Communal land and agricultural productivity

Charles Gottlieb () and Jan Grobovsek ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper quantifies the aggregate impact of communal land tenure arrangements that prevail in Sub-Saharan Africa. Such tenure regimes limit land transferability by prohibiting sales, subjecting rented-out land to the risk of expropriation, and redistributing it to existing farmers in a progressive fashion. We use a general equilibrium two-sector selection model featuring agents heterogeneous in skills to compute the resulting occupational and operational choices as well as land allocations. The quantification of the model is based on policies deduced from Ethiopia. In the Sub-Saharan African context we find that such policies substantially dampen nominal agricultural relative to non-agricultural productivity, by 25%. Real relative agricultural productivity, however, only falls by 4% since cross-sectoral terms of trade adjust strongly, with excess agricultural employment only amounting to some 1.5 percentage points. The loss in GDP is small, about 2%. That serves as a reminder that ostensibly highly distortionary policies need not have substantial bite when individuals strategically adjust to them and equilibrium prices adapt. For example, the model predicts that at given prices 62% of farmers in an economy such as Ethiopia would leave farming if tenure were secured, casting land insecurity as a major obstacle. Yet only 9% would actually switch sectors after price adjustments are factored in.

Keywords: Agricultural Productivity; Growth and Development; Misallocation; Land. Markets; International Bond Markets; Mutual Funds. (search for similar items in EconPapers)
JEL-codes: O1 O13 O40 O55 Q15 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2015-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://eprints.lse.ac.uk/86311/ Open access version. (application/pdf)

Related works:
Journal Article: Communal land and agricultural productivity (2019)
Working Paper: Communal Land and Agricultural Productivity (2016)
Working Paper: Communal Land and Agricultural Productivity (2015)
Working Paper: Communal Land and Agricultural Productivity (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:86311

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