• Korean Journal of Agricultural Science
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• v.12 no.2
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• pp.333-340
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• 1985

In this paper, we discuss the role of allocative efficiency and X-efficiency in determining resource allocation under the share tenency. Economic efficiency of resource allocation is related to land reform. Classical and neoclassical schools insist that land reform must be achieved for agricultural development by more efficient use of inputs. According to them, there is no incentive for tenants to use inputs until $MVP{\ell}=wage$ under the share tenancy. But "equal efficiency" school's conclusions are different. They conclude that there is no productivity differences between owner cultivation and share tenancy, owing to monopoly power of landlords and/or landlords's transaction costs. Considering X-efficiency, the share tenancy is not as efficient as the owner cultivation. On the other hand, the productivity differences may be reverse, in which landlords cultivate their lands by wage contracts. Land reform--reduction of land rent or redistribution of land--will be benefitable not only for agricultural development, but also for resource allocation in farm management.