Collaborator: Sebastian Sardon, Ph.D. Candidate, Economics, Northwestern University
A central question in economics is whether redistributive policies give rise to equity-efficiency trade-offs. Murillo and Sardon study the Peruvian land reform of 1969, one of the most radical redistribution episodes in 20th century Latin America. Approximately half of all private land was redistributed from wealthy landowners to peasants. This was done through communal ownership schemes, rather than individual smallholder farms, in an attempt to preserve economies of scale. Their project focuses on the reform’s effect on agricultural productivity and potential mechanisms. First, they use a differences-in-differences strategy leveraging cross-regional variation in reform intensity. They then complemented this with a geographical RDD. Their preliminary findings suggest that the reform increased the proportion of land under communal ownership, and did not affect farm size nor harmed productivity, indicating its success in preserving scale economies. These results are consistent with the view that the reform achieved redistribution without harming productivity. In ongoing work, Murillo and Sardon test whether this can be attributed to the communal ownership schemes preserving scale and measure the reform’s effects on living standards. Moreover using census information on occupation, they test whether the reform caused structural transformation by shifting people to or away from the agricultural sector.
