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Home > Economics home > Events > Applied/Theory Seminar Series: Jan Grobovsek, Edinburgh University
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Applied/Theory Seminar Series: Jan Grobovsek, Edinburgh University

30/11/2015 (14:00-15:00)

This Weeks Applied/Theory Seminar will be presented by Jan Grobovsek from Edinburgh University. 'Communal Land and Agricultural Productivity' will be presented in H321 at 14:00.

This paper quantifies the aggregate impact of communal land tenure ar- rangements that prevail in Sub-Saharan Africa. Such tenure regimes limit land transfer- ability by prohibiting sales, subjecting rented-out land to the risk of expropriation, and redistributing it to existing farmers in a progressive fashion. We use a general equilibrium two-sector selection model featuring agents heterogeneous in skills to compute the result- ing occupational and operational choices as well as land allocations. The quantification of the model is based on policies deduced from Ethiopia. In the Sub-Saharan African context we find that such policies substantially dampen nominal agricultural relative to non-agricultural productivity, by 25%. Real relative agricultural productivity, however, only falls by 4% since cross-sectoral terms of trade adjust strongly, with excess agricul- tural employment only amounting to some 1.5 percentage points. The loss in GDP is small, about 2%. That serves as a reminder that ostensibly highly distortionary policies need not have substantial bite when individuals strategically adjust to them and equilib- rium prices adapt. For example, the model predicts that at given prices 62% of farmers in an economy such as Ethiopia would leave farming if tenure were secured, casting land insecurity as a major obstacle. Yet only 9% would actually switch sectors after price adjustments are factored in. Read More.


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