In 1789, the revolutionary government seized French lands owned by the church, about 6.5% of the country, and redistributed them through auction. This move provided a useful experiment for the researchers—Susquehanna University’s Theresa Finley, Hebrew University of Jerusalem’s Raphaël Franck, and George Mason University’s Noel Johnson.
They tracked the agricultural outputs of the properties and the investment in infrastructure like irrigation, and find that areas with the most church property before the revolution—and thus the most redistribution afterward—saw higher output and more investment over the next 50-plus years. They also found more inequality in the size of farms, thanks to consolidation of previously fragmented land, than in areas with less redistribution.
Why does this matter? The authors argue that this is a case that helps explain one of the most important concepts in economics and law, the Coase theorem, developed from the work of the Nobel-prize winning economist Ronald Coase. The theorem says that bargaining should result in optimal outcomes regardless of how economic institutions are designed. However, the lack of perfect bargains in the world led economists to refine this prediction—these optimal outcomes only happen when there are no transaction costs. In reality, the high costs of making a deal often block mutually beneficial deals. [...]
In other words, this research argues that radicals who wanted to do more than simply abolish feudal privileges, but actually redistribute the land itself, had an economic point: Without reallocating resources directly, it seems it took far longer for revolutionary reforms to take hold and the advantages felt in areas with more redistribution to subside.
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