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

Author:	Ali, Daniel Ayalew; Dercon, Stefan; Gautam, Madhur;	Collection Title:	Policy Research working paper ; no. WPS 4363
Country:	Ethiopia;	Date Stored:	2007/09/20
Document Date:	2007/09/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	Africa
Report Number:	WPS4363	SubTopics:	Common Property Resource Development; Municipal Housing and Land; Forestry; Rural Development Knowledge & Information Systems; Urban Housing
Volume No:	1 of 1

Summary: 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.


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