Carmine Guerriero (Department of Economics, University of Bologna) and Yasir Amin (Alma Mater Studiorum University of Bologna; Erasmus University Rotterdam; University of Hamburg) have posted Climate Shocks and Property Rights to Land on SSRN. Here is the abstract:
While the direct economic effects of adverse climate shocks are well-known, their indirect institutional impact is still unclear. To shed light on this issue, we focus on the most agricultural countries, and we test the idea that adverse climate shocks push elites unable to commit to future transfers to grant the non-elites strong property rights to land to convince them that a sufficient part of the returns on common farming innovations would be shared via public good provision. Consistent with this prediction, data on a panel of 38—among the 42—most agricultural countries observed over the 1960-2018 period imply that the severity of droughts has both the negative and direct effect of reducing agricultural output and the positive and indirect impact of shielding the non-elites’ land from the elites’ expropriation. In turn, reforms towards stronger non-elites’ property rights to land foster the diffusion of contracts strengthening the peasants’ land tenure, encourage the adoption of wheel and crawler tractors and shift the allocation of the tax revenues from military to public health service expenditures. Crucially, these results hold across several identification strategies.
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