Development outcomes of land tenure formalization under customary and statutory land tenure systems in Tanzania: a multinomial endogenous switching regression approach

Abstract

Background Land Tenure Formalization (LTF) is long advocated as a policy prescription that fosters growth and reduces poverty in developing countries. However, the empirical evidence on LTF effects is mixed and inconclusive, proving unclear implications for policy. A set of possible conceptual and methodological flaws arising from treating LTF as a dichotomy between formalized and non-formalized alongside potential selectivity biases are amongst the main explanations for the mixed and inconclusive results. Using Tanzania’s National Panel Survey data from the 2014/2015 wave and employing a Selectivity Corrected Multinomial Endogenous Switching Regression, this study models the development outcomes of LTF with clear distinction of LTF between customary and statutory land tenure systems in Tanzania. Findings The study finds that possession of formal land tenure certificates [Certificate of Customary Right of Occupancy (CCRO) or Certificate of Granted Right of Occupancy (CGRO)] improves perceived land tenure security, but the effect is relatively larger and more significant for CGRO holders than CCRO holders especially in economically high potential areas, where land is becoming more individualized and commoditized. With regard to credit access, our results show variations in the effects between general, formal, and informal credit access. While there is no significant effect of LTF on general access to credit, possessing a CGRO significantly reduces the uptake of informal credit and appears to improve access to formal credit. With regard to land investments, our results show positive and significant effects of LTF on organic and inorganic fertilizer use as well as trees and permanent crops investments, but only for CGRO plots. Conclusions The study concludes that the effects of LTF differ significantly between the land tenure systems, thus, treating LTF as a dichotomy between formalized and non-formalized is an oversimplification that could potentially mislead policy decisions. Therefore, the study recommends that the design, implementation and evaluation of LTF programs should recognize this distinction for greater clarity about LFT effects and more meaningful policy messages. The study, further, recommends strategic land policy interventions that aim to enhance land tenure security, especially in high potential areas for more socio-economically optimal outcomes of the interventions.

Promoting youth engagement in agriculture through land titling programs: Evidence from Tanzania

“…These findings suggest that youth who have already secured their dwelling land tenure are more likely to title their agricultural land plots due the possible exposure to similar procedures for agricultural land title acquisition. This finding is consistent with the notion that secure land tenure promotes investment in land and leads to increased productivity [ 51 ].…”

“…Specifically, youth with formal land titles spend significantly more time (21.728 h per week) in the farm, equivalent to 24% more hours per week on farming, compared to those without land titles. One possible explanation for this result could be that land title provides youth with greater security and confidence in investing in their farms [ 51 ]. With formalized land tenure, they may be more likely to make long-term investments in their farms, such as purchasing equipment, improving soil fertility, or growing high value short-term or perennial crops which could result in higher productivity and income gain in agriculture.…”

“…Moreover, it's possible that those who have access to land title ownership may come from families with higher socio-economic status, which could also be linked to higher educational attainment. Msangi et al [ 51 ] found that a relatively higher proportion of titled plots belong to more educated household heads than those without title, the main reason being that individuals with higher levels of education may be more not only capable of navigating the bureaucratic complexities of Tanzania's land titling systems but also are likely to have greater access to opportunities for remunerative formal wage employment.…”

“…The value for the marginal effect is 0.006, with a high level of statistical significance at the 1% level. This suggests that larger youth households are more inclined to prioritize obtaining secure land tenure, aiming to ensure their sustained well-being over time [ 51 ]. This trend could also be influenced by the cultural and societal significance attached to land ownership in many Sub-Saharan African countries, where possessing land is closely linked to social identity, economic stability, and community status [ 46 , 1 ].…”

“…Moving forward, our analysis as displayed in Table 3 unveils a noteworthy observation: a negative impact (with marginal effect value of −0.024) linked to the distance between the nearest market center and farm plots on youth land titling choices. This implies that youth are potentially unwilling to pursue land titling for plots situated farther away from market centers due to low competitiveness and potential for agricultural investments associated with plots distant from market hubs [ 51 ]. This is largely due to the inherent expense of accessing factor and product markets, leading to escalated production costs [ 56 ].…”