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Economics of Cost‐Share Leases in Less‐developed Countries
Author(s) -
Adams Dale W,
Rask Norman
Publication year - 1968
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1237630
Subject(s) - inefficiency , cost sharing , economics , variable (mathematics) , business , variable cost , microeconomics , public economics , mathematical analysis , mathematics , political science , law
Economists have long recognized that output‐share leases result in inefficiencies in variable resource use. Cost‐share leases have been suggested as a way of overcoming this inefficiency. Only in rare cases, however, has cost sharing become a part of share leasing in less‐developed countries. It is argued in this article that in less‐developed countries landowners generally make more net income by not adopting cost‐share leases. The societal loss due to output‐share leasing, and several policy alternatives, in addition to cost‐sharing, which might help resolve this inefficiency problem, are discussed.