Land titles, tenure security, and agricultural productivity : theoretical issues and an econometric analysis of mediating factors in Njoro Division, Kenya

Tenure reform, by enhancing individual ownership security, is expected to increase agricultural investment and improve the performance of the agricultural sector. A pioneering study of Thailand suggests that these expectations, while clearly ambitious, are entirely reasonable. Land registration and titling programs are not novel in sub�Saharan Africa. Tenure reform carried out under the Swynnerton plan in Kenya in the l950"s gives that country claim to substantial experience with such programs. Perhaps more importantly, Kenya exhibits significant land scarcity; thus the economic value of land, and consequently the potential returns to land titling programs, should be relatively high. Using a cross�sectional farm level data set from Kenya"s highly commercialized Njoro area, this paper analyzes the impact of tenure status on agricultural productivity. The goals of this analysis are twofold. (1) This paper aims to provide a clear and general overview of the problems hampering easy identification and measurement of the impact of tenure reforms. These problems are not methodological, but are rooted in economic behavior and market structure. A clear understanding of them will be of value in designing land titling programs, and will also shed light on the controversy over whether such programs prompt land concentration over the longer term. (2) Applying lessons derived from this first exercise, the paper"s second goal is to evaluate the productivity effects of those tenure patterns which have resulted from Kenya"s particular experiences with land titling efforts. This paper is organized as follows. Section 1 uses descriptive statistics from the Njoro dataset to describe the range of factors which temper the impact of tenure status on productivity and may hamper the identification of tenure reform program effects. Section 2 performs a series of preliminary or "naive" analyses of the Njoro data. Criticism of these analyses structures presentation of general theoretical concerns about the way tenure security influences agricultural performance. Section 3 substantiates the empirical relevance of these theoretical concerns by demonstrating the importance of non�tenure factors on agricultural performance. Section 4 then presents a unified analysis of the land title issue. Finally, in Section 5, the report concludes that land tenure reform will likely prove ineffective if conducted in a vacuum: title status appears to be less important in the determination of farm productivity than do factors such as farm size and mode of access to land, together with their implications for access to markets, non�farm income, and wealth. (Author abstract)