Land Markets and Tenure

Abstract

From the end of the nineteenth century until the 1940s Bulgarian agriculture was characterized mainly by owner-occupied, small-scale, fragmented farms. After 1946 these farms were collectivized until, in 1991, a program for land restitution was implemented with the objective of restoring property to some 1.7 million individual claimants. This complex process is expected to facilitate the re-emergence of a land market, with consequent reallocation of agricultural resources under new systems of tenure. On current evidence, however, trade in agricultural land is being impeded by the absence of secure legal title, high transaction costs of matching buyers with sellers, and problems in assessing land’s real economic worth. Continued uncertainty is expected to make leasing rather than sale characteristic of land transactions for at least the next decade. Transactions recorded to date are frequently on the basis of informal, short-term leases. The government can facilitate the emergence of an efficient land marketing system but cannot, and should not, manage it.