Land tenure reforms in Ethiopia

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Land tenure reforms in Ethiopia Powered By Docstoc
					New Land Reforms and Their Impacts
     With Ethiopia as a Case

            Stein Holden
             Introduction
• New land reforms high on the development
  agenda:
   – (High Level) Commission on Legal
     Empowerment of the Poor
   – The World Bank (scaled up financing of
     land reforms)
   – UNHABITAT (Global Land Tools
     Network)
   – MDGs: Rights based approaches
             Some of the issues
• Are private property rights a preconditions for
  economic development?
   – de Soto, H. 2000. The Mystery of Capital: Why
     Capitalism Triumphs in the West and Fails
     Everywhere Else.
   – de Soto vs. China vs. the current financial crisis
• The relationship between financial markets and
  property markets/rights
   – The Achilles heel of the ”Western” economies
   – A source of economic growth and “bubbles”
     (boom and bust)
   – Distress sales and foreclosures during crises: What
     are appropriate policy responses?
What makes dead capital alive…?
 Land reform policy issues in LDCs
• Does formalization of land rights contribute to
  economic development?
• How can land certification (or titling) reforms be
  made more pro-poor?
• How can redistributive land reforms be designed to
  succeed?
• How can land reforms be designed to stimulate more
  sustainable land use?
And…
How can we more confidently answer these questions?
•     From anecdotal evidence to statistical evidence at
  broader scale
  The three neoclassical focal points of
              land reform
• Tenure security
  – Enhance investment
• Transferability
  – Gains from trade
  – Reallocate land to more efficient users
• Credit access
  – Land as collateral
How important are each of these and are they
 always achievable?
 ”New”(?) dimensions to land reform
• Legal empowerment of the poor and women
  – MDGs:
    • Rights-based approaches
       – Land as a safety net for the poor
    • Focus on empowerment
     Focus on land reforms to achieve MDGs
    • Global Land Tools Network (UNHabitat)
    • CLEP
• What new dimensions and new impacts
  become relevant to study?
            The evaluation problem
•   A continuum or vector (”bundle”) of land rights
•   A vector of outcome or impact indicators
•   A set of conditioning factors
•   Baseline/Starting point conditions (counterfactual)
•   Representative samples (treated and untreated)
•   Logic of reform implementation
     – Crucial for identification of impacts
     – Can researchers influence it?
        • Randomized experiments the ideal but often not feasible
        • The toolkit for quantitative impact assessment has been
           improved substantially lately and is crying to be applied
           to these types of land reform problems
Old and new land reform approaches 1
• Classical land titling reform: Formalizing private property
  rights to land
   – Surveying and titling upon demand
   – High tech and high cost approach
• Low-cost land registration and certification
   – Broad-based, large-scale implementation with strong local
      participation
   – Low-cost technology approach
   – Experimentation with alternative technology approaches
• Removal of restrictions on land markets (restrictions on sales,
  duration of rental period, price or contract restrictions, area
  restrictions, outsider restrictions, approval restrictions)
• Formalization of land markets (Rental markets vs. Sales
  markets)
Old and new land reform approaches 2
• Land redistribution policies and projects
   – Revolutionary reforms of the past
   – Regular redistributions to maintain an egalitarian land distribution
      (China, Ethiopia, Eritrea)
   – ”Market-assisted” redistributions in countries with inequitable land
      distributions (e.g. Brazil, Bolivia, South Africa, Zimbabwe, Malawi,
      The Philippines)
• Formalization of customary land rights
   – Demarcation of village borders and village land use planning
   – Issuing of customary land certificates
   – Legal recognition of customary land rights
• Legal empowerment of the poor/women
   – Conflict resolution systems
   – Joint certification of husbands and wives/rights upon divorce or death
      of spouse
   – Regulation of inheritance rights
• Linking rights and obligations: Security of tenure conditional on proper
  land use
 What are the impacts of land reforms?
Types of impacts
• Tenure security
    – Investments (e.g. conservation, tree planting)
    – Land management
    – Land conflicts
    – Land productivity
• Transferability
    – Land market participation
    – Efficiency of land use
    – Mobility/migration (labor market)
    – Land values
    – Distributional implications (land, risk/safety net, income, welfare)
• Credit access
    – Use of land as collateral
• Legal empowerment
    – Poor and vulnerable groups
    – Welfare indicators
    – Empowerment indicators
• Overall effects on poverty and equity
 Why have many land reforms failed?
• Land titling in Kenya and Madagascar
   – Have not enhanced tenure security, promoted investment,
     land and credit markets (e.g. Place and Migot-Adholla
     1998, Jacoby and Minten 2006,2008)
• Land distributions remain extremely skewed after
  many years with land redistribution reforms in Latin-
  American countries, South Africa, Zimbabwe, …
 Why have many land reforms failed in Latin America?
• Emphasis on collective ownership and management after the reform
    – Naïve belief in advantages of collective management among radical groups?
      Collective management has in most cases failed in agricultural production
       (Eastern Europe, China, Africa, LA)
• Modernization of large farms was used as a requirement not to lose the land
    – Naïve belief in economies of scale? Limited EOS in tropical agriculture
• Large farms were favored in allocation of (subsidized) credit in relation to
  the modernization, eliminating advantages from small scale production
• Successful small scale production requires more than land (knowledge,
  skills, access to credit and other markets, infrastructure)
    – Many types of investments are necessary and it takes time before benefits come
• Naïve belief that establishment of private property rights is sufficient for
  the credit market to start to function well
• Big land owners have allied themselves with those in power
    – Democracies have also failed to achieve large land redistributions
 Examples of successful land reforms
• Ethiopia
  – Low-cost land registration and certification
• China
  – Household responsibility system
• Mexico
  – Constitutional reform
• India
  – Computerized registry system, tax-base
   Case study on the new land
       reform in Ethiopia
A summary of key findings follows for
  impacts of land certification on
  – Land market participation + Gender
  – Investment, land management and land
    productivity
  – Gender and land productivity
  – Land conflicts
  – Household poverty
  – Empowerment of women
    Land certification in Ethiopia
• Certification: Individual households are given user rights
   –   Includes rights to use, bequeath, inherit, rent out, invest
   –   No right to sell or mortgage
   –   Responsibility for land conservation
   –   Restrictions on migration and on duration of rental contracts
   –   Restriction that maximum 50% of holding can be rented out
   –   Obligation to use the land
• Land certification started first in Tigray Region in 1998
• Land certification started in 2003-2005 in three other
  regions (Amhara, Oromiya, and SNNP regions) of the
  country
     Conceptual model for land certification project

   Regional Land        Federal Land Proclamation   Federal Government
  Proclamation and
Implementation Rules
                                                    Regional Government


                               Resources                  Donors
Land Registration and
    Certification
  Implementation


                         Community Conditions
       Impacts:           Before Land Reform
a)   Land Disputes
b)   Land Markets                                      Poor People’s
c)   Land Investments                                  Individual and
                                Markets
d)   Women’s                                        Collective Assets and
     Empowerment                                         Capabilities

                                Poverty
                               Reduction
             Land laws, land administration and
                   land conflict resolution

                            Federal level Land Proclamation



                           Regional level Land Proclamation
                                                              Regional level land administration
   Higher courts              and Implementation Rules



    District court                                            District level land administration



 Village social court            Land registration            Village level land administration
                                 and Certification

Local conflict mediators
                                   Land disputes
Land certificates in Tigray
              • Simple one-page
                certificates
                – Name of head of hh
                  (husband not wife
                  usually)
                – Name of location,
                  plotsize, land quality of
                  plots, and names of
                  neighbours
      Administrative costs and
          sustainability
• Regional governments do not have enough
  funds to ensure high quality land certification
   – Low-cost approaches are necessary
   – Level of technology, staff skills
• Administrative approaches chosen require
  maintenance
   – Low-cost approaches can be more difficult to maintain
   – Different approaches are tested in different regions,
     some gradual upgrading
   – Some high-cost approaches tested (e.g. in the
     Amhara Region) are much too costly
Land registries
        • Books or computers
          or both?
          – Skill requirements
          – Costs of equipment
            and infrastructure
          – Maintenance costs
          – How decentralised?
Digital maps or simple drawings?
        Costs vs. accuracy
      Data in Tigray Region
• Household panel data survey
     • Stratified random sample of 400 households in
       16 communities
     • Stratification based on population density,
       market access and agroclimatic variation (sub-
       sample of an IFPRI community survey)
     • Surveyed in 1998, 2001, 2003 and 2006
        – Household and farm plot level data
        – Use households for which we have
          complete data (balanced panel)
     • Survey of 400 local conflict mediators in
       27 communities (85 villages)
Tenure Insecurity, Gender,
Low-cost Land Certification,
 and Land Rental Market
      Participation
                          By
  Stein Holden, Klaus Deininger and Hosaena Ghebru
   Gender and Market Participation:
          Key Hypotheses
• H1. Female-headed households are more likely to
  rent out land and rent out more land than male-
  headed households (due to their poverty in non-
  tradable non-land resources) vs.
• H2. Female-headed households rent out less land
  than male-headed households because they are
  more tenure insecure.
• H3. Landlords that received certificates rent out more
  land after the reform (due to increased tenure
  security).
• H4. Female landlords that received land certificates
  rent out more land as a response to getting land
  certificates compared to male landlords that received
  land certificates (because they initially were more
  tenure insecure and land certificates increased their
  tenure security relatively more).
                      Findings
• Significant and positive effect of land certification
  on the amount of activity in the land rental
  market
   – Potential landlords have become more willing to rent
     out their land, especially female-headed households
   – Female-headed households with land certificates
     rented out significantly more land
   – Easier for (potential) tenants to access land to rent in
• Significant transaction costs in the land rental
  market also after the certification
          Land rental market participation in 2003:
Distribution of net land leased in by own farm size
  10
      5
      0
  -5
-10




          0         5              10              15      20
                                  ownlnd

                         95% CI            Fitted values
                         nli
  Impacts of Low-cost Land
Certification on Investment and
          Productivity
                         By
   Stein Holden, Klaus Deininger and Hosaena Ghebru
     Investments, Management and
    Productivity of Land: Hypotheses
• H1: Having a certificate for a farm plot enhances
  investments on the plot in form of building of new
  structures, improvement/ maintenance of existing
  conservation structures and planting of trees
• H2: Restrictions on tree planting in the land
  proclamations (especially on eucalyptus) have
  prevented investment in trees. Therefore, land
  certification has not stimulated this type of
  investment and there will be no difference between
  plots with and without certificates
• H3:Land certification has enhanced land productivity
                 Findings
• Land certification has contributed to
  – Increased investment in trees
  – Better management of soil conservation
    structures
  – Higher land productivity (+45% on average)
          Yield distribution, plots with and
           .5
           .4
           .3  without land certificate
Density



           .2
           .1
            0




                0   2        4                 6               8    10
                                 logtotvalha

                        Certificate                No certificate
      Why is Land Productivity Lower
on Land Rented Out by Female Landlords?
    – Theory, and Evidence from Ethiopia
                      By
                 Stein Holden
      Norwegian University of Life Sciences
                      and
              Mintewab Bezabih
              Göteborg University
               Introduction
• Female headed households typically
  belong to the poorest group of households
  in rural areas of Africa
  – Asset poverty
  – Insecure property rights
  – Weak bargaining power
  – Low status
  – Low political power
    Propensity score matching results

Variable            All plots                 Owner-operated        Rented out plots
                                              plots
                    Kernel      Nearest      Kernel     Nearest     Kernel       Nearest
                    matching    neighbour    matching   neighbour   matching     neighbour

Land productivity

Female landlords    1366.02      1366.02      1430.85    1430.85     1345.05     1345.05

Male landlords      1806.08      1952.30      1799.02    2266.90     1815.49     1753.60

Difference           -440.1      -586.28      -368.2     -836.04     -470.44     -408.55

Bootstrapped st.    126.21       177.76       255.65     414.59      156.26       210.83
error
t-statistic         -3.487***    -3.298***     -1.440    -2.017**    -3.011***    -1.938**


Number of
observations
Female landlords      439          439          124        124         315         315

Male landlords        820          477          329        153         484         255
        Why lower productivity:
             Hypotheses
• Female landlords have land of poorer quality
• Female landlords are more tenure insecure and use only
  short-term inefficient sharecropping contracts
• Female landlords are less able to enforce efficient
  bahaviour of their tenants by using threat of eviction if
  performance is poor
• Female landlords are less able to screen and select
  good tenants and to evict bad tenants
• Female landlords rent out the land to their relatives who
  may not be efficient tenants
        Tenant characteristics of male and female
                  landlord households
Variable           Female       Male         Bonferroni test of
                   landlords    landlords    significant difference
                   Mean value   Mean value       F          Prob >
Tenant age             2.368        2.232      4.73        0.0090
(tage)1
Oxen owned by         1.940        2.075      2.99        0.0041
tenant (toxcd)

Blood-related          .466        .365      12.81        0.0004
tenant (btenant)
In-law related         .184        .102      17.58        0.0000
tenant (stenant)
Duration of           4.825        2.637      9.17        0.0000
partnership
(clength1)
          .4
          .3
               Yield distribution by sex
Density



          .2
          .1
           0




               2    4                  6             8             10
                                     logyield

                        Male landlords          Female landlords
          Duration of partnerships by sex
           .25
             .2
           .15
Density



             .1
           .05
                 0




                     0   5                 10            15            20
                                         clength1

                             Male landlords         Female landlords
          Share of land rented out by sex
          1.5
                2
Density




                1
           .5
                0




                    0   .2          .4           .6          .8          1
                                         tradeshare

                             Male landlords           Female landlords
                        Conclusions
Tested alternative models and theories to explain the productivity
   differential on rented out plots of female vs. male landlord
   households in the Ethiopian highlands.
• Significant differences in tenant characteristics for female vs male
   landlords pointing in direction of adverse selection due to higher
   eviction costs and possibly female landlords’ lower ability to screen
   and select good tenants
• Higher level of inefficiency linked to kinship contracts of female
   landlords in relation to contracts with in-law tenants.
    – May be due to the high eviction costs of tenure insecure female
       landlords who therefore are less able to freely screen and select
       the better tenants than male landlords are.
• Contract duration of female landlords was longer than for male
   landlords indicating that they were less able to use threat of eviction
   to enhance tenants’ effort
 Would land certification change this?

• If female-headed households receive land
  certificates, do they become more tenure
  secure?
• More able to evict bad tenants?
• Better able to select good tenants?
• Less dependent on (in-law) tenants?
• Obtain higher productivity on rented out land?
• What do the panel data from Tigray tell us?
           Land productivity on rented out land of male
                  and female landlords by year
                           1998: Before certification                                                                 2006: 7 years after certification
                                          Kernel density estimate                                                                    Kernel density estimate
          .5




                                                                                                     .5
          .4




                                                                                                     .4
          .3




                                                                                                     .3
Density




                                                                                      Density
          .2




                                                                                                     .2
          .1




                                                                                                     .1
           0




                                                                                                      0



               2                      4                     6            8                      10               4                           6                  8                10
                                                       rologtotvha                                                                                rologtotvha

                                      Female headed hh               Male headed hh                                              Female headed hh               Male headed hh
               kernel = epanechnikov, bandwidth = 0.2918                                                  kernel = epanechnikov, bandwidth = 0.3069
Can land registration and
certification reduce land
    border conflicts?

                         By
 Stein Holden, Klaus Deininger and Hosaena Ghebru
       General Conflict Theory
Struggles over territory among the most pervasive
  forms of conflicts
• Malthusian hypothesis: Severe land scarcity leads
  to more conflicts (Malthus, 1798, Homer-Dixon,
  1999, Diamond, 2005)
• Resource curse hypothesis, certain valuable
  resources lead to rent-seeking and conflicts
   – Role of institutions crucial (Mehlum et al. 2006)
• Inequality/relative deprivation enhances conflicts
• How do land reforms affect conflicts over land?
   – Mixed empirical evidence
                  Hypotheses
•   1. Neo-Malthusian hypothesis
•   2. Resource curse hypothesis
•   3. Market access hypothesis
•   4. Fuzzy border hypothesis
•   5. Land redistribution conflict hypothesis
•   6. Quality land reform reduces conflicts hypothesis
    – Better plot border demarcation + area measurement +
      witnesses + land certificate
• 7. Local participation reduces conflicts hypothesis
Types of conflicts           Total number    % of all     Number of % of land conflicts
                              of conflicts   conflicts    conflicts to in woreda courts
                                                         woreda courts
All conflicts                   18620          100
All land-related conflicts       9705          52.1         1530             100
 Border conflicts                3630          19.5          711            46.5
 Ownership/inheritance
conflicts                        1870           10           284            18.6

Divorce-related conflicts
                                 2603           14           353            23.1
 Land redistribution
                                 1155          6.2            98             6.4
conflicts
 Land rental contract
                                 678           3.6            84             5.5
conflicts
Conflicts involving
violence                         1300           7            220            14.4

Cases that went to woreda
courts                           1530          8.2          1530             100
   THE MOST DIFFICULT CONFLICTS TO DEAL WITH

Type of conflict                 Most difficult    Second most

                                    conflict      difficult conflict

Border conflict                       170                61

Ownership/inheritance conflict        67                130


Divorce-related conflict              88                112

Land redistribution conflict          13                 19

Land rental contract conflict          7                 11
  BORDER CONFLICTS DURING AND AFTER THE
   LAND REGISTRATION AND CERTIFICATION
                             Situation after the registration and certification
                 Change       Less         No           More         Total (%)
                            conflicts change          conflicts

Situation         Less         198          9            16         223 (58.4)
during          conflicts
registration
and
                No change       33         65             8         106 (27.7)
certification

                 More           30          3            20          53 (13.9)
                conflicts


                Total (%)   261 (68.3) 77 (20.2)     44 (11.5)      382 (100)
Conflict mediators’ perceptions of border disputes
  before and after land certification, Southern
        Ethiopia (Holden and Tefera 2008)
 Has the land registration and            Were border disputes common
 certification had any effect on border       before registration?
 disputes in your community after the
 registration and certification process    No         Yes         All
 was completed?
 Less disputes                             13         107        120
 No change                                 16          18         34
 More disputes                              4          10         14
 Total                                     33         135        168
Chi-square=22.8, p=0.000
                  Main findings
• The land reform in Tigray has contributed to a
  reduction in land border disputes
• Better market access is associated with less conflicts
• Variation in quality of the reform was reflected in the
  frequency of conflicts: Better quality -> Less conflicts
   – Quality of land demarcation and measurement
   – Involvement of local elders enhanced conflicts
• Some support for the resource curse hypothesis
• Many land border conflicts near district centers remain
  unresolved
   – Expansion of urban centers into rural areas has not been
     addressed well by the reform
            Poverty effects
• Households that recived land certificates
  increased their consumption expenditure
  per capita more than other households
• This was particularly the case for female-
  headed households that received land
  certificates
• These findings are robust and not
  contaminated by endogeneity bias
    Joint certification of husbands and
     wives: Women’s Empowerment
• Study in Southern Ethiopia by Holden and Tefera (2008):
  Study early impacts
• ”From Being the Property of Men to becoming Equal
  Owners”
• Available at:
   – http://www.gltn.net/en/newspage/land-registration-in-ethiopia-early-
     impacts-on-women.html
• Laws without enforcement may not help much when
  there are strong traditions against them
• Indications that the joint certification program has
  strengthened the position of women in SE
 Successful land reform in Ethiopia
• Land certificates have been provided to more than 6 million
  households and for more than 20 million plots of land within a
  period of 8 years
• Land certification has in Tigray enhanced
   – Tenure security, especially of women
   – Land rental market participation
   – Land investments
   – Land productivity
   – Reduced land conflicts
   – Reduced poverty, especially of female headed households
   (Deininger et al. 2008, Holden et al. 2008a, 2008b, in press, Holden and
     Tefera 2008, Ghebru and Holden 2008). The studies can be obtained
     from stein.holden@umb.no upon request.
  Why has the Ethiopian land reform
        been so successful?
• It has not provided full private property rights
  to land
• It has not opened for sales markets for land
• It has not opened for mortgaging of land
• It has not used advanced technology or highly
  skilled technical staff during implementation
  (except in pilot areas)
     Conclusion: Wider perspective
Why the Ethiopian reform with more restricted rights
  has been successful while land titling programs in
  Kenya and Madagascar did not have similar effects:
• Collateral effect unimportant in all cases
• Initial tenure insecurity higher in Ethiopia – created
  a demand for certificates
• Low cost and rapid implementation through a
  participatory and transparent process
• Local administrative capacity and motivation
• No local elite was threatened by the reform
To what extent can it be replicated elsewhere?

				
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