Land tenure and investment in African agriculture : theory and evidence

Donor agencies such as the World Bank and A.I.D. now support the individualization of land tenure, claiming that it would increase tenure security and agricultural investment. This article uses economic theory and empirical evidence from Kenya, Uganda, and Zimbabwe to analyze the individualization hypothesis. Two major weaknesses in the hypothesis are identified. First, the economic theory used to analyze land tenure is an overly narrow application of economic principles. A broader theoretical perspective that uses some elements of institutional economics and the theory of imperfect markets would provide more insight into the behavioral response to the shift from traditional tenure to individualized tenure. Second, whether individualization is preferable to the evolving system of traditional tenure in attaining specific agricultural development objectives is an empirical question that cannot be resolved by theory alone. That is, the effects of individualization are determined by the context in which the tenure policy is applied. The paper recommends that policymakers consider alternatives to individualization, including policies that simply remove impediments to the evolution of traditional systems. (Author abstract, modified)