Land inequality and rural structural transformation: the role of frictions in land and credit markets
Examines the role of land market and financial frictions, and their interactions on rural landholders.
Abstract
The author examine the role of land market frictions, financial frictions, and their interaction in limiting the ability of rural landholders to engage in higher productivity irrigated agriculture and non-agricultural entrepreneurship that enable structural transformation. The paper provide evidence that the distribution of land ownership can systematically determine which localities can productively cultivate land and utilise wealth generated thus for financing non-agricultural enterprises in the long run.
This is an part of the Structural Transformation and Economic Growth (STEG) programme.
Citation
Lu, F ‘Land inequality and rural structural transformation: the role of frictions in land and credit markets’ STEG Project Policy Brief, 2025