Is Land Titling in Sub-Saharan Africa Cost-Effective? Evidence from Madagascar

Formalizing land rights has been promoted as a way to encourage agricultural investment and stimulate land markets, yet little is known about the benefits of such policies in Sub-Saharan Africa, where the preconditions for success are less favorable. The analysis uses a large sample of plots from an intensively titled rice-growing area of Madagascar and compares land-specific investments, land productivity, and land values for titled and untitled plots cultivated by the same household. Having a title has no significant effect on plot-specific investment and correspondingly little effect on land productivity and land values. These results are broadly consistent with a simulation of a theoretical model of investment under expropriation risk calibrated to the same data. A cost-benefit analysis suggests that the current system of formal titling should not be extended in rural Madagascar and that any new system of land registration would have to be quite inexpensive to be worthwhile.

Jacoby and Minten (2007)

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Rural: Lac Alaotra region.Household-level fixed effects estimation using cross-section data on multiple plots per household.Land titling.Land titling has only a modest (+6%) effect on land values. Land titling has no significant effect on land-related investment or productivity.https://openknowledge.worldbank.org/bitstream/handle/10986/4466/wber_21_3_461.pd...1,700 households owning 2,652 owner-cultivated rice plots in 38 communes.