Impacts of Large Scale Foreign Land Acquisitions on Rural Households: Evidence from Ethiopia

Abstract

The impact of large-scale foreign land acquisitions (“landgrabs”) on rural households in developing countries has proven a highly contentious question in public discourse. Similarly, in the academic literature, evolutionary theories of property rights and enclosure models make diametrically opposed predictions about the impacts on holders of informal property rights of increased demand for land. The current paper uses a multi-method approach to provide much-needed empirical evidence on the impacts of large-scale land acquisitions in Ethiopia. We use basic economic theory to structure evidence from disparate sources, including: a survey of existing qualitative evidence; original legal analysis of specific foreign land-acquisition contracts; and original econometric analysis of new World Bank household survey data. The evidence from all three methods suggests large-scale foreign land acquisitions are associated with losses of land and resource rights for rural households. While there is some compensating evidence of increased household expenditure, it is difficult to say whether this increase is caused by growth in incomes or in implicit prices.