January.
    51. Kanazawa, Mark T., 1996. "Possession is Nine Points of the Law: The Political Economy of Early Public Land Disposal," Explorations in Economic History, Elsevier, vol. 33(2), pages 227-249, April.
    52. Alston, Lee J. & Gallo, Andrés A., 2010. "Electoral fraud, the rise of Peron and demise of checks and balances in Argentina," Explorations in Economic History, Elsevier, vol. 47(2), pages 179-197, April.
    53. North,Douglass C. & Wallis,John Joseph & Weingast,Barry R., 2013. "Violence and Social Orders," Cambridge Books, Cambridge University Press, number 9781107646995.
    54. Eric C. Edwards, 2016. "What Lies Beneath? Aquifer Heterogeneity and the Economics of Groundwater Management," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 453-491.
    55. Kenneth L. Sokoloff & Stanley L. Engerman, 2000. "Institutions, Factor Endowments, and Paths of Development in the New World," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 217-232, Summer.
    56. Feder, Gershon, 1985. "The relation between farm size and farm productivity : The role of family labor, supervision and credit constraints," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 297-313, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bartels, Charlotte & Jäger, Simon & Obergruber, Natalie, 2020. "Long-Term Effects of Equal Sharing: Evidence from Inheritance Rules for Land," IZA Discussion Papers 13665, Institute of Labor Economics (IZA).
    2. Fergusson, Leopoldo & Mejía, Javier & Robinson, James A. & Torres, Santiago, 2023. "Constitutions and Order: A theory and comparative evidence from Colombia and the United States," Documentos CEDE 20815, Universidad de los Andes, Facultad de Economía, CEDE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gary D. Libecap, 2018. "Property Rights to Frontier Land and Minerals: US Exceptionalism," NBER Working Papers 24544, National Bureau of Economic Research, Inc.
    2. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, September.
    3. Beck, T.H.L., 2010. "Legal Institutions and Economic Development," Other publications TiSEM 8aa07b48-ce55-4cf6-8754-7, Tilburg University, School of Economics and Management.
    4. Aldashev, Gani & Zanarone, Giorgio, 2017. "Endogenous enforcement institutions," Journal of Development Economics, Elsevier, vol. 128(C), pages 49-64.
    5. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.
    6. Rok Spruk & Mitja Kovac, 2018. "Inefficient Growth," Review of Economics and Institutions, Università di Perugia, vol. 9(2).
    7. Braunfels, Elias, 2016. "Further Unbundling Institutions," Discussion Paper Series in Economics 13/2016, Norwegian School of Economics, Department of Economics.
    8. Abdoul’ Mijiyawa, 2013. "Determinants of property rights institutions: survey of literature and new evidence," Economics of Governance, Springer, vol. 14(2), pages 127-183, May.
    9. Ibrahim Demir, 2016. "The firm size, farm size, and transaction costs: the case of hazelnut farms in Turkey," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 81-90, January.
    10. ROUGIER Eric, 2015. ""The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development," Cahiers du GREThA (2007-2019) 2015-12, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    11. William Easterly & Ross Levine, 2016. "The European origins of economic development," Journal of Economic Growth, Springer, vol. 21(3), pages 225-257, September.
    12. Aguirre, Alvaro, 2016. "The risk of civil conflicts as a determinant of political institutions," European Journal of Political Economy, Elsevier, vol. 42(C), pages 36-59.
    13. Ezcurra, Roberto & Zuazu, Izaskun, 2019. "Political equality and quality of government," MPRA Paper 96476, University Library of Munich, Germany.
    14. Vahabi,Mehrdad, 2019. "The Political Economy of Predation," Cambridge Books, Cambridge University Press, number 9781107591370.
    15. Natkhov, T. & Polishchuk, L., 2017. "Political Economy of Institutions and Development: The Importance of Being Inclusive. Reflection on "Why Nations Fail" by D. Acemoglu and J. Robinson. Part II. Institutional Change and Impli," Journal of the New Economic Association, New Economic Association, vol. 35(3), pages 12-32.
    16. Peter Lloyd & Cassey Lee, 2016. "A Review of the Recent Literature on the Institutional Economics Analysis of the Long-Run Performance of Nations," Department of Economics - Working Papers Series 2019, The University of Melbourne.
    17. Litina, Anastasia, 2012. "Unfavorable land endowment, cooperation, and reversal of fortune," MPRA Paper 39702, University Library of Munich, Germany.
    18. van Bavel, Bas, 2016. "The Invisible Hand?: How Market Economies have Emerged and Declined Since AD 500," OUP Catalogue, Oxford University Press, number 9780199608133.
    19. Gary D. Libecap & Dean Lueck, 2009. "The Demarcation of Land and the Role of Coordinating Institutions," NBER Working Papers 14942, National Bureau of Economic Research, Inc.
    20. Jean-Louis Combes & Pascale Combes Motel, 2022. "Que nous apprend la littérature récente sur la « nature et les causes de la richesse des nations » ?," Mondes en développement, De Boeck Université, vol. 0(3), pages 289-313.

    More about this item

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:auu:hpaper:100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/chanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.