What is the effect of the emancipation of serfs and the creation of modern property rights on economic development? Was the former or the latter more important in fostering economic development? I examine how the disappearance of feudal property rights institutions and the emancipation of serfs affected land use, agricultural income, literacy and industrial employment in the Kingdom of Hungary. I use village-level data on the land reform process that ended the manorial economy and partitioned the landlord lands from those of the serfs. This step helped to create more secure land property rights that contemporaries considered crucial to introduce modern agricultural techniques. Specifically, I look at how land reform impacted land use, that is, how the share of different land use changed in villages that went through the partition process.