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Národohospodářská fakulta Vysoká škola ekonomická v Praze ...

Národohospodářská fakulta

Vysoká škola ekonomická v Praze

Soutěžní práce do Soutěže o cenu děkana

Národohospodářské fakulty VŠE

Kategorie: magisterské studium

Název práce:

ECONOMICS OF INHERITANCE SYSTEMS,

DISINHERITANCE AND RESOURCE SCARCITY

EFFECTS AND CONSEQUENCES

Autor:

David Dolejší


Praha 2011


ECONOMICS OF INHERITANCE SYSTEMS,

DISINHERITANCE AND RESOURCE SCARCITY

EFFECTS AND CONSEQUENCES

David Dolejší

ABSTRACT

Systems of inheritance are explored in this article to better understand the

complicated phenomena of the economic development of region. Method of cost

benefit analysis is used to explain overall effects of the different system of

property division across generation. The analysis is enriched by institution of

disinheritance and by wealth of society. In the light of relevant determinants the

far-reaching consequences of two extreme forms of inheritance, single-heir and

multiple-heir system, are evaluated in terms of developing communities.

V práci jsou prozkoumány systémy dědictví, které pomáhají vysvětlit složitost

fenoménu ekonomického rozvoje regionu. Pomocí metody poměřování nákladů

a výnosů je vysvětlen efekt rozdílných systému převodu vlastnictví mezi

generacemi. Tato analýza je obohacena o instituci vydědění a bohatství

společnosti. Ve světle relevantních determinantů jsou vyhodnoceny dalekosáhlé

vlivy dvou rozdílných forem dědictví, systém jednoho dědice nebo více dědiců,

v rámci rozvoje komunity.

JEL Classification: D02, D13, D31, O12

Key Words:

Disinheritance, Inheritance, Family Distribution, Resource Scarcity,

Development of Region


―The fact that men ‘inherit’ seems to be a fact that

prima facie should have real economic significance.”

Josiah Stamp 1926, p. 341

Systems of inheritance as a non-market solution to the allocation of property across

generation have a real economic impact on development especially in poorer rural societies.

Intergeneration transfer of property has economic and social consequences not only for

individuals and their families but also for the whole community and affiliated regions.

Inheritance systems can be best described as institutions and as such, following the early

modern instituonalist Douglas C. North (2009, 3), they are ―the rules of the game in a society,

or more formally, are the humanly devised constraints that shape human interaction‖. In fact,

inheritance systems are connected to the local community, based on customs and rules and its

analysis shows how different division of property among heirs influences individual

incentives, a structure of society and its development.

The idea that institutions matter and determinate the degree of development has been

presented in economics since its beginning. The importance of the law of descent to human

affairs has been already mentioned by Alexis de Tocqueville (2002) in the first half of 19th

century. However, the present scholars and primarily economists pay only a little attention to

inheritance. Exceptions can found, for instance, in Andre and Platteau (1998), Platteau and

Baland (2001) or Kuran (2003, 2004, 2005).

The purpose of this article is to use economic deduction and argumentation to create

complex framework about different systems of inheritance. It is shown how the institution of

disinheritance and availability of free land can notably change motivation within the family,

eliminate free-rider problem among children and influence the otherwise expected outcome of

property transfer across generations. Furthermore proper analysis of these determinants can

help to explain puzzling question: Why the inheritance systems does not matter anymore in

rich society? The paper focuses on consequences of succession and starts from elementary

cost benefit analysis of the property owner and the inheritor. Following this logic, the analysis

explains the particular economic and social impact on individuals and societies. It

concentrates on how system of intergeneration property distribution and its determinants can

influence incentives of individuals, family structure, motivation for migration, population

growth and the economic development of commerce sectors.

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Systems of Inheritance, Disinheritance and Free land

According to Sussman et al (1970, 10) inheritance is defined as ―the transfer of property

within families and along generational and bilateral kin lines‖. From family member‘s point

of view, inheritance takes the form of a pure or non-reciprocal gift and thus it is based on

long-term relationships within family (Kennedy 1991). However, it is appropriate to analyze

inheritance as an institution characteristic to the given region or society. In this sense, the

transfer of property is primarily affected by customs, cultures, rules, laws and norms of local

society and it results in specific system of inheritance which varies from the region to region.

The actual inheritance system is the comprehensive institution where particular factors are

reflected which affect the distribution of property between generations.

Basically, we can distinguish between two principal concepts of inheritance: a singleheir

system and a multiple-heir system (Habakkuk 1955; Rogers and Salamon 1983; Alston

and Schapiro 1984; Platteau and Baland 2001). The single-heir system is mostly associated

with the primogeniture, where the eldest son, possibly a daughter, inherits the entire estate. In

this case, the family wealth is passed down to a single heir, to one individual. The result of

this system is usually impartibility of the inherited property where the entire family estate or

business is preserved between generations as a single unit. On the contrary, the multiple-heir

system has usually the form of multi-geniture where the distribution of property, the family

wealth, is portion off amid all heirs, usually only among sons, equally. In this case, the

consequence is the partibility of the inheritance; which means that the whole family estate or

business is divided, in the pure form equally, among all kids. The legal and social rules play a

crucial role in the inheritance analysis as well as wealth of society or the geographical

conditions.

a) Disinheritance as the Freedom of the Owner

The freedom of the owner to dispose or in another way influence the property distribution

across generation is one of the main determinants of inheritance systems. The decision, who

inherits and who does not, would have an influence on the result of intergenerational transfer.

This liberty in decision about transfer of property usually takes the form of the last will where

the owner can voluntary decide who inherits. Social and legal rules can generally regulate

inheritance distribution by limiting the possibility of the owner to disinherit or to decide who

inherits, this can be defined by the institution of disinheritance, which is the act by which the

owner deprives or limits the right of the heir to inherit.

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The absolute freedom to disinherit gives efficient mechanism to owner to enforce an

intergenerational exchange between him and the heir. On the contrary, the restriction of this

freedom undercuts the significance of disinheritance in exchange for guarantees of the

stability of distribution and the promise to divide the property according to the rules. The rate

of owner‘s freedom to disinherit heirs is closely related to system of inheritance in the society

and can influence the motivations within the kin.

b) Scarcity, Free Land and Wealth of Society

The wealth of society, mostly associated with availability of land but not necessary, also

influence the system of inheritance in the region. Moreover, it can help to answer the question

why in today‘s rich countries is the inheritance less important for the development. Almost

for the entire history of the world, we have been poor and our wealth has come mostly from

agriculture. In poor rural countries, where the agrarian sector employs more than 50 percent

of people and produces over 40 percent of country‘s income, the agriculture is typically

dominant industry (Johnston and Mellor 1961). This maintains the significance of the land

distribution across generation. Suppose that in underdeveloped communities, the ownership of

the land is the only way how to feed one‘s own family–it is the symbol of wealth. Under these

circumstances, the land scarcity means higher importance of property transfer especially

within the family and consequently the inheritance has a greater effect on the development.

Therefore a large amount of free land or development of region can reduce the relevance of

inheritance.

Alston and Schapiro (1984) show on their research of recent developing colonies in

North America that relatively cheap and available land would considerably restrain effect of

inheritance system. The other exception is associated with economic development of region

when land is not anymore a limiting factor (see, for instance, Schultz 1951 or Johnston and

Mellor 1961). Since the country is so rich that there is no need of this intergeneration transfer

of property to become self-sufficient and thus to have one‘s own family, the significance of

inheritance is getting weaker. A good example of this situation is the development of the

West, where inheritance is no more essential for life.

c) Evidence

Various rules and laws of descent can be found both in history and in today‘s developing

countries. Kuran (2004) describes the consequences of strict Islamic set of rules Qur'an used

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in the Middle East during medieval times. In this Arabic system only one third of a property

was divided on the bases of owner‘s choice and the other two thirds were divided among all

survivors according to strict rules of law. According to Habakkuk (1955), it depends whether

a legal system favors more the multiple-heir or the single-heir system. He points out that the

special case of England in the 19th century, where the owner could fully transfer his property

on the basis of his will and if there was no will; the eldest son inherited everything. On the

other hand, he claims that the situation was different in other western countries in that time,

―the portion that a landowner could freely dispose of–the ‘quotite disponible’ –was limited by

law, and the children had all a claim to some share in the property‖ (Habakkuk 1955, 2).

Quasi equal division of property can be found in Gagan (1976), where the prevailing system

of inheritance in Ontario in the 19th century was combination of perfectly impartible and

partible system. This curious ‗Canadian‘ system favored one, or occasionally two, prominent

inheritors who were obligated by law to ensure other survivors. Alston and Schapiro (1984)

describe the different laws in early colonies of North America where in the absence of a will,

the multi-geniture rule was mostly used in the northern colonies, whereas primogeniture was

followed in the southern colonies.

Individual Costs and Benefits of Inheritance

The effects and consequences of inheritance would be based on individuals who act and

valuate differently, nevertheless the principles are on average the same according to the

historical context and the common environment.

Kennedy (1991) summarizes general gains and losses of succession (see figure 1). He

takes inheritance as a contractual relationship, where benefits of the owners and the heirs are

based on exchange relationship between them. 1 Starting with the inheritor‘s benefits, the most

obvious one is the value of the inherited property and future benefits from the property. In

some societies, the heir can have net benefits in the intangible form, as the prominent status

within or outside the family, or the esteem of the owner or the community. A potential heir

can also gain benefits from using the estate before he actually receives the inheritance (for

example a certainty of accommodation). The owner, in exchange for these benefits, gains

mainly services provided by the heir. The heir has to contribute to the family income,

1 This approach presumes that there is at least some option for the heir to refuse the property and for the owner to

disinherit the heirs. Otherwise there would be no contractual exchange relationship and the further analysis

would be limited.

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generally in the form of labour. Moreover, he binds himself to provide additional services

usually after the transfer of the property has occurred–so call pension services. The benefits

for the owner, the labour and pension services are on the other hand the costs for the inheritor.

Waiting for the succession should be counted as well as the cost in terms of opportunity costs.

When the heir is planning his future life, he may have to postpone his wedding unless he

actually gains the inheritance or he has the certainty that he will receive it.

Figure 1

KENNEDY‘S INHERITANCE EXCHANGE RELITONSHIP: COSTS AND BENEFITS

OWNER

INHERITOR

BENEFITS

extra social capital**

- affection, respect or deference etc.

- power and status

labour services

pension rights

care and companionship

immortality

COSTS*

opportunity cost of loss consumption

problems of emotion investment

BENFITS

value of inheritance

esteem of owner and community

future ownership benefits

present benefits of future inheritance**

COSTS*

opportunity cost of waiting for inheritance

providing labour services

providing pension

providing care and companionship

postponed marriage

investing in the social capital**

Source: Kennedy (1991, 478-479)

*The original figure in Kennedy‘s article consists only of benefits. According to his work, there are also added

the most obvious costs.

**Added to the original Kennedy‘s explanation.

The property owner is in a different situation. He passes over the estate after it is

‗unnecessary‘ for him. His opportunity costs are, in a sense, a forgone consumption when

potentials heirs are dependent on him and he takes care of them (invests in them). In addition,

the relationship between owner and inheritor is somehow affected by the inheritance. Donor‘s

benefits from the relationship can be for example the respect, affection, deference or any other

sort of feeling, but it can be negative as well. Moreover, his benefits are in the form of an

important status within the family and a sort of a power over the heir. In this case, it is

convenient to use the theory of social capital, as it is explained by Chalupnicek (2010), to

describe the intergenerational exchange relationship within the family. The social capital is

created when children are willing to make an extra investment (respect, affection etc.) in

parent-child relationship (owner-inheritor relationship) in exchange for the benefits in the

form of a succession. Otherwise, when there is no expectation of reciprocity from the parents,

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children investment is identified as altruism and no social capital is created. Generally, we

assume that the vision of succession is in most cases the motivation for the potential inheritor

to invest more into his relation with the donor. The last point is about ‗the after death

benefits‘ 2 for the donor where, by continuing in the owner‘s legacy and maintenance the

family kin has given a kind of immortality to the owner.

If the overall costs of inheritance are lower than benefits for both, for the potential

inheritor and the owner, the owner is going to supply the inheritance and the potential heir is

going to demand it. Under this condition the inheritance exchange may occur and both would

be better off.

Motivation, the Family Structure and Inheritance Systems

The heirs and donors may have different motivation, and a different structure of a family may

occur under different inheritance systems. If the inheritance benefits are high enough to

compensate the owner‘s costs, he has a strong incentive to get these succession benefits and

therefore to have children and to relinquish inheritance in exchange. The motivation of

offspring for providing such benefits is clearly affected by the certainty of the property

(supposing that they want to participate in the inheritance exchange). The vision of receiving

heir‘s benefits is a compelling encouragement for the potential heir to contribute to the family

(owner‘s) wealth. In the single-heir system, only one child, the inheritor, has a chance to

receive the inheritance. In this system other children are excluded from inheriting; therefore

their incentives for contributing are in general much weaker, whereas in the multiple-heir

system, the equal division of property motives all children equally to provide services and

other favors to the donor.

In the system, where more than one child inherits, provides services; the so-called free

rider problem can emerge. It is the situation when each heir has a tendency to leave the cost of

succession on other heirs and exploit only the benefits. Another form of free-riding is if only

one child inherits the property. The higher certainty of property weakens heir‘s incentives to

fulfill intergeneration agreement. While there is only one heir, the costs of his contribution are

transferred directly to the owner and the heir exploits benefits of inheritance. To overcome

these problems, there is the institution of disinheritance, which minimizes the inclination for

2 More appropriately we should use in this context term ‗after the owner gives over his property‘ because the

owner may receive his part of his immortality benefits before his death. For example, the case when owner is

retiring and inheritor continues family business in his name.

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free-riding (Alston and Schapiro 1984). The possibility to be disinherited stimulates the

motivation of heirs to provide the benefits to owner. Generally, the threat of disinheritance is

efficient instrument for owner to enforce and to encourage potential heirs to provide services.

Under these circumstances, the incentives of heirs to fulfill their obligation to donor are

stronger with higher credibility of threat of disinheritance. Bonfield (1983) emphasizes

owner‘s freedom to dispose with the property according to his wants, which gives him control

over his progeny, thereby it significantly affects children social and economic future. It may

have been case in Elizabethan family where ―father retained control of some of what the heir

may consider his birthright, and father might be inclined towards disinheritance if he believed

his heir to be profligate‖ (Bonfield 1983, 299).

Settlement upon new marriage and establishing family, especially in poor rural

societies, has always been very costly. Particularly material resources, most importantly free

land or estate, are crucial for setting up a new home. According to Habakkuk‘s analysis

(1955) of the countries in the 19th century, inheritance in the form of a farm, a piece of land

or another property gave the child needful resources and therefore an opportunity to have a

family of his own. Under the single heir system it was difficult for the late born children to

amass the necessary resources required for establishing family and their only one alternative

was often only to ‗voluntary‘ stay in celibacy. Habakkuk (1955, 6) continues to point out that:

―In the single-heir areas the owner had relatively slight inducement to limit the number of his

children; but his brothers and sisters tended to remain unmarried. In an area of equal

division, on the other hand, it was easier for all the heirs to marry, though they may have had

some incentive to limit the number of their children in order to avoid progressive

fragmentation‖. To sum up, the size of an average inheritor‘s family in the single-heir system

tends to be larger with a lot of children and unmarried relatives (aunts and uncles in celibacy).

Conversely, under equal division of inheritance, each sibling inherits some property, which

gives him the needful resources to establish own family with less children and with a smaller

estate.

In poor rural societies, no land scarcity makes establishing family relatively cheaper.

In regards to this condition the opportunity costs of moving away from family estate and

establishing new home are lower. This would have changed the outcome whether one or the

other system of inheritance is used. Specifically, the siblings of the inheritor in the single-heir

system have weaker incentives to stay unmarried and not to have children. They are more

willing to leave their original family and to start on their own. Under the multiple-heir system,

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motivation changes as well. The progressive fragmentation is unlikely to occur, when there is

abundance of relatively cheap land, and therefore the donor has almost no incentives to limit

the size of the family. Under these conditions, it can be summarized that the structure and the

size of family would more likely be affected by the availability of free land than by

differences in the inheritance systems and in addition, the average size of family ceteris

paribus tend to be the same under the single or the multiple heir distribution of the property.

Moreover, the mechanism of disinheritance would have weaker effect on heir‘s motivation to

contribute to family income and so the enforcement of their contribution would be harder for

the owner.

Population Growth, Migration and Inheritance Systems

In literature, which deals with the law of succession, it is almost always argued, that the

inheritance systems have some effect on the population growth and mobility of the population

(see, for instance, Habakkuk 1955 or Parish and Schwartz 1972). With regards to incentives

of individuals inside the family, it is possible to analyze the nature of the population growth

and the division of labour.

In regions with land scarcity, it is appropriate to generalize Habakkuk‘s (1955)

assumption that other things being equal, the single-heir system is going to produce a larger

family of the inheritor but together with almost no marriages of his siblings this system would

probably, on aggregate, produce less children than in the equal division of property, where

every sibling has an opportunity to establish own family. As the consequence, Habakkuk

suggests hypothesis that ―the single-heir system tended to retard population growth and

division to promote it‖ Habakkuk‘s (1955, 6). With reference to Platteau and Baland (2001,

49), empirical findings are consistent with the Habakkuk‘s hypothesis, hence their conclusion

is that ―partible inheritance results in fragmentation of the land and rapid population growth

through multiplication of local nuclear households and a high nuptiality rate‖.

The effect of inheritance system on the mobility of population is another main topic in

the discussion. In developing communities, the labour is an important factor. More

specifically, the household usually needs labour to service its holdings. In this sense, Kennedy

(1991) speaks about importance of farm-specific capital, which may have been accumulated

by a single household member. It can be deduced from this that under equal division of

property, owner can use the inheritance to attract the family members (mostly speaking about

children) to stay and contribute to family wealth under the single-heir system, to attract

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another family member, except the inheriting one, can be more arduous. The owner may offer

something else in exchange (e.g. wage, food, accommodation) and unless there is no better

alternative for the non-heir, he probably stays and provides his services to the owner due to

the fact that moving away from family has always been very expensive. 3 Kennedy (1991)

concedes that there can be possibility to use market mechanism to hire non-family labour or

rent the property but it supposes to be more risky and the owner would lose the advantage of

laborer with high capital endowment specific to the home farm.

Situation differs if there is an opportunity, which is more attractive for the non-heirs

and even for the heirs. Then the migration of people may occur under both systems of

inheritance. Habakkuk (1955) in this context differentiates between the permanent and

seasonal migration. The first mentioned is more likely to happen under the one heir system,

where the only inheritor will receive the property and have a real chance to establish his

family. If the benefits of migration are certain and large enough, his siblings have incentives

to move elsewhere, usually to another region, establish a family and stay there. While the

multiple-heir distribution of property offers to all heirs the valuable inheritance–the benefit

par expellant. Under this condition, potential heirs are bounded to property but the seasonal

migration can emerge (usually before they receive the property) to make heirs better off.

Furthermore Habakkuk (1955, 7) adds that: ―Seasonal migration was not an escape from the

peasant family, but a condition of its survival. The peasant went, not to acquire a new

occupation in a different society, but to improve his position in the old.‖ The logic is also

compatible with curious equalitarian system describes in Gagan (1976), where in Canada in

the 19th century, survivors migrated away from origin community. In Ontario was culture of

large families, where heirs inherited the entire estate and had to satisfy out other survivors

usually in form of money. In this situation, the non-heirs with money in their pockets had a

great opportunity to establish family elsewhere and to continue family kin.

In regions with land abundance, results would be different. Due to the fact that the

average size of family is going to be equal either under the multiple or under the single-heir

system, the population growth and its mobility is going to be affected more likely by the

availability of free land, than by inheritance norms and systems (Alston and Schapiro 1984).

Other things being equal, under these circumstances, population growth tends to be the same

3 In poor societies, it is costly and risky to move somewhere else and to start from beginning. So the benefits of

moving away have to be certain and high enough to cover the costs of migration, otherwise family members tend

to stay at home.

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under the both types of inheritance and the mobility of people would be influenced mostly by

the allocation of free land.

Business Activities, Enterprise and Inheritance Systems

Population mobility is closely related to development of enterprise. Habakkuk (1955, 9-10)

points out that ―where the peasant population was relatively dense but immobile, industry

tended to move to the labor; where the peasant population was more mobile, even if less

fertile, the industrialist had much greater freedom to choose his site with reference to the

other relevant considerations‖. To derive the essence, it is possible to postulate, that the

multiple-heir system creates a local small business usually in the form of home or local

workshop, which has lower costs, more specifically lower wages needed to attract the

necessary labour. While under the single-heir systems, there is a higher probability of the

creation of larger business usually in the form of manufactory or factory which has to face, at

least at the beginning, higher costs of compensating workers for permanent movement but

sooner or later can acquire and benefit from economies of scale.

Various inheritance systems may also have an impact on the availability of the

property for non-family members–for entrepreneurs. At the begging the fragmentation of

property can increase the productivity but from some point the productivity would decrease

with higher division of estates. Retardation of productivity is mentioned in Habakkuk (1955)

where in the areas with equal division of inheritance, the upcoming division of property is

usually less capable to make any surplus. People in this situation are more likely to be

dependent on the revenue from the whole estate and therefore, the price would be higher to

cover the problems with higher fragmentation of the property. While in the single-heir

system, it is probably easier to get surpluses from the property and fragmentation is rare, so

willingness to sell part of the estate is higher. Against these tendencies may go larger rate of

competition under the multiple-heir, where more family units can occur. The competition

between them may lower the prize of the property but this would very likely be in average

weaker incentive than the fragmentation motive.

The inheritance also encompasses business or shares in business. According to Kuran

(2003, 2004, 2005), the strict multiple-heir system in Qur'an may have caused

underdevelopment of the Middle East. The implication of Kuran‘s (2004, 74) research is that

equal division of property brings problem of ―the preservation of successful enterprises, or

other assets, across generations‖. The family enterprise, or any other asset with similar

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characteristic, is by its nature usually hard to divide and therefore, its persistence is possible

only as a whole. The freedom of the owner to dispose property only to one child, to disinherit

other survivors, can solve this problem. Under the strict multiple-heir system, this option is

restricted. It was the case of medieval Middle East, where Qur'an law precisely defines

inheritance and reduces possibility to disinherit close kin members (Powers 1993). Then it is

up to the inheritors to find agreement about the future of the estate. One can buy out shares of

others and continue in family business line on his own, but it may be very expensive and

especially in the case of larger families or poor societies, their financial opportunities are

limited. The result is that the family business may disappear, whereas under the single-heir

system the enterprise is more likely to be preserved across the generation by disposing the

whole asset on one heir.

According Kuran (2005), the similar consequences can be inferred, with the death of

the owner under the multiple-heir system. Owner‘s partners in business have to reach

agreement about renewing the contract or liquidating the enterprise. With more heirs the costs

of reaching agreement goes up and the probability of renegotiating new partnerships goes

down. As the consequence multiple-heir system may creates motivation for keeping

partnerships smaller. Moreover, ―[m]embers of small partnerships will feel no great urge to

develop sophisticated or standardized accounting methods. They will not seek improvements

in bookkeeping of the sort that become necessary to facilitate communication and

coordination among large numbers of shareholders‖ (Kuran 2005, 816). To sum up, the equal

division of property may have far-reaching negative effects on the foundation of the financial

and commercial sector and that may slow down development of the region, whereas the

single-heir system seems to be more favorable to enterprise and regional development.

In the present developed world, where the resources to establish and to manage the

business are more accessible, the effect of different inheritance systems is negligible. Since

the heir‘s future life is less dependent on owner‘s property and the chance to buy out other

survivors are higher, the persistence of enterprise within the family even under the equal

generation division of property is more probable. Furthermore, the business has been removed

from the family law and institutions such as legal personality (joint stock companies and

corporations) has been invented to definitely overcome primary problem with generation

entrepreneurship and to allow creating a stable commerce sector. Both these tendencies can be

found in the 19th century in Islamic countries, where commerce was placed outside the

jurisdiction of Islamic court and new forms of companies were allowed (Kuran 2003).

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Conclusion

For those who live in the already developed world, the institution of inheritance seems to be

more or less insignificant; however it used to be different. In this article has been developed

the fundamental model of inheritance based on basic cost benefit analysis to show economic

consequences of single-heir and multiple-heir system.

I argue that mostly neglected effects of right to disinherit and wealth of society are

often critical elements in evaluation of inheritance output. My explanation is that material

dependence of children in developing region, primarily on land, maintains the importance of

intergeneration property transfer within the family. By introducing institution of

disinheritance and resource abundance the partial consequences of inheritance may be notably

shaped. Considered these factors, it has been shown in three parts how property distribution

across generation can predetermined family wealth and development of region. Equal or

unequal division of property among survivors may have a far-reaching impact on incentives

of individuals and structure of families. The final consequences can be reflected in the

regional migration, in the size or persistence of enterprise and in the overall development of

commerce sector.

The historical and present development of society is without a doubt a complicated

phenomenon and systems of inheritance are only small part of a much larger complex of

causes. Thus it would be definitely a mistake to exaggerate importance of intergeneration

transfer of property; however its influence should not be neglected particularly in poor or land

dependent agrarian communities.

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