Land and the transition from a dual to a modern economy

Proto, E. (2007) Land and the transition from a dual to a modern economy. Journal of Development Economics, 83(1), pp. 88-108. (doi:10.1016/j.jdeveco.2005.11.004)

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Abstract

Tenurial contracts in agriculture can be an initial source of wealth accumulation for dynasties of poor, credit-constrained individuals. The income from such contracts can be invested in education of offspring, who then can find work in the formal manufacturing sector. This process allows the economy to develop into a modern economy with a large manufacturing sector. An excessive number of poor individuals competing for scarce land, however, drives up the rental price of land, which then slows the process of accumulation and forces the economy to converge to a less efficient dual equilibrium. In such cases, a policy of land redistribution coupled with a temporary education subsidy may be needed to push the economy to a modern equilibrium.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Proto, Professor Eugenio
Authors: Proto, E.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Development Economics
Publisher:Elsevier
ISSN:0304-3878
ISSN (Online):1872-6089
Published Online:25 January 2006

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