Land reform and economic development : case study on Romania

Abstract

Few social arrangements have affected so many people for so long in human history, as the laws and customs governing the ownership and use of land. Taking Romania as a case study, this thesis focuses on the institutional changes that accompany land reform (e.g., property rights, market services, rural financial services) and the role the state plays in the implementation process. The main hypothesis is that in developing countries, unsatisfactory forms of agrarian structure, and in particular the systems of land tenure, tend in a variety of ways to impede economic development. The results of this study illustrate that in Romania improper implementation of land reform had negative effects on development - further deterioration in the standard of living for the rural population, decline in real productivity, and lower production. Hence, one main conclusion is that the distribution of property rights in land is a necessary but not a sufficient condition for creating the basis for development. Redistribution of property rights in land has to be complemented with technical advice and more integrated cross-sector policies such as easy access to credit and agricultural inputs, production and social infrastructure. State involvement is crucial for supporting these services.