Property Rights in a Very Poor Country: Tenure Insecurity and Investment in Ethiopia

Download or read book Property Rights in a Very Poor Country: Tenure Insecurity and Investment in Ethiopia written by Madhur Gautam and published by World Bank Publications. This book was released on 2007 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.