Reassessing the interaction between investment and tenure uncertainty

Elizabeth J. Z. Robinson

Environment and Development Economics, 2005, vol. 10, issue 02, pages 143-157

Abstract: A diverse body of empirical literature recognizes that investment can influence tenure security, yet this phenomenon has rarely been examined analytically. This paper develops a theoretical model that demonstrates explicitly conditions under which the probability of eviction is endogenous to investment undertaken on illegally encroached land. By accommodating explicitly the government s objective function and its ability to commit credibly to an eviction policy, the model reveals why both those farmers who under-invest, and those who raise their investment levels to improve tenure security, may be behaving rationally. Indeed, both types of behaviour are accommodated within a single model.

Date: 2005

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Persistent link: http://EconPapers.repec.org/RePEc:cup:endeec:v:10:y:2005:i:02:p:143-157_00

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