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Land Tenure, Investment Incentives, and the Choice of Techniques: Evidence from Nicaragua

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  • Oriana Bandiera

Abstract

The choice of cultivation techniques is a key determinant of agricultural productivity and has important consequences for income growth and poverty reduction in developing countries. Household data from Nicaragua are used to show that the choice of cultivation technique depends on farmers' tenure status even when techniques are observable and contractible. In particular, tree crops are less likely to be grown on rented than on owner-cultivated plots. Further evidence indicates that the result follows from landlords' inability or unwillingness to commit to long-term tenancy contracts rather than from agency costs due to risk aversion or limited liability. Copyright The Author 2007. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

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Bibliographic Info

Article provided by World Bank Group in its journal The World Bank Economic Review.

Volume (Year): 21 (2007)
Issue (Month): 3 (May)
Pages: 487-508

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Handle: RePEc:oup:wbecrv:v:21:y:2007:i:3:p:487-508

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Cited by:
  1. Deininger, Klaus & Ali, Daniel Ayalew & Alemu, Tekie, 2008. "Impacts of land certification on tenure security, investment, and land markets : evidence from Ethiopia," Policy Research Working Paper Series 4764, The World Bank.
  2. Deininger, Klaus & Goyal, Aparajita, 2010. "Going digital : credit effects of land registry computerization in India," Policy Research Working Paper Series 5244, The World Bank.
  3. Luis H.B. Braido, 2005. "Risk and Insurance in Sharecropping," Risk and Insurance 0508002, EconWPA.
  4. Ali, Daniel Ayalew & Deininger, Klaus & Goldstein, Markus, 2011. "Environmental and gender impacts of land tenure regularization in Africa : pilot evidence from Rwanda," Policy Research Working Paper Series 5765, The World Bank.
  5. Paul Castãneda Dower & Tobias Pfutze, 2012. "Specificity of Control: The Case of Mexico's Ejido Reform," Working Papers w0188, Center for Economic and Financial Research (CEFIR).
  6. Liscow, Zachary D., 2013. "Do property rights promote investment but cause deforestation? Quasi-experimental evidence from Nicaragua," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 241-261.

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