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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