Nicolas Sanchez

Common Property Rights as an Endogenous Response to Risk

In recent years, considerable progress has been made in improving our understanding of rural institutions, including property rights (e.g., Binswanger and Rosenzweig). On close inspection property rights often turn out to be multidimensional and complex (Bailey, Migot-Adholla et al.). Despite the widely acknowledged advantages of private property rights regimes, numerous authors have demonstrated the resiliency and surprising pervasiveness of common property rights (Bromley and Chavas, Ciracy-Wantrup and Bishop, Ostrom). Although variations in weather in general, and rainfall in particular, have often been recognized as important sources of production risk and thereby as important determinants of property rights, almost all the attention has been directed to intertemporal variability. Virtually neglected have been the local (spatial) variability of rainfall and hence such important issues as (a) the extent to which the production risks of rural production covary from one local community to another, (b) the behavioral and institutional adaptations to such environmental conditions, and (c) implications for public policy. Several factors would seem to have contributed to the neglect of such issues: (a) In the more heavily studied temperate and relatively humid zones of the world, the local variability of rainfall is relatively small (Huff and Shipp; Hutchison; Jackson; Johnson and Dart; McConkey, Nicholaichuk, and Cutforth); (b) there is a dearth of data from a multiplicity of weather stations in arid r gions; (c) intertemporal variations of rainfall have been of greater interest than interregional ones; and (d) because drought-induced agricultural production shortfalls are generally associated with price increases, price risk tends to offset production risk, thereby lowering the overall importance of weather-related risk for farm incomes. However, there is strong evidence from various arid and semiarid regions (ASARs) of the world that the local variability of rainfall is considerably greater than in the more temperate and humid areas (Thompson and Wilson; Sharon, 1972, 1974, 1979, 1981; Giovinetto, 1972, 1974; Jackson). Such studies also show (a) that studies based on annual rainfall greatly understate the magnitude and impact of such variability over the relevant productive season of the year, (b) that intertemporal and local variability tend to be rather highly correlated, and (c) that in the more arid of ASARs rainfall may be insufficient for agriculture, implying that only animal husbandry might be viable. In such situations, price changes are unlikely to offset production changes. Indeed, in drought conditions, animal herders are often forced to sell off their animals at low and falling prices (distress sales), implying that production and price risk are likely to compound (rather than offset) each other. Therefore, income risk is bound to be considerably more important in the drier ASARs. Moreover, with neither insurance nor credit markets accessible to ASAR residents (for reasons identified by Binswanger and Rosenzweig), the sharp terms of trade deterioration associated with drought often give rise to severe exchange entitlement failure and famine, explaining why herders are especially prominent among those suffering from famine (Sen). Jeffrey Nugent is a professor of economics at the University of Southern California, Los Angeles. Nicolas Sanchez is an associate professor of economics, College of the Holy Cross, Worcester, Massachusetts.

Land Tenure Structures and Fertility in Mexico

The nature of the relationship between land tenure and fertility in an important contemporary setting is examined. Examination of the institutional structure of the Mexican land tenure system reveals some features that could have a positive impact on fertility. The possible pronatalist bias of the system is identified and discussed and the hypothesis that the population in the land reform sector exhibits higher fertility than other comparable populations in Mexico is tested. Tests are performed over 2 data sets using various measures of fertility; results more or less uniformly reject the null hypothesis that the fertility of the land reform sector families does not differ from other families. The empirical evidence strongly suggests that the percentage of ejidatarios (people belonging to an agrarian community that has received and continues to hold land in accordance with the agrarian laws growing out of the Revolution of 1910; this structure embodies several possible pronatalist incentives because of attenuated property rights) in a given population affects both the number of children ever born to women and the stock of children per woman of prime bearing age. While this statistical evidence can be explained by many alternate hypotheses it does support an economic interpretation of the decision to bear children. The constant competition for better land within the ejido together with a desire to secure a legal renter or inheritor for the land may be factors that induce ejidatarios to have larger families than private farmers or paid agricultural workers. It is significant that the very rapid population growth in Mexico has coincided with extensive reallocations of land to the ejidos from the private sector.

Using principal components to produce an economic and social development index: An application to Latin America and the U.S.

This paper presents a principal components methodology for determining the weights for a set of indicators in a composite index of development. The procedure is applied to a 36-variable data set consisting of 1990 data for 19 Latin American countries and corresponding 1960 and 1990 data for the individual U.S. states. This paper compares the results with other well-known indices and uses the combined data set to better understand the level and scope of development in each region and over time. The general results are that the level of development of Latin American countries in 1990 are roughly distributed over the U.S. states in 1960 (though with a larger range), and the structure of development in Latin America is similar to the U.S.

The efficiency of the mesta: A parable

Abstract The Mesta, the Spanish guild of shepherds and sheepowners, has been considered to be an inefficient institution because it helped reverse the trend toward enclosures and gained privileges that allowed it to pay minimal rents for pasturelands. Here, on the other hand, it is argued that because of the conflict between pastoral and agricultural interests and the absence of reliable fences, the decrees of the Spanish monarchs helped, rather than hindered, the allocation of economic resources. To reach this conclusion one has to understand the role that the kings played as zoning authorities allocating resources to the highest valued use. Once allocative zoning procedures were in place, land rents were redundant for allocative purposes and hence could be taxed away without altering efficiency.

Public Enterprise: Retrospective Review and Prospective Theory

Most of the literature on public enterprise seeks to set forth rules to govern their creation and their pricing. This chapter starts by describing the contours of this literature, but gives the bulk of its attention to exploring the potential contributions that public choice theorizing might make to our understanding of the actual conduct of public enterprises, conduct that often varies from what the normative literature prescribes.

The allocation of tariff revenues and optimum trade distortion. With empirical applications to United States sugar policy

ZusammenfassungDie Verteilung von Zolleinnahmen und die optimale Verzerrung des AuΒenhandels. Mit empirischen Anwendungen auf die Zuckerpolitik der Vereinigten Staaten. — Erzeugersubventionen reduzieren die Wohlfahrt, wenn auch weniger als PreisstützungsmaΒnahmen verbunden mit Vorratsbildung. Für normale Güter gilt das Gesetz des komparativen Vorteils, aber Subventionen können die Richtung des AuΒenhandels umkehren. Zölle und Kontingente können die Einnahmen für die Subventionszahlung steigern, obwohl die Verwendung dieser Einkünfte für Transferzahlungen der Subventionierung vorzuzichen wÄre. Die Vereinigten Staaten kontingentieren die Zuckereinfuhr, gestatten aber den Zucker exportierenden LÄndern, die Gewinne zu kassieren und als Zuckererzeugungssubventionen ineffektiv zu verteilen. Die Zucker exportierenden LÄnder haben nicht genügend Informationen, um sagen zu können, wie eine Kontingenterhöhung wirken würde; in diesem Aufsatz wird eine anwendbare Formel für die optimale Quote abgeleitet.RésuméL’allocation des revenus douaniers et la distorsion de l’optimum du commerce. Avec applications empiriques à la politique du sucre des Etats —Unis. Les subventions à la production réduisent la prospérité, mÊme si elles le font moins que les mesures d’appui aux prix, combinées avec la formation de stocks. Pour les biens normaux, la loi de l’avantage comparatif est valable, mais les subventions peuvent renverser la direction du commerce extérieur. Tarifs douaniers et contingents peuvent augmenter les revenus pour les paiements de subventions, bien qu’il soit préférable d’utiliser ces revenus pour les paiements de transferts. Les Etats-Unis contingentent l’importation du sucre, mais permettent aux exporteurs de sucre d’en recueillir les revenus, qu’ils distribuent inefficacement comme subventions à la production de sucre. Toutefois, les exporteurs de sucre n’ont pas les informations pour savoir comment une augmentation du contingent les affecterait, tandis qu’une formule applicable pour un contingentement optimal est ici dérivée.ResumenLa distribution de los ingresos aduaneros y la distorsión del óptimo de comercio exterior. Con aplicaciones empíricas a la política azucarera de los Estados Unidos. — Subvenciones al productor reducen el bienestar, aunque menos que las medidas de apoyo de precios combinadas con la formatión de existencias. Para bienes normales vale la ley de las ventajas comparativas, pero subvenciones pueden invertir la directión de las corrientes de comercio exterior. Aranceles de aduana y contingentes pueden incrementar los ingresos disponibles para el pago de subvenciones, aunque la utilizatión de estos engresos para pagos de transferencias sería preferible. Los Estados Unidos imponen cupos a la importatión de azÚcar, pero permiten a los exportadores extranjeros que realicen los beneficios y los distribuyan sin efecto alguno en forma de subvenciones a la productíon de azÚcar. Los exportadores de azÚcar no disponen de las informaciones necesarias para conocer el impacto de un aumento de la cuota de importatión. En el presente arículo se desarrolla una fórmula operacional para la determinatión de la cuota óptima.RiassuntoLa distribuzione di proventi doganali e la deformazione dell’ottimo di commercio estero. Con applicazioni empiriche alla politica dello zucchero degli Stati Uniti. — Sovvenzioni ai produttori riducono il benessere, ma in misura minore di quanto farebbero provvedimenti a sostegno dei prezzi legati a costituzione di scorte. Per beni normali vale la legge del vantaggio comparativo, ma sovvenzioni possono invertire la direzione del commercio estero. Dazi e contingenti possono accrescere i proventi per il pagamento di sovvenzioni, sebbene l’impiego di queste entrate per pagamenti di trasferimento del sovvenzionamento sia da preferire. Gli Stati Uniti contingentano l’importazione dello zucchero, consentono, perÒ, di incassare i guadagni agli esportatori stranieri che li distribuiscono senza efficacia come sovvenzioni per la produzione dello zucchero. Con ciÒ gli esportatori di zucchero non hanno le informazioni per poter dire come un aumento di contingente potrebbe influenzarli, sebbene una formula applicabile alla quota ottimale sia derivata in questo articolo.