The impact of land property rights interventions on investment and agricultural productivity in developing countries

Additional Info

  • Authors: Steven Lawry, Cyrus Samii, Ruth Hall, Aaron Leopold, Donna Hornby, Farai Mtero
  • Published date: 2014-01-02
  • Coordinating group(s): International Development
  • Type of document: Title, Protocol, Review
  • Volume: 10
  • Issue nr: 1
  • Category Image: Category Image
  • Title: The impact of land property rights interventions on investment and agricultural productivity in developing countries
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Secure and predictable access to land as a productive resource is key to the livelihoods of millions of farmers around the world. Secure land tenure enables farmers to invest in long-term improvements to their farms and soils in the expectation that they will reap the benefits of those investments without fear that their land be confiscated arbitrarily. Formal and informal land rights are therefore seen as key to improving the conditions of the poor in developing countries in terms of economic growth, agricultural production, food security, natural resource management, gender-related inequalities, conflict management and local governance processes more generally.
Existing evidence on the effects of land property rights interventions is mixed and to a considerable degree dependent upon the initial land rights conditions. In many cases where existing rights are already secure through stable informal and customary systems, the formalization of rights through land titling, one form of strengthening rights, may have little impact. In other cases, mechanisms for formalizing property rights where no formal institutions had previously existed are argued to have increased productivity and slowed forest loss.
Much of the literature underscores the complexity of attribution and the importance of context to understanding relationships between security, registration and productivity, and to understanding gender dimensions. They also suggest tenure security alone is not a ‘silver bullet’ leading directly to higher farmer incomes, or that it is solely attributed to tenure reforms– that is, context matters.
No known systematic review or meta-analysis on the relationships between land property rights and productivity or welfare has been undertaken to date, and concerns have been highlighted by others over inconsistent effects and design limitations in some studies of tenure reform. This has therefore provided strong motivation for a systematic review that serves as an independent review of the quality and reliability of findings offered in the available literature. In particular, this review sought to examine the specific impacts of two types of land rights interventions:
• Conversion of communal or non-demarcated rural land to freehold title and registration of such rights in an official registry; and
• Statutory recognition and codification of customary or communal rural land rights, and registration of these rights in an official registry.

The objectives of the review are as follows: 1. to understand the quantitative and qualitative impacts of interventions to strengthen land property rights on agricultural and livelihood outcomes in rural areas of low and middle income countries 2. to assess whether these effects are different for men and women, and under what circumstances 3. to assess specific mechanisms that enable or limit productivity improvement (barriers and facilitators)

The search strategy involved searches of 16 online databases, grey literature, hand searches of 27 key journals and bibliographic snowballing. The searches were carried out in October 2012 and the non-impact evaluation, or qualitative, results were revisited again in July of 2013 after feedback on an initial draft of the report.

The review synthesizes quantitative evidence only from studies that: used randomized experiments or quasi-experimental methods employing strategies for causal identification and using some method for removing biases due to non-random assignment of treatment; estimated the impact of either conversion to freehold title or statutory recognition of land rights; measured at least one intermediate outcome defined in the study, or final outcomes (productivity of land use, welfare of pre- and post-policy rights holders in terms of income/ consumption or poverty, gender-based welfare outcome measures, or income/ consumption or poverty); estimated impacts with outcome data measured at the individual or household level; were undertaken in developing countries (as defined by the World Bank); and that measured outcomes at some point between 1980 and 2012. The qualitative criteria aimed to provide context and address possible answers to how and why interventions may or may not have been successful overall or for certain groups in particular. Eligibility of non-impact evaluation studies was determined via a two-stage screening process to facilitate the review of only the most relevant studies while quickly filtering out inappropriate research based on the Critical Skills Appraisal Programme (CASP) tool. This involved similar criteria to the quantitative search, albeit with different methodological requirements. Specifically, studies were filtered based on clearly defined research objectives, links to relevant literature, context and sample selection, data collection, methods, as well as quality and relevance of their analyses. Other types of reform were not eligible for inclusion in the review, including those relating to justice, capacity-building, outreach, and inheritance.

Data extraction sheets were devised to facilitate comparison of interventions discussed in studies meeting the inclusion criteria. For quantitative studies, estimated effects on any of the intermediate and final outcomes were extracted. For all studies, quotes from the study on how the intervention seemed to have affected any of the intermediate outcomes were extracted.
For outcomes measured in terms of monetary value (productivity, value of credit received, and consumption), we carried out our quantitative analysis in monetary terms as well. When natural logarithms were not used (for example, value of credit received), we used a standardized difference that standardizes the outcome relative to the control group standard deviation. For binary outcome measures (indicators for long term investment, formal borrowing) of treatment effects in terms of absolute changes, a variety of analyses were carried out including consideration of the natural logarithm of the risk ratio. When a study included multiple estimates of the same treatment effect, we used the one judged to have minimal risk of bias.
Quantitative studies were coded in terms of risk of bias in estimating impacts, and were assessed using the IDCG Risk of Bias Tool. Because of high inter-study heterogeneity in effect sizes, random effects synthesis and random effects meta-regression on moderator variables were used. Furthermore, given the low number of studies (20 quantitative studies), only bivariate meta-regressions of effect estimates on moderators were performed.
For the qualitative component of this review, an aggregative metasummary approach was undertaken, focusing on quantitatively identifying the frequency of qualitative results found in the research via a five stage process of findings extraction, category grouping, theme abstraction, identification of frequency and intensity of findings, and results interpretation. This approach avoids the synthesis of concepts and creation of lines of argumentation.

The quantitative results presented are based on a corpus of 20 studies focusing on the impact of land rights recognition or formalization at the level of the farming household. In the Latin American and Asian cases, recognition typically took the form of freehold titling. The African studies assessed programs where rights were recognized through provision of freehold title, through formal registration of customary rights, or through conversion of customary rights to long-term leasehold rights. We were not able to identify any quantitative evidence of sufficient quality examining the investment or productivity effects of statutory recognition of customary land rights. The studies on freehold titling provide evidence mostly consistent with conventional economic theories of property rights. The limited quantitative evidence base suggests benefits of land tenure interventions, measured in terms of productivity and consumption expenditure or income, and suggests that long-term investment and increases in perceived tenure security are plausible channels through which tenure recognition may contribute to welfare for those who receive title. The credit channel finds no support, although the evidence base is very thin. When looking at the contextual factors that moderate the effects of tenure recognition, we find gains in productivity are significantly greater outside Africa and in wealthier settings, although strong correlation between the two makes it impossible for us to determine whether this is a “wealth effect,” or something we characterize as the “Africa effect”, defined as the effect of relatively high pre-existing levels of tenure security that characterize customary tenure arrangements. The evidence base is too thin to say how productivity and investment effects are moderated by our other contextual factors of interest, including length transpired since the intervention, levels of democratic governance, population density, agricultural systems, or cash crops. The quantitative evidence base has very little to say about consequences of such policies for social outcomes like displacement, conflict, or gender equality. Thus, while tenure recognition appears to improve land productivity and the material welfare of those who have access to registered land, we do not have a clear sense of the dynamics that follow from such policies in terms of overall access to land. We also have no quantitative evidence on policies that certify communal property rights, one of the forms of property rights enhancement that motivated our interest in this review.
The qualitative side of the review analysed nine studies that catalogued a broad spectrum of both positive and negative experiences with land tenure interventions, the diversity of which made it difficult to draw out conclusive trends. They did however confirm that social impacts resulting from tenure interventions can be significant, unpredictable and in some instances have negative consequences such as displacement or diminished property rights for women. While the quantitative studies assess on-farm outcomes of titling beneficiaries only, the qualitative studies consider impact of titling programs on both beneficiaries and the broader population including those who may not have received title. This contradistinction is important to bear in mind. The potential for negative social impacts found in qualitative studies further indicates the importance of assessing broad social outcomes and particularly in collecting data on those who may lose out as a result of land property rights reforms.

The findings of this systematic review underscore the importance of tenure security. In addition to being a pre-condition to farm investments that foster productivity and increase farm incomes, growing investor interest in farmland as well as contextual changes– population growth, changing settlement patterns, political conflict, environmental degradation and climate change– are among the factors underscoring the need to better secure tenure rights in developing countries. In principle, tenure security can be delivered through tenure conversion, from informal tenure to freehold title, but also by extending greater legal recognition to informal or customary tenure arrangements, the latter approach being especially relevant to sub-Saharan Africa. Either approach has potentially different measurable effects on productivity and investment, though the effects in both cases may be positive. Any tenure reform may have negative social effects, including on women’s access to land and on displacement of the poor or others facing social and financial barriers to participating in the reformed regime for assigning rights.
Though tenure recognition improves productivity in settings where title is the dominant means for securing land rights, as is the case in much of Latin America and Asia, productivity gains may take time to become apparent, the effects may vary substantially across cases, and they likely depend on other supportive conditions, such as the performance of credit, input supply, and product markets.
The study results draw attention particularly to the significant gains in productivity and investment in agriculture in the Latin American and Asian cases due to tenure formalization, and the comparatively weak effects attributable to formalization in Africa. To explain these regional differences we propose the idea of the “Africa effect”, based on the fact that most farms in sub-Saharan Africa are held under customary tenure arrangements, which generally provide long-term tenure security to qualified members of land-holding families, groups or communities. As such, customary tenure may provide a level of pre-existing tenure security without formalization, something that is not typical in Latin America or elsewhere. As a result, gains to formalization in Africa may be more limited because tenure insecurity, which formalization seeks to remedy, is often not present to the degree that designers of reform programs assume.
Low gains to investment and productivity in Africa following tenure formalization may also be explained by the low levels of wealth and income of African farming families in comparison to those studied in Latin America or Asia. Understanding the relevance and the relative weight of either effect— the wealth/income effect and the “Africa effect” noted above— in explaining lower levels of investment and productivity following formalization in Africa merits further research.
Our review of qualitative studies and literature on African agriculture suggests levels of rural agricultural productivity in Africa may remain weak due to factors other than tenure insecurity. These factors may include small farm size, the importance of off-farm income to rural households, the high opportunity costs of agricultural labour, and the associated deployment of working-age family members to urban centres for work, among others.
We propose an agenda of needed future research. We believe further research is needed, inter alia, on:
• the relationships between household wealth and income, customary tenure, and investment in agriculture in Africa
• the positive and negative effects of tenure recognition on women’s tenure security in Latin America, Africa and Asia, and the gains or losses in women’s tenure security in comparison to the customary tenure arrangements replaced by tenure formulation in Africa
• the effects on farm-level investments and productivity and the management and productivity of natural resources used in common resulting from tenure reforms extending statutory recognition to customary tenure arrangements.

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