Does Title Increase Large Farm Productivity? Institutional Determinants of Large Land-Based Investments’ Performance in Zambia
The importance of well-functioning land markets for structural transformation via labor movements to the non-agricultural sector, growth in farm size, and the ability to use land as collateral for credit and has long motivated Government efforts at reducing the transaction costs of registering and t...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/334231624025654988/Does-Title-Increase-Large-Farm-Productivity-Institutional-Determinants-of-Large-Land-Based-Investments-Performance-in-Zambia http://hdl.handle.net/10986/35822 |
| Summary: | The importance of well-functioning land markets for structural transformation via labor movements to the non-agricultural sector, growth in farm size, and the ability to use land as collateral for credit and has long motivated Government efforts at reducing the transaction costs of registering and transferring land and supporting large farm formation. Rigorous evidence on the effect of such measures has, however, been scant. This paper explores the impact of institutional arrangements on productivity for a representative sample of 3,000 large farms in Zambia, one of the earliest African adopters of such policies to close this gap. Instrumental-variable (IV) regressions suggest title has no effect on productivity, investment, or credit access and reduces rather than improves rental market participation. Measures to harness Zambia’s potential include improving title quality through exclusive use of digital registries; imposition of a land tax on state land to incentivize productive rather than speculative land use and cancel outdated legacy documents; and greater involvement of traditional authorities in record maintenance and land management, possibly via land tax revenue sharing. |
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