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Land Reforms in the Presence of Monitoring Costs and International Trade
Author(s) -
Chau Nancy H.
Publication year - 1998
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00126
Subject(s) - ceteris paribus , economics , redistribution (election) , transaction cost , commodity , agrarian society , agriculture , production (economics) , distribution (mathematics) , comparative advantage , factors of production , international economics , international trade , macroeconomics , microeconomics , market economy , ecology , politics , political science , law , biology , mathematical analysis , mathematics
This paper elucidates the implications of transaction costs in agrarian labor hiring activities in a two‐sector model of international trade and identifies a link between the size distribution of land and intersectoral allocation of productive inputs. Ceteris paribus , a more unequal distribution of land increases the amount of outmigration from agriculture, a shrinkage of the production possibility set, and a decrease (increase) in the volume of trade if and only if agriculture is the exportable (importable) sector. In addition, nonintervention in factor and commodity markets is constrained optimal only when land redistribution is not a feasible policy option.