Property rights and prosocial behavior: Evidence from a land tenure reform implemented as randomized control-trial

Abstract

I study the first case of a large-scale land tenure reform implemented as a randomized control-trial in rural Benin to isolate the effects of formalizing property rights on trust and cooperation. The reform transformed informal and collective land tenure by registering individual rights over land and making it possible to sell, collateralize, and defend these rights in court. Seven years after the intervention, results of a public goods game and a trust game show that cooperation and trust substantially increase but only for participants in villages served by paved roads who can benefit from access to institutions and government services introduced by the reform. Conversely, in more isolated communities characterized by larger costs to access institutions, the reform significantly reduced prosocial behavior. An analysis of possible mechanisms suggests that subjects in isolated villages perceived the reform as facilitating institutional shopping for wealthy individuals, thus sparking resentment against the replacement of the customary conflict resolution system and increasing the support for banning the land market.