Small Farms, Large Transaction Costs: Incomplete Property Rights and Structural Change in Haiti

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Many developing countries are stuck in small, low-productivity farms. Such countries also have poor property rights institutions, which create transaction costs towards reallocating land to large farms. I look at how transaction costs from historical property rights institutions affected the agricultural structure of Haiti, the poorest country in the Western Hemisphere. Using new data on farms created in Haiti from 1928 to 1950, I find transaction costs prevented farmers from starting large farms. Furthermore, transaction costs stopped Haiti from developing plantations in response to a labor supply shock caused by the Trujillo Massacre in the Dominican Republic.



The Haitian Rice Tariff

Poverty is rampant in Haiti. In 2000 three-fourths of the population lived on less than the equivalent of two US dollars per day and half on less than one dollar. Ten years later, in the middle of this poverty, the earthquake struck. Poverty is no newcomer to Haiti. It has been a steady companion for the last half-century or even century. Low incomes have forced Haitians to leave their country to an increasing extent.

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Toward farm-based policy analysis: concepts applied in Haiti

Many policies – on the delivery of inputs or on marketing systems, credit, or extension – influence the potential utilization of new technologies. Through ‘farm-based policy analysis’ it is possible to use data generated in on-farm research (OFR) to identify policy constraints to the use of new technologies, and to effectively communicate that information to policy makers.

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