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Property rights in a very poor country : tenure insecurity and investment in Ethiopia

Author

Listed:
  • Ali, Daniel Ayalew
  • Dercon, Stefan
  • Gautam, Madhur
Abstract
This paper provides evidence from one of the poorest countries of the world that the property rights matter for efficiency, investment, and growth. With all land state-owned, the threat of land redistribution never appears far off the agenda. Land rental and leasing have been made legal, but transfer rights remain restricted and the perception of continuing tenure insecurity remains quite strong. Using a unique panel data set, this study investigates whether transfer rights and tenure insecurity affect household investment decisions, focusing on trees and shrubs. The panel data estimates suggest that limited perceived transfer rights, and the threat of expropriation, negatively affect long-term investment in Ethiopian agriculture, contributing to the low returns from land and perpetuating low growth and poverty.

Suggested Citation

  • Ali, Daniel Ayalew & Dercon, Stefan & Gautam, Madhur, 2007. "Property rights in a very poor country : tenure insecurity and investment in Ethiopia," Policy Research Working Paper Series 4363, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4363
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Common Property Resource Development; Forestry; Municipal Housing and Land; Rural Development Knowledge&Information Systems; Urban Housing;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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