THE IMPORTANCE OF PROPERTY RIGHTS FOR ECONOMIC OUTCOMES: LESSONS FROM THE TRANSFER OF PRODUCTIVE ASSETS FROM COLLECTIVE TO PRIVATE OWNERSHIP IN BULGARIAN AGRICULTURE

Abstract

The design of the agricultural reform in Bulgaria in the early 90-es provides researchers with a natural experiment for testing the effect of the protracted absence of clearly defined property rights on economic outcomes. Special rules governing the restitution of orchards made one group of crops, namely fruits, more susceptible to the negative effects of poorly defined property rights, resulting from delayed land reform. Our empirical analysis shows that the decline in agricultural output was steepest for crops in the fruits group, which we attribute to the differential effect of the property rights vacuum in the early stages of transition.property rights Bulgaria agriculture transition