Tenure security for whom? -- an econometric analysis of the differential impacts of land policy in 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 by Feder et al. (1988) 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 cross-sectional farm level data 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. First, the paper tries to lay out in a clear and general way the problems which hamper easy identification and measurement of the impact of tenure reforms. It should be stressed that these problems are not merely methodological, but are rooted in economic behavior and market structure, and a clear understanding of them should be of and value for land titling program design and research. In addition, integrating the analysis of land titling with consideration of market structure and other factors that influence titling"s effects shed light on the issue of whether such programs prompt land concentration over the longer term. 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. This paper is organized as follows. Section 1 uses descriptive statistics from the Njoro data to describe the many factors which temper the impact of tenure status on productivity. Section 2 performs a series of preliminary or "naive" analyses of the Njoro data, and discusses these with respect to general theoretical concerns about influence of tenure security on 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, we conclude 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, modified)