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Land Titles, Investment, and Agricultural Productivity in Madagascar

Source: siteresources.worldbank.org
Topic: Land Investment

Sort Desciption: development, the returns to land specific investment, and soil fertility ..... Land titling can increase investment in land, agricultural productivity, ...

Content Inside: I S L AND T ITLING IN S UB -S AHARAN A FRICA C OST -E FFECTIVE ? E VIDENCE FROM M ADAGASCAR Hanan Jacoby and Bart Minten * November 2005 ABSTRACT Land rights formalization has been promoted as a way to encourage agricultural investment and stimulate land markets, yet little is known about the benefits of such policies in sub-Saharan Africa, where pre-conditions for success are less favorable. Using a large sample of plots from an intensively titled rice-growing area of Madagascar, we compare land-specific investments, land productivity, and land values between titled and untitled plots cultivated by the same household. We find no significant effect of having a title on plot-specific investment and correspondingly small impacts on land productivity and land values. These results are consistent with simulation evidence from a theoretical model of investment under expropriation risk. A cost-benefit analysis based on our findings suggests that formal titling should not be extended in rural Madagascar. * The World Bank (DECRG) and Cornell University, respectively. This paper is part of a larger study entitled “Land Titles, Investment, and Agricultural Productivity in Madagascar”. We are grateful to Gershon Feder for comments on an earlier draft of that report. Reducing land tenure insecurity is seen as a legitimate role for the state, and often as a cost-effective intervention. Evidence from Asia and Latin America suggests that formalization of land ownership, through registration and titling, can deliver large productivity gains. Formalization is particularly attractive where indigenous tenure systems are weak or absent, where the return on investment in land is high, and where collateralized lending has taken hold. In most of sub-Saharan Africa, however, none of these conditions apply, leading some to question the wisdom of registering land and widely distributing land titles. 1 Empirical work examining the effects of land rights formalization in sub ...

madagascar land right

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