The profits of excludability and transferability in redistributive land reform in central Namibia

Abstract

ABSTRACTPolicies which redistribute property rights to land can improve the well-being of rural households and can have overall growth effects. In many cases, however, land reforms are driven mainly by politically justified objectives. Under such circumstances, little emphasis is placed on whether and, if so, how property rights can increase productivity. Following 18 years of land reform implementation in Namibia, we evaluated 65 beneficiaries in Namibia. We assess to which degree land rights affects their farm income. The study focuses on Namibia’s two main commercial land reform instruments, namely the Farm Unit Resettlement Scheme and the Affirmative Action Loan Scheme. We find evidence that the majority of land reform projects are not profitable. Further, our study confirms the importance of the right to restrict land access compared with the right to transfer. The long-term leasehold contract seemingly provides sufficient incentives to make productive use of the land.