Robin Hood's Compromise: Land Reforms, Inequality, Redistribution and Moral Hazard

30 Pages Posted: 29 Jun 2004

See all articles by Oriana Bandiera

Oriana Bandiera

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Gilat Levy

London School of Economics & Political Science (LSE) - Department of Economics

Date Written: June 2004

Abstract

This Paper analyses an unusually conservative type of redistribution. We take land from the very rich, as usual, but give it to the rich instead of the poor. We show that this type of reform reduces agency costs, thus, increasing productivity, total surplus in the economy, and workers' welfare. Compared to the classic redistribution 'to the tiller', it does worse in terms of equity and does not give the poor a collaterizable asset, but it is likely to be more sustainable, both economically and politically.

Keywords: Land reforms, inequality, redistribution, moral hazard

JEL Classification: D30, D82

Suggested Citation

Bandiera, Oriana and Levy, Gilat, Robin Hood's Compromise: Land Reforms, Inequality, Redistribution and Moral Hazard (June 2004). CEPR Discussion Paper No. 4410. Available at SSRN: https://ssrn.com/abstract=560325

Oriana Bandiera (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7519 (Phone)
+44 20 7055 6951 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Gilat Levy

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 6652 (Phone)

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