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Land Rights, Power and Trees in Rural Ethiopia


  • Stefan Dercon
  • Daniel Ayalew


This paper provides evidence from one of the poorest countries of the world that the institutions of property rights, in particular related to land, are of crucial importance for investment and growth. In Ethiopia , with all land state-owned, the threat of land redistribution never appears far from the agenda. A constitutional reform in 1996 has promised long-term user rights, and land rental and leasing have been made legal, but land rights remain restricted and the perception of continuing tenure insecurity remains quite strong. Using a unique panel data set including data on land right perceptions over time, this study investigates whether land rights affect household investment decisions, focusing on land allocation to coffee tress and other perennial crops. The period of investigation covers a period of change in land right perceptions after a constitutional change, a large scale but unexpected land redistribution episode in one region and a start to land registration in another region, offering exogenous impact of the policy turmoil, including linked to the local political economy of land transfer rights on long-term investment in Ethiopian agriculture, contributing to the low returns from land and perpetuating low growth and poverty.

Suggested Citation

  • Stefan Dercon & Daniel Ayalew, 2007. "Land Rights, Power and Trees in Rural Ethiopia," CSAE Working Paper Series 2007-07, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2007-07

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    Cited by:

    1. Alan de Brauw & Valerie Mueller, 2012. "Do Limitations in Land Rights Transferability Influence Mobility Rates in Ethiopia?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(4), pages 548-579, August.
    2. Bellemare, Marc F., 2010. "The Productivity Impacts of de Jure and de Facto Land Rights," MPRA Paper 23639, University Library of Munich, Germany.
    3. repec:eee:agisys:v:154:y:2017:i:c:p:53-62 is not listed on IDEAS
    4. Marc F. Bellemare, 2013. "The Productivity Impacts of Formal and Informal Land Rights: Evidence from Madagascar," Land Economics, University of Wisconsin Press, vol. 89(2), pages 272-290.
    5. Ann-Sofie Isaksson, 2015. "Unequal Property Rights: A Study of Land Right Inequalities in Rwanda," Oxford Development Studies, Taylor & Francis Journals, vol. 43(1), pages 60-83, March.

    More about this item


    property rights; land; investment; agriculture; Ethiopia; Africa;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment


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