Small Farms, Externalities, and the Dust Bowl of the 1930's
NBER Working Paper No. 10055
We provide a new and more complete analysis of the origins of the Dust Bowl of the 1930s, one of the most severe environmental crises in North America in the 20th Century. Severe drought and wind erosion hit the Great Plains in 1930 and lasted through 1940. There were similar droughts in the 1950s and 1970s, but no comparable level of wind erosion. We explain why. The prevalence of small farms in the 1930s limited private solutions for controlling the downwind externalities associated with wind erosion. Drifting sand from unprotected fields damaged neighboring farms. Small farmers cultivated more of their land and were less likely to invest in erosion control than were larger farmers. Soil Conservation Districts, established by government after 1937, helped coordinate erosion control. This unitized' solution for collective action is similar to that used in other natural resource/environmental settings.
Published: Hansen, Zeynep K. and Gary D. Libecap. "Small Farms, Externalities, And The Dust Bowl Of The 1930s," Journal of Political Economy, 2004, v112(3,Jun), 665-694.