Land Tenure and Investment Incentives: Evidence from West Africa

Abstract

The existing literature on the relationship between property rights in land and adoption of agricultural investments in Africa has given results that are often confusing and contradictory. The present paper makes two clarifying contributions to this literature. First, it pulls together existing studies and investigates whether the results they find have been affected by research methods or local contexts. Studies with small sample sizes and those that control for the endogeneity of land rights are less likely to find a statistically significant link between land tenure and investment. Self-reported tenure security has been a poor predictor of investment outcomes, while transfer rights have had stronger effects in the literature. Second, this paper tests for a relationship between land tenure and agricultural investment in nine data sets from West Africa. While the link between tenure and investment is significant for fallow and tree planting, it is less robust for labor use and other inputs, such as manure or chemical fertilizer.