Efficiency and Equity Impacts of Rural Land Rental Restrictions: Evidence from India

Download or read book Efficiency and Equity Impacts of Rural Land Rental Restrictions: Evidence from India written by Klaus Deininger and published by World Bank Publications. This book was released on 2007 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recognition of the potentially deleterious implications of inequality in opportunity originating in a skewed asset distribution has spawned considerable interest in land reforms. However, little attention has been devoted to the fact that, in the longer-term, the measures used to implement land reforms, especially rental restrictions, could negatively affect productivity. Use of state level data on rental restrictions, together with a nationally representative survey from India suggests that, contrary to original intentions, rental restrictions negatively affect productivity and equity by reducing scope for efficiency-enhancing rental transactions that benefit poor producers. Simulations suggest that, by doubling the number of producers with access to land through rental, from about 15 million currently, liberalization of rental markets could have far-reaching impacts.