Formalization without certification? Experimental evidence on property rights and investment

Abstract

We present evidence from the first large-scale randomized-controlled trial of a land formalization program. We examine the link between land demarcation and investment in rural Benin in light of a model of agricultural production under insecure tenure. The demarcation process involved communities in the mapping and attribution of land rights; cornerstones marked parcel boundaries and offered lasting landmarks. The tenure security improvement through demarcation induces a 23 to 43 percent shift toward long-term investment on treated parcels. We explore gender and parcel location as relevant dimensions of heterogeneity. We find that female-managed landholdings in treated villages are more likely to be left fallow-an important soil fertility investment. Women respond to an exogenous tenure security change by shifting investment away from relatively secure, demarcated land and toward less secure land outside the village to guard those parcels.

Formalizing land rights can reduce forest loss: Experimental evidence from Benin

“…First, the program may have increased farmers' investment in existing plots, increasing productivity and, hence, reducing the need to clear further land. This is supported by the results of two other studies that found the program led to increased investment (14,27). We also find evidence consistent with this in our analysis of community surveys, which are reported in Table 2.…”

“…In 2009, the government of Benin rolled out an experimental scale-up of the Plans Fonciers Ruraux (PFR) program with the objective of both increasing agricultural production and protecting natural resources. The program is a bundle of several interventions broadly serving to formalize and support traditional local land governance systems, lying at the frontier of new land policies being developed in Africa (14).…”

Land Registration, Adjustment Experience, and Agricultural Machinery Adoption: Empirical Analysis from Rural China

“…First, we found no significant impact of land registration on the adoption of agricultural machinery. This is consistent with Brasselle et al [40], Beekman and Bulte [37], Domeher and Abdulai [38], Lovo [36], and Goldstein et al [39], who report that property rights security may not obviously affect agricultural input. Second, there was a negative impact of adjustment experience on the adoption of agricultural machinery.…”

“…Previous studies disagree about whether land registration motivates farmers to increase their agricultural investment. While some say that it does [26,[31][32][33][34][35], others suggest that the effect is not obvious [36][37][38][39][40]. In reality, the Chinese government is trying to stimulate agricultural investment by stabilizing land rights.…”

The Effects of Land Title Registration on Tenure Security, Investment and the Allocation of Productive Resources : Evidence from Ghana

“…Field (2007) documented important labor supply effects of improved land property rights as time otherwise used to "guard" property against expropriation in urban Peru. Goldstein et al (2018) find that women farmers respond to a land formalization program by moving production away from relatively secure towards less secure land in order to guard those parcels.…”