Legal Knowledge And Economic Development: The Case Of Land Rights In Uganda
| Author | Klaus Deininger; Daniel Ayalew; Takashi Yamano |
| Profession | World Bank, Washington DC; Foundation for Advanced Studies in International Development (FASID), Tokyo |
| Pages | WPS3868 |
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Klaus Deininger, 1818 H St. NW, Washington DC, 20433; Tel 202 4730430, fax 202 522 1151, email kdeininger@worldbank.org. We thank Dick Sserunkuuma and George Omiat for invaluable assistance in collecting the data and Rexford Ahene, Clarissa Augustinus, Frank Byamugisha, Gershon Feder, Songqing Jin, Richard Oput, and seminar participants for valuable comments. Funding from the Japanese Consultant Trust Fund, the DFID- World Bank collaborative program on land policy, and the World Bank"s Gender Trust Fund is gratefully acknowledged.
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There are few issues on which neoclassical development economists seem to be able to agree as easily as the importance of secure property rights. Giving secure land rights to households has been shown to increase land-related investment, augment land values, reduce the level and likelihood of conflict, and spur economic participation. It will also provide a basis for reallocating an important factor of production to more efficient users and, if accompanied by a low-cost and formal means of verifying land ownership status, improve credit access (de Soto 2000). Based on this view of formalizing property rights as a key element for expanding the rule of law and reducing poverty, policy-makers all over the world have spent significant resources on programs to formalize land tenure, award title to land, and establish the administrative infrastructure to maintain the records created in this process.
However, empirical evidence concerning the impact of traditional methods to increase land tenure security in Africa is rather mixed (Bruce and Migot-Adholla 1994, Besley 1998). In fact, a large number of rather ineffective interventions (Atwood 1990) led some to characterize efforts to increase tenure security as "unimportant" or even dangerous (Pinckney and Kimuyu 1994) while prompting others to warn against "institutional midwifery" that would combine an overly teleologic worldview with unrealistic perceptions about the ability to transfer blueprints between countries (Platteau 1996, Sjaastad and Bromley 2000a). African land tenure institutions are subject to extraordinary strains arising form a major economic transition and urbanization, demographic and ecological pressures, and recently the tragedy of HIV/AIDS (Andre and Platteau 1998, Deininger and Castagnini 2005). Given the limited outreach of formal tenure systems (Oosterberg 2002), the main burden falls on customary institutions. Even though these have proven to be quite adaptive in the past, their ability to deal with gender and inter- ethnic conflict, and to maintain traditional structures of control in an increasingly impersonal "modern" environment can not be taken for granted. In fact, such limitations have led to problems related to gender discrimination (Khadiagala 2001, Tripp 2004), wealth bias (Goetz 2002, Peters 2004), and corruption (Fitzpatrick 2005).
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Recognition of the limited success of traditional approaches has given rise to a more nuanced approach that is aware of the multi-dimensional nature of land rights which is unlikely to be captured by a simple "title-no title" dichotomy. It views institutional change as a process that will proceed at different speeds in different environments even within the same country and where clear rules and mechanisms for enforcement will be as important as the substantive content of rights (Deininger 2003). In this spirit, many African countries have recently revised their land legislation to help establish land tenure regimes offering greater tenure security to groups who have traditionally been left out and arrangements that can be flexibly adapted to local conditions (Toulmin and Quan 2000). The multi-faceted importance of land polices for growth and equity makes analysis of the impact of such legal changes that could identify lessons for others of great interest. However, while there are a growing number of descriptive accounts, we know of no study that aims to evaluate the impact of such changes.
In this paper, we use the case of Uganda to address this issue. We go beyond existing literature in two respects, by explicitly distinguishing tenure security from transferability, and by introducing an objective measure of households' awareness about the provisions of the new law. The former arises from the need to distinguish between different types of formal and informal rights while the latter recognizes that knowledge about provisions contained in new legislation is a necessary, though not sufficient, condition for laws to have an impact. Availability of data from two otherwise comparable groups of communities, one of which was subject to sensitization by government officials in preparation of a pilot for systematic adjudication, provides an exogenous source of variation. To the extent that this allows us to consider knowledge as exogenous, we are able to derive an estimate of the "value" of legal change. The paper is organized as follows. Section two reviews literature measuring tenure security and assessing the economic impact of interventions that aim to increase the security of producers' land rights and derives the framework underlying our econometric estimation. Section three links this general debate to Uganda by highlighting the nature of the country's land tenure system and the changes in tenure security brought about by the new land law. This is followed by a description of the data used and a range of basic descriptive statistics. Section four presents results regarding the impact of knowledge as well as other factors on land-related investments, the efficiency of agricultural production, and self-assessed land sales. Section five draws out implications for policy and further research.
This section introduces the variables to represent the different elements of interest and provides the justification for distinguishing tenure security from transferability. Relating our variables to the existing literature and the results obtained therein, we draw out implications and discuss the specification and framework for testing these relationships econometrically.
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The empirical link between greater tenure security and transferability of land and incentives for investment and efficiency of resource use rests on three arguments. First, security of rights, i.e. a reduction in the probability of being evicted or otherwise losing land rights has been shown to provide land users with greater assurance that they will be able to enjoy the fruits of their labor, thus encouraging them to make long-term investments and manage land in a sustainable fashion (Besley 1995). Having land rights defined clearly and accessible enforcement institutions available reduces the probability of unproductive spending on conflict, something that has been shown to have far-reaching impacts on productivity as well as equity (Deininger and Castagnini 2005). Second, adding the right to transfer land to others, either through rental or sale, encourages investment as it makes it easier to liquidate such investment in case of an exogenous shock (Deininger et al. 2005). It also constitutes an essential precondition for transactions that can help bring land to more efficient uses, thus maximizing output and allocative efficiency and creating the preconditions for labor to move from agriculture to non-agricultural pursuits in the broader context of economic development (Kung 2002). With rapid economic transition, e.g. at the urban fringe or in areas of rapid commercial expansion, and the associated increase in the number of transactions, ways of ensuring the legitimacy of land transfers and eliminate incentives for opportunistic behavior by one of the contracting parties have been shown to be critical to (Lavigne Delville 2002). Finally, having a formalized and low-cost way to unambiguously identity land owners without the need to physically inspect the parcel, enquire with neighbors, or conduct an extensive search of land records, allows the use land as collateral. This will, in turn, be critical to facilitate financial market development and the emergence of more sophisticated financial instruments that draw on the abstract representation of land rights provided by titles (de Soto 2000).
Differentiating elements of property rights in this way illustrates two points. First, although they do not form a necessary evolutionary sequence, different elements build upon each other and the institutions to support them become increasingly more sophisticated and costly to implement (Sjaastad and Bromley 2000b). Second, any land tenure regimes defines a multi-dimensional bundle of rights, the content of which often differs depending on local circumstances. More disaggregated information on the individual "sticks" in this bundle will be required to accurately assess the impact of specific rights. In fact, the high variability in the results from empirical studies aiming to explore the impact of title (Pinckney and Kimuyu 1994, Migot-Adholla et al. 1994, Roth et al. 1994) can be interpreted as resulting at least partly from omission of "lesser" rights to transfer land with or without permission by the lineage or a finer gradation of tenure security linked to this arrangement in specific contexts. For example...
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