Klaus Deininger, Daniel Ayalew Ali, Tekie Alemu 05 March 2009

1. Impacts of Land Certification on Tenure Security, Investment and Land Markets: Evidence from Ethiopia (Amhara Region) Klaus Deininger, Daniel Ayalew Ali, Tekie Alemu 05 March 2009

2. Policy environment Evolution of Ethiopia’s rural land policy environment • Feudalist structure followed by nationalization and collectivization in 1975 • 1995 constitution w. guaranteed access • 1997 decentralization of responsibility to regions Reasons for high tenure insecurity • 1997 Amhara redistribution; current debate in Tigray • Urban and agro-industrial expansion (flowers) • Leasing still restricted everywhere except in Amhara region • Will lose land if find off-farm job with permanent income Ethiopia as an interesting case • Huge program (25 mn plots) quite rapidly implemented; with little outside assistance • Turns conventional wisdom on its head • Participatory local process - rather than expert driven • Rights are not alienable - and plenty of remaining policy restrictions • No spatial reference at all – contrary to surveyors

3. Program characteristics Main features • Democratically elected LAC has responsibility • Field-based adjudication process (elders to resolve conflict) • Certificates with holders’ pictures but no map (to be added in 2nd stage) • Very cost-effective ‘1st stage’ (< 1 US$/parcel) Process characteristics (from nation-wide survey) • Public meetings held, LACs with members from most sub-kebeles • High share of field-based adjudication • Only 5% of unresolved conflicts (vs. 20%+ in Thailand) Case study/survey evidence on possible impact • High willingness to pay to replace certificate • Reduction of conflict • Gender (women’s pictures, awareness where stored); polygamy

9. Data and general approach Data sources • 4-round panel (1999, 2001, 2004, 2007) from East Gojam • Some 900 households with 4,000 plots in each round • 3 rounds before implementation, some certified in 4th round Identification strategy • Define villages as treated if certified > 12 months ago • Control for household specific effects • Verify that there is little difference in time-varying effects • Conservative estimate for two reasons • Even in treated villages not all households have certificates • Many households in untreated ones had certificates Expected short-term impacts • Perceived tenure security • Land-related investment (soil conservation measures) • Rental market participation

14. Outcome variables considered Perception of admin. land size change next 5 years • Recent land redistribution (1997) • (Un)compensated expropriation for urban expansion • Both loss and increases are relevant (political pressure) • Question included in all 4 rounds Investment in soil & water conservation structures • Should see a direct investment effect • Existence and new construction • No of hours spent in maintaining/constructing Land rental market participation • Amhara the only region where no constraints in terms of length • Both participation and area transferred

16. Risk of land loss Equation to be estimated use Chamberlain’s method

18. Investment & rental market Plot-level investment equation Household-level rental market participation

23. Policy implications for Ethiopia Ensure sustainability of impacts • Establish mechanisms for regular updating (computerization) • Add spatial element (satellite imagery) • Systematically include CPRs • Demarcation & dealing with encroachment • Rules for internal management • Enforcement mechanisms Enhance benefits through policy changes • Land leasing & off-farm employment • Threat of redistribution/enforcement of LT contracts • External threat from expropriation Explore longer-term effects • Already benefit much beyond cost • But could be much larger (& very cost-effective) • Especially with policy changes