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Formal Land Rights, Plot Management, and Income Diversification In Formal Land Rights, Plot Management, and Income Diversification in Tigray Region, Ethiopia Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Charity Maria Troyer Moore, M.A. Graduate Program in Agricultural, Environmental, and Development Economics The Ohio State University 2012 Dissertation Committee Joyce Chen, Advisor Dave Kraybill Brian Roe Copyright by Charity Maria Troyer Moore 2012 Abstract This dissertation examines plot certification that was carried out in Tigray Re- gion, Ethiopia, in the late 1990s. The program was expected to increase smallholders' tenure security and encourage producers to make key investments on plots that would ultimately increase agricultural productivity. The analysis is based on a retrospective panel dataset with four years of in- formation from the community to the plot level, and analysis is performed at both the plot and household levels. Using variations of fixed effects that account for time- varying heterogeneity at the village and household levels, and latent characteristics at the household and plot levels, the analysis examines the impact of certification on agricultural investments with short and long-term returns, agricultural productivity, and household income generation strategies. Some models also attempt to control for the endogeneity of certification due to unobserved plot shocks. The estimates suggest that certification did not appreciably increase invest- ments with either short or long-term returns, outside of investments in organic inputs. An accompanying theoretical analysis suggests certification should have affected these investments, so intervening factors have limited the program's effectiveness. Simi- larly, certification appeared to have had no impact on agricultural productivity. The productivity results were tested using several estimation strategies to examine their robustness and investigate why estimates diverge qualitatively from results put forth by others. Estimates suggest that the different results obtained here were a result of methodological, rather than data, differences between the current analysis and that performed by other researchers. They point to the importance of accounting for ii heterogeneity at the household and plot levels when investigating the impact of land rights formalization. Results examining the impact of certification on households' income diversifi- cation strategies are more optimistic. They suggest that households adjusted their activities and asset holdings as a result of certification. The changes households made were consistent with certification reducing the risk to which households were exposed and allowing them to take on greater risk with its concomitant higher rewards. This result is not unqualified, since only the highest-earning households leveraged certi- fication to increase their participation in the relatively higher-return off-farm and non-agricultural sectors. If anything, the lowest-earning households specialized their income sources due to certification, perhaps as a result of exiting desperation-driven diversification activities. The results from the analysis suggest that certification did not meet its intended goals. Since there is evidence that certification was perceived positively by producers, and certification affected households' diversification strategies, its lack of impact in the agricultural sector was, most likely, not due to it being an ineffective policy per se. Instead, the impact of certification on agricultural investments and productivity may have been limited by households' extreme poverty and factor market failures that limited households' capacity to respond to the policy. Given the recent resurgence of interest in formalizing rights to plots in Sub- Saharan Africa, these results have important policy implications. They point to the potential for land rights formalization to improve outcomes in impoverished house- holds, but they also highlight the need for the development of complementary markets that may otherwise limit the impact of such a policy. iii Dedication Dedicated to Ted. Thank you. iv Acknowledgements I would like to thank Joyce Chen for her support and helpful critiques through- out my time at Ohio State. I also thank the other members of my committee, Dave Kraybill and Brian Roe, for their support. Thank you to Mario Miranda for his sup- port and flexibility for me throughout my tenure at Ohio State. I am grateful to the International Food Policy Research Institute, International Livestock Research Insti- tute, Mekelle University, and the Amhara National Regional Bureau of Agriculture and National Resources, the Ethiopian Agricultural Research Organization, and the Agricultural University of Norway for the use of the data. All errors are my own. v Vita Education B.A., Business Management (Economics, Spanish), Asbury University, Wilmore, Ken- tucky USA, 2003 (Summa cum Laude) M.A., Economics, The Ohio State University, Columbus, Ohio USA, 2008 (Magna cum Laude) Ph.D. (March 2012), Agricultural, Environmental, and Development Economics, The Ohio State University, Columbus, Ohio USA Research Experience and Employment Consultant, The World Bank April 2009 - present Graduate Teaching Assistant, Supervisor: Stan Thompson The Ohio State University, Columbus, Ohio USA September 2009 - March 2010 Research Assistant, Supervisor: Joyce Chen The Ohio State University, Columbus, Ohio USA September 2008 - September 2009 Research Associate, International Poverty Centre (United Nations Development Programme) Bras´ılia,Brazil August 2007 - December 2008 Intern, International Poverty Centre (United Nations Development Programme) Bras´ılia,Brazil June 2007 - August 2007 vi Senior Market Research Methodologist and Statistician, The Horace Mann Companies Springfield, Illinois USA September 2004 - June 2006 Intern, Instituto para el Desarrollo Hondure~no (Institute for Honduran Development) Tegucigalpa, Honduras June 2002 - August 2002 Honors, Scholarships, and Fellowships Bernie Erven Outstanding Graduate Teaching Assistant Award 2010 Dean's Distinguished University Fellowship, The Ohio State University 2006 and 2010 Mershon Center for International Security Studies Student Grant Recipient 2009 Nominee, Ohio State Graduate Associate Teaching Award 2009 Best Research Manuscript by a Second-Year Ph.D. Student, The Ohio State University 2008 Ohio Agricultural Research and Development Center International Associateship 2006 Publications Akresh, Richard, Joyce Chen, and Charity Moore. 2012. \Productive Efficiency and the Scope for Cooperation in Polygynous Households." American Journal of Agri- cultural Economics. 94(2):395-401. Garcia, Marito, and Charity Moore. 2012. The Cash Dividend: The Rise of Cash Transfer Programs in Sub-Saharan Africa. Directions in Development Series. Wash- ington, DC: The World Bank. vii Moore, Charity. 2010. \The Political Economy of Social Protection in Honduras and Nicaragua." In Conditional Cash Transfers in Latin America: A Magic Bullet to Re- duce Poverty? Eds. Michelle Adato and John Hoddinott. Baltimore: John Hopkins University Press. Moore, Charity. 2009. \Nicaragua's Red de Protecci´onSocial: An Exemplary but Short-Lived Conditional Cash Transfer Programme," Country Study Number 17, In- ternational Poverty Centre for Inclusive Growth, Bras´ılia, Brazil. Moore, Charity. 2009. \Impact Is Not Enough: Image and CCT Sustainability in Nicaragua." One Pager, International Poverty Centre for Inclusive Growth, Bras´ılia, Brazil. Moore, Charity. 2008. \PRAF: The Unexpected Reality of Honduras' CCT Pro- gramme," Country Study Number 15, International Poverty Centre, Bras´ılia,Brazil. Moore, Charity. 2008. \Why Sources of Funding for CCTs Matter in Honduras and Nicaragua," Poverty in Focus, Number 15, International Poverty Centre, Bras´ılia, Brazil. Fields of Study Major Field: Agricultural, Environmental, and Development Economics Secondary fields: Land Economics; Agricultural Households; Applied Microeco- nomics; Health, Education, and Welfare; Social Protection Policies viii Table of Contents Abstract .........................................................................ii Dedication . iv Acknowledgements . .v Vita ............................................................................vi List of Tables. .x List of Figures . .xii Chapter 1: Plot Certification in Tigray Region, Ethiopia: Setting the Stage . 1 Chapter 2: Formal Land Rights and Plot Management in Tigray, Ethiopia . 14 Chapter 3: Rethinking Land Rights and Agricultural Productivity . 64 Chapter 4: Did Formalizing Land Rights Help Diversify the Ethiopian Economy? 99 Chapter 5: Was Plot Certification Worthwhile? . 144 References . 147 Appendix A: Derivation of Comparative Statics from Chapter 2 . .160 ix List of Tables Table 1.1. Plot Investments. .52 Table 1.2. Plot Characteristics. .53 Table 1.3. Household and Village Characteristics . 54 Table 1.4. Plot Rights and Certification Status . 55 Table 1.5. Plot Characteristics in Households with Plots with Different Certification Status in the Same Year. .56 Table 1.6. Investment Regressions, Basic Results Using Household-Year and Plot Fixed Effects . 57 Table 1.7. Basic Investment Results, Instrumented. .58 Table 1.8. Investment Regressions, Controlling for Concurrent Investments. .59 Table 1.9. Investment Regressions, Various Sample Restrictions . 60 Table 1.10. Short-term Investment Regressions by Type of Investment . 61 Table 1.11. Investment Regressions for Households with All Plots
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