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“Land Grab†or Development Opportunity? The Effect of Transnational Farmland Investments on the Ghanaian Economy

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  • Donggul Choi

Abstract

Transnational investments in farmland in developing economies are recent and controversial. While they bring developmental opportunities including capital deepening, new technology, and employment opportunities, there are also concerns about the dislocation of local farmers and insufficient compensation for land use. This paper investigates how these seemingly conflicting effects interact in the process of economic growth by fitting a dynamic general equilibrium model to Ghanaian data. The differing effects of two common foreign investment activities, grain farming and biofuel production, are investigated. Grain farming investments tend to promote capital accumulation and increase income and consumption over the transition, whereas labor income is adversely affected. Biofuel projects induce the reverse. Results identify the relative labor intensity of technology on foreign†operated farms, which affects the returns to domestic capital and the pace of capital deepening, as a major determinant of the long†term effect of farmland investments.

Suggested Citation

  • Donggul Choi, 2018. "“Land Grab†or Development Opportunity? The Effect of Transnational Farmland Investments on the Ghanaian Economy," The Developing Economies, Institute of Developing Economies, vol. 56(1), pages 3-34, March.
    • Handle: RePEc:bla:deveco:v:56:y:2018:i:1:p:3-34
    DOI: 10.1111/deve.12157
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    References listed on IDEAS

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    Cited by:

    1. Brinkman, Marnix L.J. & Wicke, Birka & Faaij, André P.C. & van der Hilst, Floor, 2019. "Projecting socio-economic impacts of bioenergy: Current status and limitations of ex-ante quantification methods," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    2. Kansanga, Moses Mosonsieyiri & Luginaah, Isaac, 2019. "Agrarian livelihoods under siege: Carbon forestry, tenure constraints and the rise of capitalist forest enclosures in Ghana," World Development, Elsevier, vol. 113(C), pages 131-142.

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