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Citation Information

Type Working Paper
Title Property rights in a very poor country: tenure insecurity and investment in Ethiopia
Author(s)
Volume WPS
Issue 4363
Publication (Day/Month/Year) 2007
Page numbers 0-0
URL http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2007/09/20/000158349_20070920132159/Re​ndered/PDF/WPS4363.pdf
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 stateowned, 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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