Resource information
While liberalizing key factor markets is
a crucial step in the transition from a socialist
control-economy to a market economy, the process can be
stalled by imperfect information, high transaction costs,
and covert resistance from entrenched interests. The authors
study land-market adjustment in the wake of Vietnam's
reforms aiming to establish a free market in land-use rights
following de-collectivization. Inefficiencies in the initial
administrative allocation are measured against an explicit
counterfactual market solution. The authors' tests
using a farm-household panel data set spanning the reforms
suggest that land allocation responded positively but slowly
to the inefficiencies of the administrative allocation. They
find no sign that the transition favored the land rich or
that it was thwarted by the continuing power over land held
by local officials.
