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Land Reallocation In Vietnam’S Agrarian Transition, Martin Ravallion, Dominique Van De Walle

Martin Ravallion

Liberalizing key factor markets is a crucial step in the transition from a socialist control-economy to a market economy. However, the process can be stalled by imperfect information, high transaction costs and covert resistance from entrenched interests. The paper studies agricultural land reallocation in the wake of Vietnam’s efforts to establish a free market in land-use rights following de-collectivization. Inefficiencies in the initial administrative allocation are measured against an explicit counterfactual. Land allocation responded positively but slowly to the initial inefficiencies. There is no sign that the transition favored the land rich or that it was thwarted by local officials.