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Large-Scale Land Acquisitions and
Rural Development:
Empirical Evidence from Ethiopia
Giulia Barbanente – Erasmus University of Rotterdam
Emma Aisbett – University of Hamburg
Theoretical Framework(s):
• The enclosure movement
(Cohen and Weitzman, 1975)
• Evolutionary theory of property rights
(Platteau, 1996)
• A welfare enhancing framework
(Deininger et al. 2011)
Ethiopia
• Property rights setting
•
•
The constitution
Certification reform
• Promotion of land acquisitions
•
•
•
Land bank
Financial incentives for investors
Standardized contracts
• The case of Gambella
•
•
•
Top recipient of land acquisitions in Ethiopia
32% of the region ‘suitable for investment’
Displacement of indigenous populations
• Contracts of land acquisition...
Contracts of land acquisition
 Low price of land
 3-year grace period before payment
 25 year contract with renewal option
 ‘Full and exclusive use’ of land to the
investor
 Vague environmental requirements
 Rural populations or
subnational/regional authorities not
mentioned in the contract
The dataset: sources
• Land Matrix land acquisitions
•
•
•
•
Year of signature of the contract
Location (regional level)
Size of land acquired (hectares)
Nationality of the acquirer
• LSMS-ISA rural development
•
•
4,000 households in rural Ethiopia
Two rounds of interview: 2011 and 2013
• Ethiopian National Statistical Agency
Variables
•
•
Dependent variables at the household level
• Field:
• Area (hectares)
• Value of field if rented to 3d party(Birr)
• Certification (y/n)
• Credit access:
• Loans obtained (y/n)
• Value of loans obtained (Birr)
• Household expenditure:
• food expenditure in the past 7 days
• Non-food expenditure in the past year
• Work:
• Agricultural work (hrs/w)
• Other work (hrs/w)
• Wage work (hrs/w)
Control variables: household size, gender and
education, distance from market, elevation and
annual precipitation
Econometric approach
• Gambella and Benishangul-Gumuz:
‘treatment’ regions
• Matching with Coarsened Exact Matching
• Dependent variable: outcome of each
variable in 2013 in the treatment regions
relative to the outcome in the other regions .
2011 value as control
• Results with and without geographic
controls
• Quantile regressions applied to the matched
data to investigate distributional
implications
Results
Outcomes in regions with substantial land acquisitions since 2010
relative to the other regions: weighted least squares (SATT) estimated
for matched samples
Results
Outcomes in regions with substantial land acquisitions since 2010
comparison to other regions: 25th percentile estimates for matched
sample
Results
Outcomes in regions with substantial land acquisitions since 2010
comparison to other regions: 75th %ile estimates for matched sample
Conclusion
• Centrality of Ethiopian property rights system in attracting land
acquisitions
•
In Gambella indigenous populations are displaced while the
region is at the center of the Ethiopian policy to attract foreign
investors
•
Standardized contracts offer favorable conditions to foreign
investors
•
Quantitative results show significant decrease in average field
area, number of certificates, land value and agricultural work in
Gambella and Benishangul
•
Decrease in field area and higher food expenditure strongest in
the 25th percentile, increased non-food expenditure and
lower agricultural work for the 75th percentile
Way forward
• Strengthening institutional framework for
Ethiopia
• Improve explanation of empirical section
• Better connect results to the theory
• Extend quantitative research to other
countries for comparative perspective
Thank you
[email protected]
Preliminary observations: land area
Average
25 percentile
75 percentile
Preliminary observations: land value
Average
25 percentile
75 percentile
Preliminary observations: household expenditure
Average
25 percentile
75 percentile
Preliminary observations: agricultural work
Average
25 percentile
75 percentile
Preliminary observations: agricultural work
Average
25 percentile
75 percentile