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

Daniel Ayalew Ali, Stefan Dercon and Madhur Gautam

No 4363, Policy Research Working Paper Series from The World Bank

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.

Keywords: Common Property Resource Development; Forestry; Municipal Housing and Land; Rural Development Knowledge&Information Systems; Urban Housing (search for similar items in EconPapers)
Date: 2007-09-01
New Economics Papers: this item is included in nep-afr, nep-agr, nep-dev, nep-env, nep-knm and nep-tra
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Property rights in a very poor country: tenure insecurity and investment in Ethiopia (2011)
Working Paper: Property Rights in a Very Poor Country: Tenure Insecurity and Investment in Ethiopia (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:4363

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