Land Rights, Power and Trees in Rural Ethiopia

Stefan Dercon and Daniel Ayalew
Authors registered in the RePEc Author Service: Daniel Ayalew Ali

No 2007-07, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: This paper provides evidence from one of the poorest countries of the world that the institutions of property rights, in particular related to land, are of crucial importance for investment and growth. In Ethiopia , with all land state-owned, the threat of land redistribution never appears far from the agenda. A constitutional reform in 1996 has promised long-term user rights, and land rental and leasing have been made legal, but land rights remain restricted and the perception of continuing tenure insecurity remains quite strong. Using a unique panel data set including data on land right perceptions over time, this study investigates whether land rights affect household investment decisions, focusing on land allocation to coffee tress and other perennial crops. The period of investigation covers a period of change in land right perceptions after a constitutional change, a large scale but unexpected land redistribution episode in one region and a start to land registration in another region, offering exogenous impact of the policy turmoil, including linked to the local political economy of land transfer rights on long-term investment in Ethiopian agriculture, contributing to the low returns from land and perpetuating low growth and poverty.

Keywords: property rights; land; investment; agriculture; Ethiopia; Africa (search for similar items in EconPapers)
JEL-codes: O13 O17 Q15 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (11)

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