Condiciones de participación y permanencia del estudiante

Demsetz' classic definition interprets property rights as resulting from the union of the control, transfer and income rights (1967). In a market economy, the presence of transaction costs requires fully defined and enforceable property rights in order to induce individual agents to face, either in their private capacity or collectively, the risks implicit in economic interaction. The opposition of socialism to private ownership of means of production should theoretically have resulted in arrangements where the state was the depository of the virtual totality o f property rights. In the agricultural sector, the extent to which this principle was applied in practice varied widely from country to country- while in Albania private plots were completely eliminated in the wake o f the cultural revolution in 1968 (cfr. Xhamara, 1995), by the early 1980's a substantial margin of freedom had been granted to a number of selected rural organisations in Yugoslavia and Hungary (cfr. Bojnec, 1994; Mathijs, 1997). We mentioned in the previous chapter how in the course of the years, some countries came to rely on private plots to ensure alimentary self-sufficiency (cfr. White, 1990, on Poland; Wolchik, 1991, on Czechoslovakia). The consistently better record of the private sector compared to larger collectives in terms of productivity ensured that, by the early I990's, there was little disagreement as to the necessity to restore full property rights to land and agricultural assets to the private sector.

Controversy arose however as to which type of rural organisation could replace existing ones so as to ensure that property rights were efficiently allocated.

Over the last years, the belief in the natural emergence o f the institutions which underpin Western European and especially North American capitalism has come under increasing criticism by authors highlighting the role historically played by state intervention in the creation of "fi*ee" markets (cfr. Fitoussi, 1990; Gray, 1998). In order to support their contention, these authors point at the experience of former socialist countries, where the end of state planning has not brought about the automatic emergence of a viable economy. The presence of legal guarantees defending individual property rights from the interference o f state authorities has not proved to be sufficient to induce an effective use o f economic assets or the birth of new, viable organisations (cfr. Gavrilescu, 1994, on Romania; Davidova, Buckwell and Konova, 1997, on Bulgaria).

The defenders of the "hands-off' approach (cfr. Brooks, 1991; Csaky/Lerman, 1994) have countered this contention, arguing that in fact the failure o f reform strategy has been due to the indecisiveness o f the political class, which was reluctant to let go o f its privileges and dismantle existing inefficient structures, as well as to the resulting experimentation in some sector with mixed property forms (cfr. Ciulevicienè/Ciulevicius, 1999). In fact, where this approach was followed consistently, as in Eastern Germany and in Hungary, legislators displayed a remarkable degree o f pragmatism as well as o f flexibility, individuating a number of existing organisational practices and adapting them to a changed environment. In general, qualified intervention incorporating insights from local socio-economic history proves to be consistently more successful than earlier transition strategies grounded on considerations of pure efficiency, or, more generally, on marginal analysis (cfr. Harrison-Mayfield/Midmore, 1996), and which therefore underplayed the role of state authorities. Evidence shows that institutional arrangements

favouring economic efficiency, far from being "spontaneous", require a careful nurturing by the surrounding state authorities, whose task is to lay down clear and effective legislative guidelines as well as to make sure that new organisations enable individual economic agents to interact while meeting the demands of efficiency.

In a context of transition, the initial phase of state intervention is the major determinant of the allocation of assets and is going therefore to play a fondamental role in the creation of new property relations. Demsetz (1967) and Gray (1998) agree in saying that theoretically the enforcement o f legislative provisions is not the only way to enforce a particular property rights distribution, as in a number of cultures social customs are so strongly embedded in the texture o f society that they function as a substitute for the law. The destruction of traditional societies by means of collectivisation imply however that an external term of reference is needed in the form o f clear legal dispositions, which alone can permit the later creation of viable organisations.

Whenever any allocation of property is not yet stabilised, the distinction between legal and economic rights acquires renewed importance. Earlier theory emphasised the legal aspect of property rights, claiming that any such right was in fact a concession from the state (cfr. Tiesa, Jan ./Feb. 1991; also references in Informacijos ir leidybos centras, Kooperacija zemès ûkyje- Teisès aktu rinkinys, 1995). Later, Alchian (1965/1977) and Cheung (1983) pointed out that legal rights were neither necessary nor sufficient for the existence o f foil economic rights, consisting in the individual's ability to enjoy, either directly or through exchange, the income flowing from a particular asset. Whenever there is more than one residual claimant to one asset- a typical situation in countries undertaking a comprehensive restructuring of property relations-, economic rights become a function o f each claimant's effort to control his or her ovm share. In such a context, legal rights perform the function to accommodate third party adjudication ahd enforcement (cfr. Barzel, 1989), in whose

absence rules concerning asset usage and exchange are self-enforced and are likely to be sub-optimal.

In the context of agricultural reform, instances abounded where there was more than one claimant to a particular asset. We have already mentioned how a policy of restitution was deemed to result in controversies stemming from muted social as well as territorial conditions. The drafting o f clear and effective legislative guidelines was crucial if one was to avoid prolonged disputes as to the attribution o f particular assets. The importance o f legal rights was also magnified by the fact that, in the absence of documentation proving ownership, the holder of an asset was virtually unable to exert his or her rights to control it (cfr. Navickiené in Lietuvos aidas, 08/03/2000). The claim therefore that property relations shall emerge spontaneously as soon as state authorities withdraw from the economy finds here a clear counter­ argument.

Once property rights are frilly established, however, we have to consider the alternative merits of their distribution. Coase (1960) claimed that, if property rights are well defined and there are no transaction costs, resource allocation is bound to be efficient and independent o f the pattern of ownership. In fact, imperfect information about assets' attributes and potential implies that poorly delineated attributes lie in the public domain, so that, when assets are transferred, resources are spent on their capture. In the context o f rural transition, this phenomenon is particularly frequent when resources are spent on litigation to ensure control over a particular plot of land (cfr. Veidas, 08/12/1999 and 26/02/2000). The informational asymmetry present in most transactions imply that in most cases agents' wishes to maximise the income flowing from a particular asset shall be frustrated by the divergent objectives of their counterparts. To avoid dissipation, it will be often necessary to impose restrictions on the agents involved in tile transaction- as a result, most transfers of economic

property rights are couched in contracts determining the terms of exchange of legal rights.

The theoretical benchmark of the contract as a legal structure is usually taken to be the tenancy contract between the tenant and the landlord (cfr. Cheung, 1983). Of course, as markets and societies become more sophisticated, the degree of complexity of contracts is also bound to increase. In rural societies, contracts often take the form o f lease agreements, which are an example of transfer o f property rights which is limited to a number of attributes. Such agreements have also proved very popular in those CEEC's where sale and purchase of restituted or privatised plots was subject to temporary restrictions. In a lease contract, the actual value of an asset shall not depend exclusively on the flow of income it generates, but is also a function o f the costs incurred while measuring its attributes and supervising its exchange (cfr. Barzel, 1989; Perez-Diaz, 1983).

Policing the transfer of an asset means ensuring that each agent bears responsibility for the asset in question to the extent that he or she can affect the income flowing from it. Once the claimant's share in the residual income is proportional to his or her contribution to the mean income, property rights shall be fully defined- on the other hand, the value o f an asset shall be lowered whenever non-owners are able to affect its income flow without bearing the related cost (cfr. North, 1992,1997; also Agra-Europe, 1993). The implication o f these considerations is that economic rights are perfectly defined- and consequently, assets value is maximised- only under particular property rights distributions.

Whenever two or more agents enter an agreement and decide to merge their assets in order to undertake a long-term investment project, the risks implicitly feced by each agent are analogous to those encountered in the course of a transaction overseeing property exchange (cfr. Ramanauskas, 1993, 1996). Individual farmers

may be unable on their own to control factors likely to affect agricultural production (such as the climate, or the fluctuation in input prices) and may decide to enter into a co-operative agreement with owners of non-uniform productive inputs, so as to ensure higher efficiency. When specialisation is rudimentary, contractual structures shall mainly focus on the prevention of wealth capture fi*om similar agents, while there will be a tendency to personalise exchange. As the scope of activity is widened, custom is replaced by increasingly elaborate codes of conduct providing guidelines for transactions involving the exchange of property rights (cfi'. McFarlane, 1978). Ultimately, exchange tends to become completely de-personalised and subject to contracts enforced by third parties. It is then clear that the function of organisations is to provide a clear and stable definition of the obligations as well as the benefits of all agents involved in elaborate transaction procedures.

The role of state authorities should be that of ultimate guarantor o f the rights of each individual entering into such contract. Legislation should ensure that the incentives faced by each agent are clearly spelled out, taking care that transgressors of the terms of the agreement are subject to clear disciplinary measures. While in some cases co-ordination problems may be solved spontaneously resorting to an informal agreement based on custom (which in this context takes the role of an informal constraint), the formal constraint posed by legislation does in industrialised societies serve as the conventional yardstick to evaluate whether a particular organisational structure serves the purpose of efficiency (cfi". North, 1990,1992). In a context of economic transition, there may be cases where informal and formal constraints are actually in conflict, whereby the solutions chosen may not necessarily be consistent with profit-maximising behavioural norms. However, as social relationships are shaped by the existing organisational arrangements, formal and informal constraints should eventually come to coincide, so that agreements based on custom substantially reflect the demands of legislative provisions.

Oi and Walder (1999) stressed how, at the onset of the transition, some Western observers seemed to consider the choice of a reform strategy as a deductive exercise- an organisational arrangement was selected as optimal and property rights had to be reassigned so as to bring about the emergence of the envisaged structures (cfr. Leontieva, 1997). Such attitude stems from an inadequate understanding o f the nature of transition, which is not implemented in an organisational vacuum, but inherits a set of structures and property rights allocations shaped by the previous system. The intrinsic nature of organisations as expanded contracts devised to supervise the transfer of property rights implies that different allocations of property rights are bound to result in different organisational arrangements (cfr. Williamson, 1985). An accurate analysis of the latter, therefore, ought rather to be an inductive exercise, whose starting point would be the analysis of the initial property rights arrangement inherited from collectivism. Its conclusions should also be qualified by an adequate social and historical appraisal of the context where such organisations operate, as well as by an evaluation o f the underlying legislative guidelines. In this way it could emerge that an organisational arrangement which in other countries would be considered sub-optimal or inherently flawed does in fact reveal itself to be the most adequate response to the distribution of property rights and the pattem of social relationships defining a particular context.

2.1.2 Property rights transfer and structural change within rural