Critical Masses in the Decollectivisation of Post-Soviet Agriculture
Posted: 11 Aug 2009
Date Written: June 2009
Decollectivisation in post-Soviet agriculture has generally been slow except for islands of complete individualisation. Our model interlinks two types of critical mass phenomena that can explain these outcomes. First, positive network externalities reshape decollectivisation incentives after a sufficient number of reform pioneers shift to private farming. Second, workers have preferences for behaving in conformity with their social reference group. This allows collective farm managers interested in cementing their own power to manipulate reference groups by limiting workers' horizons. We provide empirical support with a threshold regression based on a unique data set of regional reform outcomes in Moldova.
Keywords: agricultural transition, former Soviet Union, social interaction effects, network externality, Moldova, D23, O18, P32, Q15
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