Production organization and efficiency during transition: An empirical analysis of East German agriculture

Enterprise restructuring is expected to improve efficiency in transition ec onomies, With data from former East Germany, we compare the efficiency of f amily farms and partnerships with large-scale successor organizations of th e collective and state farms (LSOs). Using parametric and nonparametric tec hniques, we show that LSOs display lower technical efficiency than do famil y farms-and partnerships but that this difference is small and declining du ring transition, mainly asa result of structural changes in agriculture. Fa mily farms are not as scale efficient as partnerships and LSOs, and partner ships are superior to all other organizational forms.