Land rights in transition: Public Disclosure Authorized Preliminary experimental evidence on how changes in formal tenure affect agricultural outcomes, perceptions, and decision-making in the Philippines Public Disclosure Authorized Impact Evaluation Endline Report Rosa Castro-Zarzur,1 Prudenciano Gordoncillo,2 Snaebjorn Gunnsteinsson,1 Forest Jarvis,3 Hillary C. Johnson,3 Elizaveta Perova,3 Peter Srouji4 Public Disclosure Authorized 1 University of Maryland - College Park 2 University of Philippines Los Baños 3 The World Bank 4 Innovations for Poverty Action Public Disclosure Authorized Acknowledgments We would like to thank a number of people whose efforts, either directly or indirectly, culminated in the completion of this evaluation. We deeply appreciate all of the support we have received from the Philippine Department of Agrarian Reform’s (DAR) senior management team and support staff, including Secretary John Castriciones, former Secretary Rafael Mariano, former Secretary Virgilio de los Reyes, former OIC-Undersecretary Homer Tobias, Undersecretary Emily Padilla, Undersecretary Bernie Cruz, former Undersecretary Jose Grageda, former Undersecretary Karlo Bello, former Undersecretary Rosalina Bistoyong, Bureau of Land Tenure Improvement (BLTI) Director Joey Sumatra, former BLTI Director Leandro Caymo, Policy and Planning Service Director Letecia Damole-Canales, Management Information Systems Service Director Nestor Bayoneto, Supervising Agrarian Reform Program Officer Sonia Ancheta, the Regional Directors, Provincial Agrarian Reform Officers, and all DAR field staff that supported the evaluation. Their enthusiasm for the study and assistance throughout has been critical to its continued success. We very much appreciate all of the hard work and outstanding field management of the Field Managers Maria Sylvia Tuason and Rhea Macapanas and the field staff, Lovely Densing, Micha Fernandez, Philip Salas, Bryan Adlaon, Stella Lumaad, Stephanie Miguel, Joanne Roa, and Sanny Mangayao. Their dedication and persistence were critical to the project’s success. We also thank Tristan von Zahn, Rowell Dikitanan, Michelle Rafols, Naixin Zhu, and Jessica Gao for their excellent research support and project management. We appreciate the guidance of Sudhir Shetty, Andrew Mason, and Aaditya Mattoo, as well as the support and comments from Achim Fock, Gabriel Demombynes, Madhu Raghunath, Maria Theresa Quinones, Kathrine Kelm, Sarah Antos, Klaus Deininger, Talip Kilic, Agnes Quisumbing, Michael O’Sullivan, Aletheia Donald, Sundas Liaqat, and Aneesh Mannava. We would also like to thank the International Initiative for Impact Evaluation. Their continued support and input at all stages of the project have been invaluable. Research discussed in this publication has been funded by the International Initiative for Impact Evaluation, Inc. (3ie) through the Global Development Network (GDN) and by the World Bank’s East Asia and Pacific Gender Innovation Lab (EAPGIL). EAPGIL is supported through the World Bank Group’s Umbrella Facility for Gender Equality (UFGE) in partnership with the Australian Department of Foreign Affairs and Trade. The Umbrella Facility for Gender Equality (UFGE) is a multi-donor trust fund administered by the World Bank to advance gender equality and women’s empowerment through experimentation and knowledge creation to help governments and the private sector focus policy and programs on scalable solutions with sustainable outcomes. The UFGE has received generous contributions from Australia, Bill & Melinda Gates Foundation, Canada, Denmark, Finland, Germany, Iceland, Latvia, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom, and the United States. The views expressed in this article are not necessarily those of 3ie or its members, of GDN, or of the World Bank Group, its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. 2 Executive Summary Private property rights are widely considered to be one of the most important tools in fighting inequality and promoting economic growth. In the Philippines in particular, a lack of formal, individual property rights is a key obstacle facing many farmers as they work to maximize productivity on their lands and escape poverty. Of the 4.9 million hectares of land that have been distributed to over 2.8 million Filipino farmers under the Comprehensive Agrarian Reform Program (CARP), almost half (2.37 million hectares) were awarded in the form of collective titles that failed to provide beneficiaries with full individual property rights. To address this issue, the Department of Agrarian Reform (DAR) is in the process of subdividing these collective titles and distributing individual land titles to the respective Agrarian Reform Beneficiaries (ARBs). This ongoing intervention provides a unique opportunity to study the impacts of providing formal, individual property rights as the subdivision process is underway. Although the DAR monitors the Collective CLOA Parcelization Program in terms of total outputs, there has been no impact evaluation of the parcelization process. In order to gather valuable information on the impacts of formal property rights, the International Initiative for Impact Evaluation (3ie) and the World Bank’s East Asia and Pacific Gender Innovation Lab (EAPGIL) partnered with Innovations for Poverty Action (IPA) to conduct a randomized experiment on the subdivision of collective titles in the pre-existing DAR Parcelization Program (DARPP). The impact evaluation is designed to measure the impacts of DARPP on agricultural investment and output and the channels – namely tenure security and gains from trade – through which these impacts may materialize. The study additionally investigates impacts on ARB welfare, migration, agricultural aspirations, and intra-household bargaining and decision-making. Although the impact evaluation is designed to measure the impacts of the DARPP, this report only presents the impacts of an intermediate stage in the parcelization process and, as such, cannot be used to draw conclusions about the effects of the program as a whole. Nevertheless, these intermediate impacts provide useful lessons on how the parcelization process can be improved and fill a global knowledge gap on how programs changing property rights, which can span several years, affect beneficiaries while they are going through the transition. Economic theory predicts that formalized property rights can influence investment decisions and productivity by reducing the threat of expropriation, increasing access to credit, and/or gains from trade (Besley 1995). The parcelization of collective titles is expected to have positive impacts on these outcomes. However, the direction and magnitude of the impacts of an intermediate stage of parcelization are theoretically ambiguous. On the one hand, the subdivision survey may settle boundary disputes, provide clarity on borders, and reassure ARBs that they will eventually receive individual land titles, all of which could increase perceptions of tenure security or make it easier to lease out the land. On the other hand, any process of change can breed uncertainty during the transition, and the long duration of the process coupled with the temporary relinquishment of title documents during processing may cause a decline in perceived tenure security. Existing empirical evidence is thin, and the only other randomized experiment providing evidence on an intermediate stage of formalizing individual property rights takes place in a very different context, with an existing customary land tenure system and beneficiaries who formerly had no formal title (Goldstein et al. 2018). This report fills that knowledge gap by providing empirical evidence on the direction and magnitude of impacts of the first stage of a change in property rights, shedding light on how ARBs experience the transition phase and what improvements to the process can be made. We additionally provide the first experimental evidence on land property rights in the Philippine context. 3 Measuring the impacts of the process of parcelization requires that researchers observe ARBs whose collective titles are undergoing the parcelization process and have a hypothesis about what would have happened in absence of the initiation of this process. Thus, a cluster randomized control trial (RCT) design was chosen in order to measure how and to what extent the DARPP process impacts agricultural and welfare outcomes. The study’s sample consists of 475 collective titles across 10 provinces in Regions V, X, XI, XII, and XIII in the islands of Luzon and Mindanao where the DAR reports a backlog of collective titles considered priority for subdivision and would not be able to parcelize all titles within the study period. The random assignment of collective titles to either treatment or control creates two groups that are characteristically the same on average, informing us of what would have happened to collectively titled parcels and their ARBs absent the program. Treatment titles were prioritized for subdivision during the study period, whereas control titles will be subdivided after the completion of the study. Apart from the timing of the intervention’s roll-out, no changes were made to the administration of the intervention as a result of the study. The impact evaluation began with a baseline survey conducted between July 2015 and May 2018 with 855 ARBs and their spouses across 475 collective titles. IPA then conducted a lottery