State versus markets in land governance : quantifying and explaining regulation of sales and rental markets in Europe
Johan Swinnena, Kristine Van Hercka & Liesbet Vrankena
There is a large literature on the importance of well-functioning land markets as a key determinant for agricultural development and even broader - its essential role in economic growth and development. In the agricultural sector, land is not only a mean to generate a livelihood but it is also used to accumulate wealth and transfer wealth between generations. In addition, land regulation and exchange affect the emergence and efficiency of financial markets and as a consequence also investments in the agricultural sector are affected by the institutional environment. Land purchases by investors who are less capital-constrained than existing farmers may improve agricultural productivity by increasing land values (e.g. by reducing capital constraints for all farms as higher land values would increase farm valuations and collateralization options), and by horizontal spill-overs (e.g. of technology). Land rental transactions enable those who are more productive but own little or no land, to acquire in a more flexible and inexpensive manner agricultural land, leaving more capital available for productive investments. However, up to now information to compare the performance of rural land institutions is missing.
Event: Annual World Bank Conference on Land and Poverty 2013
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