Agrarian Institutions and Agricultural Productivity: Quantitative Evidence From Interwar Romania

This article examines the relationship between agrarian institutions and agricultural productivity in interwar Romania, with particular attention to the effects of the 1921 land reform and the structure of land ownership. The economic history and cliometric literature emphasizes the role of institutions in shaping long-term economic performance, yet systematic quantitative evidence for Southeastern Europe remains limited. Romania provides a particularly relevant case study, as agriculture dominated the national economy and land ownership was highly polarized between large estates and a vast number of small peasant holdings. The land reform of 1921 redistributed roughly one-third of the country’s agricultural land to smallholders, representing one of the most extensive agrarian reforms in interwar Europe. The article constructs a new historical dataset at the county level covering the period 1900–1938, integrating information on agricultural productivity, land ownership structures, and key geographic and demographic characteristics. To identify the causal effects of agrarian institutions, the study employs modern econometric techniques, including fixed-effects models and instrumental variable strategies. The findings suggest mixed effects of the reform: while the strengthening of property rights encouraged productive effort and contributed to higher agricultural productivity in some regions, the increasing fragmentation of landholdings constrained these gains, particularly in areas with limited market access and infrastructure. Overall, the results contribute to the broader debate on the role of agrarian institutions in long-term economic development and provide comparative insights relevant to other economies undergoing structural transformation.