Theoretical arguments lead to the conclusion that there should be more land-secured credit, more investment, a more active land market, and more inequality of land in a community under freehold tenure compared with one in which the state owns and allocates the land. Detailed evidence from two communities in Kenya and Tanzania suggests that none of these conclusions holds because the stated policy differences do not in fact cause the land markets to perform differently in the two countries. These results are in broad agreement with other studies conducted in Africa in recent years that indicate that indigenous land tenure arrangements provide considerable security for investment and continue to have strong impacts on land markets even when they are no longer in effect according to the law.

This chapter examines the role of human capital investment in lowering the growth of resource-abundant countries. It is shown that resource abundance leads to high initial levels of income inequality, making it difficult to generate a virtuous circle of human capital accumulation and equitable growth. However, this virtuous circle is achievable if governments can resist the temptation to ignore the quality of schooling and pursue a capital intensive growth strategy.

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