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Impact of Land Reform Strategies on Rural Poverty in the Commonwealth of Independent States

Comparison between Georgia and Moldova

Series:

Kerstin Kötschau

This study aimed at analysing the impact of two different land reform strategies on rural poverty in CIS countries, particularly in Georgia and Moldova. While Georgia distributed agricultural land parcels directly to the population at the beginning of the 1990ies, Moldova transferred land via paper shares for undemarcated land parcels. This study is based on household data, which were collected during household surveys in Georgia and Moldova in 2007 and 2008. The data had been used in order to analyse the impact of land reform on the endowment with land and other capital, the use of capital and the access to markets and credits as well as the importance of agricultural employment for rural households. A logit analysis had been run in order to detect the determinants of poverty.

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List of Tables ..................................................................................................... XV List of Figures ................................................................................................. XVII List of Appendices............................................................................................ XIX List of Abbreviations ........................................................................................ XXI 1. Introduction ................................................................................................... 1 1.1 Background and Objective ...................................................................... 1 1.2 Structure of the Thesis ............................................................................ 3 Part I: Rural Transition................................................................................ 5 2. Agrarian Reforms ......................................................................................... 5 2.1 Agriculture in the Soviet Union .............................................................. 5 2.2 Land and Farm Restructuring Reforms ................................................... 6 2.3 Economic Development of the Agricultural Sector .............................. 11 2.4 Rural Poverty during the Transition Period .......................................... 15 2.5 Literature Review .................................................................................. 16 Part II: Conceptual and Theoretical Background ............................. 23 3. Agrarian Institutions and Agrarian Structure......................................... 23 3.1 Definitions ............................................................................................. 23 3.2 Property Rights to Land ........................................................................ 24 3.3 Land Ownership Systems ...................................................................... 28 3.3.1 Private Land Ownership ........................................................... 28 3.3.2 State Land Ownership ............................................................... 29 3.3.3 Group Land Ownership ............................................................ 30 3.4 Systems of Labour Organisation ........................................................... 31 3.5 Agricultural Credit System ................................................................... 32 3.6 Land Markets ........................................................................................ 34 3.7 Agricultural Input and Output Markets ................................................. 38 3.8 Change of Agrarian institutions and Agrarian Structure ...................... 39 3.9 Summary ............................................................................................... 41 4. Economic Causes of Rural Poverty ........................................................... 43 4.1 Poverty .................................................................................................. 43 4.1.1 Definition of Poverty ................................................................ 43 4.1.2 Income versus Consumption Approach .................................... 44 4.1.3 Measuring Poverty .................................................................... 45 4.1.4 Poverty Profiles - Rural versus Urban Poverty ........................ 48 XII Table of Contents 4.2 Determinants of Poverty ....................................................................... 49 4.2.1 Composition of Household Income .......................................... 50 4.2.2 Factor Income ........................................................................... 52 4.2.3 Resource Endowment ............................................................... 52 4.2.4 Resource Use ............................................................................ 54 4.2.5 Net Earnings .............................................................................. 55 4.2.6 Transfer Income ........................................................................ 56 4.2.7 Forced Payments ....................................................................... 56 4.3 Summary ............................................................................................... 57 Part III: Case Study ..................................................................................... 59 5. Study Design ................................................................................................ 59 5.1 Country Selection .................................................................................. 59 5.2 Household Survey ................................................................................. 61 5.2.1 Definition of Households .......................................................... 61 5.2.2 Selection...

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