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Asset Redistribution abolition of intermediaries – if we assume intermediary was receiving sur- plus [ R ( e ( p )) e ( p )] V ( p ) v L then abolition will tend to increase tenants pay- off if he has any bargaining power – expect reduction in poverty – no effect on effort or output unless p was different ex post – rent increases will in- creases agricultural wages as tenants withdraw labor supply to market tenancy reform – drop in p – increase in security of tenure has two effects (i) output falls because for all p < 1 , e ( p ) less than surplus maximizing level (ii) tenants payoff increases (poverty decreases) because for a given effort level the rent of the tenant will tend to increase – reFects increase in bar-
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Unformatted text preview: gaining power – hence expect drop in output and decrease in poverty land reforms – affect how agency problems are solved and hence can there-fore generate both output and distributional effects Conclusions Central Findings – land reform has contributed towards poverty reduc-tion in India. This explains about 1 tenth of the actual poverty reduction in India over the period (around 8 million individuals). The results are robust to a number of concerns and also show up in wage data. Poverty has fallen even though output effects are absent. Development Economics, LSE Summer School 2007 107...
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This note was uploaded on 12/29/2011 for the course ECO 307 taught by Professor Dublin during the Spring '10 term at SUNY Stony Brook.

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