Efficiency and Equity Impacts of Rural Land Rental Restrictions: Evidence from India

27 Pages Posted: 17 Jul 2014

See all articles by Klaus Deininger

Klaus Deininger

World Bank - Development Economics Group (DEC); World Bank - Development Research Group (DECRG)

Songqing Jin

Michigan State University

Hari Nagarajan

Institute of Rural Management Anand (IRMA)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2005

Abstract

Recognition of the potentially deleterious implications of inequality in opportunity originating in a skewed asset distribution has spawned considerable interest in land reforms. However, little attention has been devoted to the fact that, in the longer-term, the measures used to implement land reforms, especially rental restrictions, could negatively affect productivity. Use of state level data on rental restrictions, together with a nationally representative survey from India suggests that, contrary to original intentions, rental restrictions negatively affect productivity and equity by reducing scope for efficiency-enhancing rental transactions that benefit poor producers. Simulations suggest that, by doubling the number of producers with access to land through rental, from about 15 million currently, liberalization of rental markets could have far-reaching impacts.

Keywords: India; Land markets; Poverty; Growth

JEL Classification: O12; Q12; Q15

Suggested Citation

Deininger, Klaus and Jin, Songqing and Nagarajan, Hari, Efficiency and Equity Impacts of Rural Land Rental Restrictions: Evidence from India (November 2005). European Economic Review, Vol. 52, 2008, Available at SSRN: https://ssrn.com/abstract=2466857

Klaus Deininger

World Bank - Development Economics Group (DEC) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/kdeininger

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Songqing Jin

Michigan State University ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States

Hari Nagarajan (Contact Author)

Institute of Rural Management Anand (IRMA) ( email )

Anand - 388 001
India

HOME PAGE: http://https://www.irma.ac.in/ifaculty/facultydetails.php?fid=428

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