Land reform, income redistribution, and agricultural production in Korea

The effect of agricultural land reform on the Korean economy was tremendous. While most of the previous studies have focused on the changes in land ownership, they ignored the economic cause of land reform and its effects on income redistribution and rice production. This article addresses those issues as well as the political and economic causes of land reform. We emphasize that high transaction costs between landlords and tenants eventually broke down the tenancy system. Also, land reform redistributed income mainly from landlords to tenants and, on a smaller scale, to the government and the general public. This is consistent with the intuition of the median voter theorem. In addition, the abolition of the tenancy system increased agricultural production, which supports the notion of the Marshallian productive inefficiency theory of sharecropping. It also made a contribution to stabilizing the political environment, thus positively affecting future economic growth.