The Impact of Land Fragmentation on Property Rights in Bulgaria

Abstract

"Property rights exist to secure individual interests when resources are scarce. The problems that may arise with a property system include: changes in formal institutions need time to be adopted by the social actors affected, cultural and social norms can influence patterns of institutional evolution, and a discrepancy may exist between legal rights and rights-in-practice. During the agrarian reform in Bulgaria, farmland was restituted to its pre-collectivization owners. All landowners have obtained their deeds even though land property rights are still absent in practice. One of the reform outcomes was severe fragmentation in terms of land ownership and use. As a result, benefits from farmland are low, and the cost component high.

"The aim of the article is to examine the impact of land fragmentation on private property rights. In order to achieve this aim, I evaluate benefit and cost streams received by ownership, co-ownership, and land use rights. Multiple sources of information were used to analyze land property rights in Bulgaria such as legal framework, data about land fragmentation that was obtained by land administrative offices and the case studies from three study regions with different level of land fragmentation in Bulgaria.

"Findings show that existence of co-ownership decreases the incentive of landowners to exercise their ownership rights; thus, land property rights are currently only partially exercised in practice. To counteract the fragmentation, farmers have started to exchange plots among them. The local co-owners have taken a leading position in land management vis-à-vis co-owners who live far from their mutual property. The state, meanwhile, is attempting to formalize the solutions that have emerged at the local level. Along with a softening of the farmland fragmentation problem, these state changes may lead to concentration of farmland in the hands of powerful actors."