The effects of land privatization on pasture productivity in south-eastern Kazakhstan

Based on rich cadastral data we examine the effects of three decades of land privatization on pasture productivity in southern Kazakhstan. We assemble a balanced panel of 16 thousand plots representing cadastral parcels on pastures over 24 years along with their date of ‘allocation’ (formal registration in the cadastre) and tenure category, as well as a set of remotely sensed geographic and climatic variables. The causal effect of land allocation to users is isolated from other factors driving biomass change using a difference-in-difference design with a staggered absorbing treatment and heterogeneous treatment effects accounting for spatial spillovers. Results show that allocation of leasehold titles to individual farmers has a strongly negative effect on the pasture vegetation measured by annual peak Normalized Difference Vegetation Index (NDVI), comparable to a drought occurring once in 25 years. We explain this by increasing vegetation offtake that follows land allocation to individual farmers, who invest by increasing their herd size. This effect is exacerbated by spillover from the allocation to individuals of adjacent parcels, reducing available grazing for former users. The negative spillovers suggest that the ability of the tenure system to redistribute land is being tested now by rapidly increasing livestock numbers. We warn that currently restricted land markets with imperfect institutions impede the efficient allocation of pasture in Kazakhstan and may lead to pasture deterioration, whilst livestock numbers increase.