Do partial land rights increase productivity and investment? evidence from the redistributive land reform in post–world war II Japan.

There are inconclusive findings on the causal effect of land reform and its crucial channels in the development economics literature. One challenge is to separate the channels, through which land rights operate. This study examines the impact of redistributive land reform in post–World War II Japan on agricultural productivity and investments. This reform imposed a ceiling on landholdings, redistributed above‐ceiling farmland from landlords to tenants, and severely restricted the transferability of redistributed farmland. Thus, we can focus on the tenure security effect (not the tradability and pledgeability effects) as one probable channel. Using rice‐farm panel data before and after the reform (i.e., 1947 and 1948), we exploit the variation in the reform implementation across tenants. The land reform had little effect on total factor productivity and investment in the subsequent season. Our results suggest that the security dimension of land rights alone does not increase short‐run agricultural productivity. [ABSTRACT FROM AUTHOR]