Property rights in East Africa

Secure and transferable property rights are widely considered central to supporting trade and investment, to the productive allocation of labour, and to the economic security of vulnerable groups.  However, the appropriate design of these institutions to foster improved economic outcomes for the poor, and the practical means by which such rights should be instated on the ground, remain largely unknown.  This project will investigate alternative institutional designs and policy measures that aim to improve growth and poverty outcomes for the poor.  Microeconomic evidence gathered across a variety of settings (in rural and urban areas, and in peaceful and post-conflict contexts) and from a variety of policy options (formal user rights varying in their term and credibility, and legal aid that lowers costs of using existing rights) will shed light on context-appropriate institutions for the legal empowerment of the poor. 

Ethiopia is a case in point. Constitutionally, land is state-owned. After the initial land reform in 1976, forced land transfers between households has long been the standard means of re-allocating land to newly formed or ‘deserving’ households. In recent years, the governing party has committed to stop these irregular transfer and long-term user rights have been promised to farmers. The credibility of this policy will still need to be established. An existing rural panel data includes data on the perceived risks of land losses due to redistribution since the 1990s. As part of this project, these data will be updated with more recent farmers’ perceptions of land rights, and used for an assessment of extent to which credibility. Furthermore, the data will be used to assess the implications of the current land rights for investment in land, including in perennial crops, trees and soil conservation.  We will investigate how institutional design in this area can affect poverty and growth via effects on rural investment, diversification and land markets. More specifically, it is hypothesized that it is not necessarily the case that land titling is essential for appropriate incentives, as long other mechanisms exist to ensure long-term credible user rights.

In Tanzania, the project will work with the Development Economics Research Group of the World Bank to evaluate impacts of a government program that offers formal title to residents of urban unplanned settlements.  Since 2004, the Ministry of Land, Housing, and Human Settlements Development (MLHHSD) has issued two-year Residential Licenses in an area covering half of Dar es Salaam’s estimated 400,000 house plots in unplanned settlements.  A ‘natural experiment’ allows comparison of inhabitants of areas that were offered these licenses with inhabitants in comparable parts of the city that were excluded from the program.  By combining administrative data from MLHHSD and from the three Dar es Salaam municipalities with household survey data, it will be possible to assess the impacts of this program (if any) on investment in informal-sector businesses, on credit access, and on the allocation of labour.  Since this short-term license can be issued at low cost, but provides only limited security, this will shed light on a potentially cost-effective means of strengthening property rights.  In a subsequent phase of work, a randomized evaluation of a higher-cost program that offers full rights of occupancy (in Tanzania, this is a leasehold of 33 to 99 years) in comparable areas will be conducted to provide a comparison of costs and returns from alternative policy measures. 

In Uganda, where the 1998 Land Act shares many features with that passed in Tanzania in the following year, political constraints have hampered efforts to use demarcation and formalization schemes to provide security of tenure.  In northern and central Uganda, Acholi and Buganda leadership, respectively, have expressed concerns about government titling activities.  Still, the problem of refugee return – of the estimated 1.8 million internally displaced people in the North, approximately 740,000 are believed to have left IDP camps to return home – and the sensitivity of land issues in a post-conflict context place great urgency on a policy framework that will can resolve disputes over land and provide some security.  To this end, the Uganda Land Alliance, a consortium of NGOs with a strong local presence in the North, is expanding its program of land rights sensitization and mediation through the opening of Land Rights Information Centres, currently operational in 8 districts, including 3 in the North.  The project is discussing strategies with the ULA to evaluate the impact of its paralegal mediation activities.  We plan to collect household survey data in advance of the roll-out of new paralegals in order to evaluate the impact of this alternative approach to strengthening property rights by enhancing access and information rather than by issuing formal title. 

In a next phase, this work will be contrasted with related work in Ghana (where land rights are largely customary) and Kenya (where land titling took place, with conflicting impacts), leading to a general comparative discussion on the implications of different land rights structures and its further policy implications for the design of appropriate land policies.