The Profits of Power: Land Rights and Agricultural Investment in Ghana Markus Goldstein, The World Bank Christopher Udry, Yale

Institutions Institutions are not static in purpose nor their impact on the distribution of economic opportunity Institutions  property rights  investment incentives Inequality of property rights  skewed distribution of returns

Our work Looks at this relationship in the context of Ghana’s Eastern Region Complex, negotiable property rights  agricultural productivity Lower productivity for those not connected to the political hierarchy (which includes most women)

Land tenure in W Africa Berry: "the commercialisation of land transactions has not led to the consolidation of land rights into forms of exclusive individual or corporate control comparable to Western notions of private property” Indeed, land "is subject to multiple, overlapping claims and ongoing debate over these claims' legitimacy and their implications for land use and the distribution of revenue“

Agriculture in Akwapim Sources of land: –Chiefs: stool land, dispute resolution, allocation –Lineage (abusua): right to use ancestors land –individual (mostly matrilineal inheritance) –Family-stool nexus Range of contracts Farm mostly maize and cassava Men and women farm separate, multiple plots Shifting cultivations, so fallowing is key investment

The data 2 year rural household survey Around 240 hhs in 4 village clusters, men and women interviewed separately 15 interviews, about 5-6 weeks apart Modular survey (35) with detailed ag production data GPS, Ph and OM Focus groups

Empirical strategy Within hh profits (fallow matters) Determinants of fallow (politics matters) Political economy of land allocation within a matrilineage (need with imperfect information)

Within household production -efficient production predicts that identical plots, within a household, will have identical yields

Land and the matrilineage Allocated land evolved in time of land abundance (no optimal fallow issues) Focus groups: –Abusua allocates on need –Leaving land fallow indicates lack of need Need is private information, fallow is signal Incomplete information (off-farm work, spouse evidence)

Sketch of model of abusua allocation Leadership has obligation to provide land to those in “need” –Have alternate use but also incur costs when enough poor do not get it Need is not-observable (off-farm income opportunities) Cultivation requirement to separate rich/poor, rich won’t sacrifice off-farm to cultivate continuously

Conclusion We agree “the process of acquiring and defending rights in land is inherently a political process based on power relations among members of a social group” (B&C) However, these complex, multiple and overlapping rights are associated with barriers to investment in land fertility –Particularly for women

With a significant cost Most farmers would increase steady state output 20-50% with one more year of fallow. Approx 434,000 hectares of land in Ghana is planted to maize and cassava in Regions with likely similar land tenure This gain would be about % of 1997 GDP, 13-19% of national poverty gap But institutions don’t arise in a vacuum: weigh this against the safety net