IMF Working Papers

Dimensions of Land Inequality and Economic Development

Author/Editor:

Lennart Erickson ; Dietrich Vollrath

Publication Date:

August 1, 2004

Electronic Access:

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Summary:

There are several theories linking land inequality with aspects of economic development. Empirical work on these theories has attempted to establish a relationship between land inequality and institutions, financial development, and education. This research, though, has relied on measures of land inequality that capture only inequality within the class of landholders, ignoring completely the issue of landlessness. This omission raises suspicion about the usefulness of those empirical results. We use a new measure of the breadth of landholdings across the agricultural population to address this issue. We test the proposed relationships regarding land inequality and development using the new measure. The regressions fail to find significant and robust relationships between land inequality of either type and institutions or financial development. We do find that lower land inequality across agricultural populations, but not inequality within the landholding class, is associated with greater public provision of education.

Series:

Working Paper No. 2004/158

Subject:

Education Financial markets Financial sector development Income distribution Income inequality National accounts Personal income