Demand for second-stage land certification in Ethiopia: Evidence from household panel data

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ContentslistsavailableatScienceDirect

Land Use Policy

jou rn al h om ep a g e :w w w . e l s e v i e r . c o m / l o c a t e / l a n d u s e p o l

Demand for second-stage land certiﬁcation in Ethiopia: Evidence from household panel data

Sosina Bezu

^∗

, Stein Holden

SchoolofEconomicsandBusiness,NorwegianUniversityofLifeSciences,P.O.Box5003,1432Ås,Norway

a r t i c l e i n f o

Articlehistory:

Received15September2013 Receivedinrevisedform17May2014 Accepted28May2014

Keywords:

Landregistrationandcertification Second-stageregistrationandcertification Jointlandcertification

Landadministration Ethiopia

a b s t r a c t

Ethiopiahasimplementedoneofthelargest,fastestandleastexpensivelandregistrationandcertification reformsinAfrica.Whilethereisevidencethatthis‘first-stage’landregistrationhashadpositiveeffects intermsofincreasedinvestment,landproductivityandlandrentalmarketactivities,thegovernment isnowpilotinganotherroundoflandregistrationandcertificationthatinvolvestechnicallyadvanced landsurveymethodsandcomputerregistration.This‘second-stage’landregistrationdiffersfromthe registrationsystememployedinthefirstroundthatusedfieldmarkingsinconjunctionwithneigh- bors’recollectionstoidentifyplotborders.Weusepaneldatafrom600householdsinsouthernEthiopia toinvestigatehouseholdperceptionsofanddemandforsuchanewregistrationandcertification.Our studyrevealedrelativelylowdemandandwillingness-to-pay(WTP)forsecond-stagecertificates.The WTPalsodecreasessignificantlyfrom2007to2012.Ourfindingsindicatethatfarmersdonotbelieve thatthesecond-stagecertificateenhancestenuresecurityrelativetothefirst-stagecertificateexcept ininstancesinwhichfirst-stagecertificationwaspoorlyimplemented.Thedemandforsecond-stage certificatesappearstocomeprimarilyfromgovernmentalauthorities,asitcanprovideabetterbasisfor landadministrationandproduceaccessiblepublicdocumentationofland-relatedaffairs.

Introduction

Ethiopiahasimplementedoneofthelargest,fastestandleast expensive land registration and certification reforms in Africa (Deiningeretal.,2008).Whilethereissomevariationinhowland registrationandcertificationhasbeenimplementedacross,and evenwithin,regionsinEthiopia,thebroad-scalefirst-stageland registrationandcertificationinvolvedtheregistrationanddemar- cationoflandplotsusingsimplelocaltechnologiesthatrequired littletraining.Themainsourcesfordeterminingplotboundaries were field markings, in conjunction with the memoriesof the neighborswhosefarmplotsborderthoseownedbythehouseholds inquestion.Measuringtapesandropeswereusedtomeasurethe farmplots.Whiletheinitialcostofthisregistrationwasextremely low (approximately 1 US$ per farm plotor less), itsimpact in improvingtenuresecurityhasbeensignificant,asevidencedby increasedinvestment,land productivityandland rentalmarket activity(Deiningeretal.,2008,2011;Holdenetal.,2009,2011a;

Bezabihetal.,2012).

∗Correspondingauthor.Tel.:+476478625748.

E-mailaddresses:[email protected],[email protected](S.Bezu).

However, the first-stage certification had limitations with respect to the maintenance and updating of land registration records.Ethiopiahas begun pilotingand introducinga second- stagelandregistrationandcertificationinselecteddistrictsinthe highlandregions. Thenewregistration andcertification system involvesregisteringtheprecisegeographicallocationsandsizes of individual farm plots using technologies suchas GPS, satel- liteimageryororthography.Farmersreceiveplot-levelcertificates withmapsrather thana household-levelcertificate. Theaimis thatthesecond-stagelandregistrationandcertificationeffortwill enhancetenuresecurity,themaintenanceandupdatingofrecords, andlandmanagement(MOA,2013b).

Thesecond-stagelandregistrationandcertificationwilllikely besubstantiallymorecostlythanthefirst-stagecertificationand will alsorequiremuch longer tocomplete. Ifthe primarypur- poseofthesecond-stagecertificateistoincreasetenuresecurity forfarmers,itisimportanttoexploretheirperceptionsof,inter- estinandwillingness-to-pay(WTP)forsuchplot-levelcertificates thatincludemaps.Duringthefirst-stagecertification,farmerstyp- ically paid a fee toreceive theircertificates.If plannersexpect that partofthecostsof thesecond-stagecertificationwill also berecoupedthroughsuchafee,given thehighbudgetary costs associated withthis project, thefarmers’ WTP should be esti- mated.Weusedatafrom600householdsinOromiaregionand http://dx.doi.org/10.1016/j.landusepol.2014.05.013

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SouthernNations,NationalitiesandPeoples(SNNP)regiontoinves- tigatehouseholdperceptionsofandWTPforsuchasecond-stage certificate.WeassessedtheWTPinmonetarytermsandusingthe numberoflabor-daysthathouseholdswerewillingtosupplyin exchangeforthesecond-stagelandcertificates.Ourdatacoversub- stantialvariationinagro-ecologicalconditions,marketaccessand urbanexpansion.Thehouseholdpaneldatafrom2007and2012 allowustoassesshowthedemandforsecond-stagecertificates haschangedovertimeinourstudyareas.Thefindingsshouldbe highlyrelevantforthedesignoffuturelandadministrationreforms inEthiopiaandelsewhere,e.g.,toidentifythetypesofareastotar- getfirstandwhethertherecipientsarewillingtopayalargeshare ofthecostsofthesecond-stagereform.

Theanalysesreveallimitedinterest inthesecond-stagecertificate,especiallycomparedtothefirst-stagecertificate.Boththe generalinterestinsecond-stagecertificatesandtheamountsthat interested households are willing to pay for such a certificate declinedfrom2007to2012.Our econometricanalysesindicate thathouseholdsthatparticipatedinpublicmeetingsconcerning thefirst-stageregistrationand certificationand householdsthat experiencedlanddisputesbeforethefirst-stageregistrationare morelikelytoshowinterestinasecond-stagecertificate.However, maleheadedhouseholdsforwhichonlythenameofthehusband appearsonthefirst-stagecertificateandhouseholdsthathadsuf- ficientwitnessesforborderdemarcationexhibitlowinterestina newcertificate.Households thathavelargerland holdingshave lowerWTP.

Literaturereview

Landregistrationandlandtitling

Alandtitleisawrittendocumentprovidingproofofownership, andthisownershipisalsorecordedinapubliclyrecognizedcentral landregistry.Modernlandtitlesareassociatedwithhighquality andaccuratemapsandcoordinatesthatcanbeusedtoverifythe exactspatialboundariesofsuchproperty.Upgradingland-titling systemshasbeenagradualprocessinmostcountriesduetothe costlyandtime-consumingnatureofthework.Inmanycountries, thishasbeenademand-basedprocessinwhichthosedemanding thetitlehavehadtopayforthecosts.Suchprocedureshaveoften beenassociatedwithslowbureaucraticprocessesandnumerous stepsthathavecreatedopportunitiesforcorruption,rent-seeking and “elite capture”. They have also createdan unleveled play- ingﬁeldwherethepoorandlessconnectedhavetypicallybeen marginalized.Manyhavethereforebecomeskepticalofformaliz- inglandrightsthroughlandtitlingindevelopingcountriescontexts suchasinAfrica.Landtitlinghasbeenperceivedasathreattocus- tomarylandrights(Benjaminsenetal.,2009;Cotulaetal.,2004).

Somehavechallenged theveryclaim thatlandregistrationand titlinghavethepotentialtoimproveproductioninpoorcountries, particularlyinAfrica(Atwood,1990;Bromley,2008).Theyargue thatthepremisesonwhichthisclaimisbased,suchaslandregistra- tionprovidingsmallfarmerswithaccesstocreditorencouraging themtoinvestintheirland,arethemselvesbasedonasimplis- ticmodelofrurallandrights(Atwood,1990)andhavenotbeen supportedbystrongempiricalevidence(Bromley,2008).

FederandNishio(1999)reviewedsuccessfullandregistration andtitlingprogramsinAsiaandLatinAmericaandobservedposi- tiveeffectsoninvestment,creditaccess,landproductivityandland value.SucheffectswerefoundinThailand,ThePhilippines(urban areas),Indonesia(urbanareas),Honduras,Paraguay,andPeru.A studyinruralIndia(PenderandKerr,1994)foundnosigniﬁcant positiveeffectsoninvestmentorcreditaccess.StudiesonAfrica (Ghana,KenyaandRwanda)(Migot-Adhollaetal.,1991)foundthat

landregistrationhadnosignificantimpactonlandproductivity, landinvestmentorcreditaccess.JacobyandMinten(2007)also foundnosignificanteffectsoflandtitlinginMadagascar.Besley (1995),however, found a positive effectof new land rights on investmentintreesinoneareainGhana.FederandNishio(1999) emphasizethatnumerousprerequisiteshavetobeinplacebefore thepositiveimpactsoflandregistrationcanbeachieved,includ- ingweaknessesinexistingformalorinformaltenuresystemsthat thereforedonotprovidethenecessarytenuresecuritythatisessen- tialforinvestment.Positiveimpactsonaccesstocreditmarkets andlandmarketswillnotoccurunlesssuchmarketsexist.Lending institutionscannotuseland ascollateralunlessthere isawell- functioninglandsalesmarket.Landlawsandlandadministrations capableofimplementingthelawsandlandregistrationandtitling systemsinatransparentandreliablemannerandwithclearconflict resolutionsystemsareessential.Thereisariskthattheintroduc- tionofamodernregistrysystemtoreplaceatraditionaltenure systemcouldresultin landgrabbing(“elitecapture”) by better informed,moreinfluentialandwealthierstakeholders.Thereare fearsthattheeffectcouldincreaselandlessnessandresultinthe formalizationoflandrightshavingnegativeeffectsonthepoor.

Localparticipationintheprocessandsimple,efﬁcientandtrans- parentproceduresarealsoimportantforcreatingpopulardemand andsuccess.

Bothcustomaryandstatutorytenuresystemshavetendedto exhibitagenderbiasinfavorofmenoverwomen.Landtitleshave typicallybeenallocatedtotheheadofthehousehold,whoinmost casesisaman.Therehavebeennumerouscasesinwhichformal- izinglandrightsthroughlandtitlinghasunderminedcustomary landrights,whichhavebeenignoredordisrespected.

Costsofformalizinglandrights

Thehighcostoflandtitlinghasforcedmanycountriestoestab- lishasystemoflandtitlingondemand,andthishasmadelandtitles costlierandonlyavailabletothewealthy(Benjaminsenetal.,2009;

BesleyandBurgess, 2000;Cotulaetal.,2004; Deininger,2003).

Therefore, there is substantial need for more low-cost, broad- scaleandegalitariansystemsforlandregistrationinlow-income countries.InHonduras,thecostoflandtitlingwasestimatedat 600US$pertitle(Lopez,1996),whileinMadagascarithasbeen estimatedat150US$perhouseholdundertheconventionalsys- temoftitlingondemand(JacobyandMinten,2007).Burnsetal.

(2007)assessedthevariationincostsacrossnumerouscountries and foundaveragecosts ofbetween20 and 55US$ perparcel.

Ayalewetal.(2011)provideanestimateofthecostsofhiringpri- vatesurveyorsfortitlingondemandforurbanlandownersinDar esSalaam,Tanzaniaofapproximately350US$.TheEthiopianfirst- stagelandregistrationand certificationsystemliesattheother extreme,wherethecostofregistrationandcertificationwasesti- matedtobeapproximately1US$perfarm plotor3.5 US$per household(Deiningeretal.,2008).

Inassessingtheoptimalqualitylevelin alandformalization scheme, it is important to assess the marginal beneﬁts versus marginalcostsofincreasingtheformalizationqualityoflandrights.

AsDeininger and Feder(2009) note,there aremany examples ofsupply-driven landformalization programsthat wereimple- mented basedon lobbyingby survey professionals and leadto excessivelyhightechnicalstandardsrelative tothedemandfor suchformalizationandtheactuallandvalues.Suchprogramsmay evenhavecreatedcompetitionwithtraditionaltenuresystemsand underminedthelatter.Thismayalsoexplainwhysomeconven- tionalland-titlingprogramssuchasinKenyaandMadagascarhave notresultedinanysigniﬁcantimpacts(Migot-Adhollaetal.,1991;

JacobyandMinten,2007)andothershaveresultedinspeculative behaviorthathascreatedconﬂicts(Benjaminsenetal.,2009).The

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degreeofprecisionin plotboundaryidentificationformapping purposeshasastronginfluenceonthecostsoflandrightsformal- ization.Thecostsoftechnicalformalizationincreaseexponentially intheprecisionlevel(DeiningerandFeder,2009).TheEthiopian first-stageregistrationwasableattoachievehighprecisionata verylowcostwithoutmappingbyadoptingfielddemarcationand usingneighborsaswitnesses.

Thetrendinlow-incomecountriesistowardintermediatesolu- tions to the classical land-titling approach by unbundling this

“one-size-ﬁts-all”approachtospecifyinglandrightsbyusinglow- cost,broad-scaleregistrationwithhighlocalparticipationand/or simpler,lesscostlyandlessprecisetechnologies,issuingsimpler certiﬁcateswithout maps,etc. Technologicaladvancesfacilitate more low-cost technical approaches that utilize GPS, satellite images,computers,andnewsoftwaretogeneratemapsandreg- istrysystemsatamuchlowercostthanthetraditionalapproach tolandtitling.Centralizedandcomputerizedmappingandregistry systemsareeasiertomaintainandupdate.Such“intermediate”

systemshaverecentlybeenintroducedinanumberofcountries, includingatabroadscaleinRwandaandatthepilotlevelinEthiopia andTanzania.Theleastexpensiveofthesemethodsimplycertain sacrificesintheaccuracyoftheidentificationofplotboundaries, astheaccuracyofthelow-costGPSsystemsthatarecommonly usedmayonlybeatthe5–10mlevel.Nevertheless,thisresolu- tionmaybesufficientformappingpurposes.However,suchmaps cannot beusedas a basis for resolvingplotboundary disputes relatedtosmall-scaleencroachmentbyneighbors.Thelatestlow- costapproaches usingsatelliteimagescanincrease precisionto therangeofto1–2mandmaythereforereducethepotentialrisk ofborderdisputesduetoinaccuracy.

ReviewoflandregistrationandcertificationinEthiopia We will begin this section by defining the term land registration as used in this paper. Land registration is a process of locating,measuringandregisteringfarmplotsbelongingtorural farmhouseholdsinEthiopia.Forindividualhouseholds,certificates arenotissuedwhentheirlandisregistered.Typically,certificates areissuedonceallvillage(‘kebelle’)landhasbeenregisteredand verified.Inadditiontotheinevitablelagbetweenregistrationand certification,borderandinheritancedisputesmayalsodelaythe issuanceofcertificatesforlandsthathavebeenregistered.

First-stagelandregistrationandcertiﬁcation

LandregistrationinEthiopiabeganwitharegistrationprogram inTigrayin1998followedbyoneintheAmhararegionin2002.

Theothertwohighlandregions,OromiaandtheSouthernNations Nationalitiesand Peoples(SNNP),initiated registrationin 2004.

Accordingtothe Rural LandUseDirectorate atthe Ministryof Agriculture,morethan90%offarminghouseholdsintheseregions receivedtheirlandcertiﬁcatesthroughtheﬁrst-stageregistration (MOA,2013a).

Attributes,strengthsandweaknesses MainAttributes

ThefollowingarethemainattributesofEthiopia’slow-costﬁrst- stagelandregistrationandcertiﬁcationscheme:

•Broad-scale registration: Communities were registered in a single,sweepingexercisewithinashortperiodoftime.Approxi- mately6millionhouseholdsand20millionplotswereregistered andcertiﬁedwithinafewyears(Deiningeretal.,2008).

•Participatory registration process: There was high degree of involvementbylocalsintheidentiﬁcationanddemarcationof plotboundaries,withneighborsservingaswitnesses.

•Registration was performed using simple, user-friendly tech- nology: Ropes were used for plot measurement, and simple, handwrittenformswereemployedtorecordinformation.Reg- istrybookswithinformationonhouseholdsaremaintainedat thecommunityanddistrictlevels.

•Thecertiﬁcatesgiven toindividualhouseholds include:Infor- mationontheplotsbelongingtothesehouseholds,name(and photoofhouseholdheadandotherhouseholdmembersinsome regions),locationname,plotsize,landquality,andthenamesof neighborsforeachplot.

Strengths.

•Noneedforskilledsurveyors:Existingortemporarilyhiredstaff withonlyshort-termtrainingregisteredtheland.

•Lowcostregistrationandcertiﬁcation.

•Lesstimewasrequiredtoregistermillionsoffarmplotsrelative totechnicallydemandingregistration.

•Transparencywasachievedthroughbroadparticipation.

•Theconﬂictresolutionsystembuildsonexistingsystemsthrough theuseoflocalconﬂictmediatorsandsocialcourtsandissup- plemented with newly established local Land Administrative Committees(thereisvariationacrossregionsandovertime).

Weaknesses.

•Maintenanceofrecords:Theregistrybooksaredifﬁculttoupdate intheeventoflandinheritances,giftsordivisionsduetodivorce.

•Households,butnotplots,haveuniqueidentiﬁcationnumbers.

•Thecertiﬁcatedoesnotcontainmapsofthefarmplots.

•Accessinginformationforthepurposeoflandadministrationand policyanalysisisdifﬁcult,asdataregistrationispaper-basedand noteasilyavailable.

Deiningeretal.(2008)providedanoverviewoftheEthiopian low-costapproach. In a surveyof 2315households, theyasked aboutthewillingnesstopay(WTP)forlostcertiﬁcatetoobtain informationonhouseholds’valuationsofthecertiﬁcates.TheWTP was highest in the Oromiaregion (mean 22 EB¹), followed by Amhara(mean9EB),SNNP(mean7EB)andTigray(mean5EB).

BasedonexistingregistrationpracticesinAmhara,theyestimated aﬁrst-registrationcostof30EBperhouseholdand8.3EBperplot, indicatingthatevenintheﬁrst-stageregistrationsystem,thefull costmaynotberecoveredthroughregistrationfees.

Impactsoftheﬁrst-stagelandregistrationandcertiﬁcationin Ethiopia

Anumberofstudieshaveinvestigatedtheimpactsofthislow- costlandregistrationandcertificationprocessinEthiopia.Holden et al.(2009) provideevidenceof theinvestmentand land pro- ductivityeffectsoflandregistrationandcertificationintheTigray region.Theyfoundevidenceofsignificantandpositiveinvestment impactsontreeplantingandthemaintenanceofsoilconserva- tionstructures.Landproductivitywasfoundtobeapproximately 40%higheronplotswithcertificatesthanonplotswithoutcertifi- cates.Holdenetal.(2011a)foundthatlandcertificationenhanced tenuresecurity,thewillingnesstorentoutlandandtheamountsof landrentedoutbylandlordhouseholdsintheTigrayregion,espe- ciallyforfemale-headedlandlordhouseholds.HoldenandGhebru (2013)investigatedthis issuefurtherandfoundthatproductiv- ityonrented-outlandhasimprovedtoagreaterextentonplots rentedoutbyfemalelandlordsthanthoseownedbymaleland- lords.Theyalsofoundthatwelfareimprovements,measuredas real per adult equivalent consumption expenditures, increased

1EB-Birr,theEthiopiancurrency.Currentexchangerate,1USD≈18.70.

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significantlyindurationoflandcertificateownership,particularly forfemalecertificateholders.

Deiningeretal.(2011)observedsimilarearlyimpactsontenure security,land renting and investment in theAmhara region of Ethiopiabutdidnotcarefullyinvestigatethegenderdimensions.

Bezabihetal.(2012)employedthesamedatafromtheAmhara regionandfoundastrongerproductivityimpactofcertiﬁcationon rentedland,andthisimpactwasthemostsubstantialforfemale owners.

HoldenandTefera(2008)assessedtheearlyimpactsofjoint first-stagelandcertificationinsouthernEthiopia(5districtsinthe OromiaandSNNPregions).Formaleheadsofhouseholds,onecan discerntwoeffects:(a)apositiveeffectofregistrationandcertifi- cationintheformofenhancedtenuresecurityforthehousehold and(b)anegativeeffectforthemaleheadintheformofreduced intra-household control over the land if the joint certification enhanceswomen’spositionsandlandrightswithinhouseholds.

Theirstudyrevealedthatthelargemajorityofmaleheadsofhouse- holdsperceivedtheretobeanetpositiveeffectfromtheprocess andthereforewelcomedthejointlandcertiﬁcation.

Holdenetal.(2011b)investigatedtheimpactonlanddisputes, particularlythatonlandborderdisputesinTigray,usingasample of405local conflictmediatorsfrom 85 villages.The localcon- flictmediatorsperceivedlandborder disputestobeamongthe mostdifficultdisputestomediate.Ofthemediatorssurveyed,68%

believedthatsuchconﬂictshaddeclinedaftertheregistrationand certiﬁcationwhile12%perceivedthattherehadbeenanincrease.

Econometric analysis revealed that the increase in border dis- puteswasassociatedwithlow-qualitylandregistrationworkwith respecttoplotboundarydemarcationandmeasurementandfail- urestodemarcatecommunityborders.However,suchlow-quality workappearedtohaveonlybeenperformedinafairlysmallshare ofthecommunitiesconsidered.Inasimilarstudyof180conflict mediatorsin theOromiaand SNNP regions,Holdenand Tefera (2008)foundthattherewasasignificantreductionindisputesafter registrationandcertificationinareaswhere suchdisputeswere commonbeforeregistration.

Theabovestudiesrevealimportantbenefitsofthefirst-stage landcertificationthrough:(1)enhancedtenuresecurityduetoa reducedriskofland redistribution;(2) improvedplotboundary demarcationthroughtheuseofwitnessesandthusareducedrisk ofencroachmentbyneighbors;and(3)improvedtransferabilityof landthroughtherentalmarket.

Second-stagelandregistrationandcertiﬁcation

Thewebsite of theEthiopian Ministry of Agriculture(2013) describes the first-stage certification as “a process of provid- ing “simple” temporarylandholding certificates... Under Stage 1,farmersreceivetemporarycertificateswithnogeo-referencing ormappingoflandparcels”(MOA,2013a).Themorepermanent second-stage certificate, therefore, “seeks to rectify the weak- nessesintheStage1landcertification,particularlytheneedto geo-referenceand map individualparcelstoavoid orminimize boundarydisputes.”Theobjectiveofthesecond-stagecertification, accordingtoMOA,istoenhancetenuresecurityforsmallholder farmers.Landadministratorsacrossthefourlargeregionalstates ofEthiopiahavebeenpilotingthesecond-stagelandregistration andcertificationschemesince2005.Registrationsconducteddur- ingthepilotstagebenefitedfromdonorsupportthroughvarious programs.

OneofthelargestprogramsistheUSAID-fundedELTAP/ELAP programthatcovers24 districts(woredas)acrossthefourlarge regions. Cadastralsurveying is performed using hand-held GPS devices,whilethedatawereprocessedandstoredoncomputers.

Therearesomeindicationsthatthismethodoflandregistration

willbescaledupatnationallevelforrurallandregistration(Wood etal.,2012).HandheldGPSdevicesarenotparticularlyexpensive, withprices in the range of USD 200–USD 600, but theiraccu- racylevelis5–15m.Therehavealsobeenotherpilotprograms thatemployedalternativelandsurveyingmethods.ASIDA-funded projectinAmharausedtotalstationsandprecisionGPSdevices, whicharebelievedtobeaccuratetothemillimeterbutarehighly expensive(USD40,000)andrequirecarstotransportfromplace toplace(SARDP,2010).TheFinland-fundedREILA(Responsible&

InnovativeLandAdministration)projectiscurrentlyconducting trialsinfourEthiopianRegionsusingorthophotosthatarepro- ducedfromaerialphotographsandsatelliteimages.Onedistrict isselected fromeachof thefourregionsfor thetrial.The esti- matedcostofthesecond-stagelandregistrationschemebasedon theimagerytrialcompletedthusfarisUSD8.5perparcel(Hailuand Harris,2013).Whilethereseemstobeaconsensusamongimple- mentersregardingthedesirabilityofanewlandcertiﬁcatewith plotmapsandgeo-referencing,itisunclearwhichofthelandsur- veymethodswilleventuallybeadoptedtoregisterruralfarmland atthenationallevel.Itmaybepossiblethatdifferentregionalstates willadoptdifferentlandsurveyingmethodsoracombinationof thereofdependingonthetypeoflandscape,thevalueoflandand theprecisionrequired.

From a study that covers 2315 households across Ethiopia, Deiningeretal.(2008)foundthatapproximately90%ofthesample statedthattheywouldliketohaveamapontheircertiﬁcatesand werewillingtopayforsuchamap.However,noquestionswere askedonhowmuchtheywouldbewillingtopayforthemap.The studyalsoprovidescostestimatesforhigh-precisionlandregistra- tionusingelectronictotalstationsof49EBperplotand175EBper householdandforlow-precisionregistrationusinghandheldGPS of13EBperplotand45EBperhousehold.Thereareanestimated50 millionlandparcelsinEthiopia(HailuandHarris,2013).Whichever landsurveymethodisused,thecostsofmappingallparcelswill betremendous.However,themappingandregistrationcostsare nottheonlycostsinvolvedortheonlylogisticstobeconsidered.

Whileupdatingandmaintainingthedatawithcomputerizedregis- trationiseasierthanpaper-basedregistration,theassociatedcosts arenotnegligible,andaccesstoelectricityisalsoachallenge(see Deiningeretal.,2008).

Thesecond-stagecertiﬁcatesproducedthroughthepilotpro- gramsthusfarhaveoftenbeendistributedtofarmersfreeofcharge.

Itisunclear,however,whetherthispracticewillcontinueifand whenthesecond-stageregistrationisscaledup.Iffarmersbelieve that thesecond-stagecertificate willprovide additional private benefits,theymaybewillingtopayfortheservice,andthusthey maybeexpectedtocoverpartofthecostsofthenewregistration andcertificationintheformofcertificatefees.

Implementationoflandregistrationandcertiﬁcationinthe OromiaandSNNPregions

Oromiaregion

The land registration and certification process began in the Oromia region in 2003/04, with regional employees training district-levellandadministrationstaff.LandAdministrationCom- mittees(LACs)wereestablishedatthecommunity(kebelle)level withrepresentativesfromthevillages(sub-kebelles).Registration began withthedemarcation ofcommunity andvillageborders, communallandandpublicland.Individuallandwasdemarcated, andaformwasfilledinthefield.Anotherformwassubsequently filled and keptat community level. The social court addressed complaints.Theregistrationbooksandcertificatesareprepared atdistrictlevel,whileonlytheformsaremaintainedatthecom- munitylevel.Householdheadsprovidephotos(4EB,compulsory)

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beforecertiﬁcatesareissued.Certiﬁcatescanbecollectedatthe kebellelevelatapriceof5EB(HoldenandTefera,2008).

Thecertiﬁcatecontainsthenameofthehouseholdheadunder

‘landholders’inthefirstlineandthespouse’snameunder‘nameof spouse’inthesecondline,followedbyalistofthenamesofother householdmembers.Thecertificateonlycontainsaphotographof thehouseholdhead.Ifthehouseholdispolygamous,thephotoof thehusbandandhisnameas‘landholder’onlyappearsononeof thecertificates(forthehouseholdandlandthathefrequentsor prefers).Theotherwiveswholiveonseparateplotswillhavecer- tificatesfortheirrespectiveparcelswiththeirnameswrittenunder

‘landholders’anddisplayingtheirphotographsinsteadofthehus- bands’.Thenameofthehusbandwillbewritteninthesecondline under‘nameofspouse’.Ifapolygamoushouseholddoesnothave separatelandforeachwife(whichisnotparticularlycommon),the wives’nameswillappearunderthe‘nameofspouse’lineonasingle certiﬁcate.Thecertiﬁcatedoesnotexplicitlystatethatthehusband andwifehaveequallandrights,unlikeinSNNPasweseebelow.

Second-stageregistrationiscarriedoutbysurveyorsandreg- istrars in the pilot districts. The surveyors and the registrars collaboratetotakeGPSmeasurements,preparetemporarysketches intheﬁeld,preparemapsonacomputer,andcombinetheplot- levelmeasurementswithhouseholdinformation.Thesecond-stage plotlevel certiﬁcates are printed onwater resistantpaper and include(sidebyside)thenamesofbothhusbandand wife,the sizeoftheplot,GPScoordinates,amapoftheplot,auniqueplot codeandtheplotcodeandholdernamesoftheneighboringfarms.

Theregionalgovernmentprovidesfundingforthepilotareasand priorityareaswherethesecond-stageregistrationandcertification takesplace.Inaddition,donorsupporthasbeenreceivedforsome ofthepilotareas.Householdsretainboththefirst-stagecertificate (book)andthesecond-stageplotmaps.

SouthernNations,NationalitiesandPeople(SNNP)region

LandregistrationbeganinSNNPin2004.Community-levelLand AdministrationCommittees(LACs)wereestablishedandtrained alongsideDevelopmentAgents(agriculturalextensionstaff).The demarcationofindividualplots oflandproceededbasedonthe assumptionthatcommunityandpubliclandborderswereknown.

Complaintsanddisputeswereresolvedlocallyand,ifnecessary, bydistrictcourts.Registrybookswerepreparedatthecommu- nitylevel.District-levelbookswerecompiledbutonlycontained summarizedinformationathouseholdlevel.Landcertificateswere preparedandsignedatthedistrictlevel,whilephotoswereadded andcertificatesstampedatthecommunitylevel.Thecostofcer- tificatesincludedacardfeeof2EBand4EBforphotos(Holdenand Tefera,2008).InSNNP,thecertificateissupposedtocontainthe namesandphotosofboththehusbandandwifeonthesamepage.

WhilethisguidelinehasnearlyalwaysbeenfollowedinSidama,it wasnotstrictlyfollowedinWollaita.Therightsandresponsibili- tiessectionofthecertificateindicatesthatboththehusbandand wifehaveequalrightstotheland.Thefirst-stagelandcertification schemehasbeendiscontinuedorwasneverimplementedincer- taincommunitiesinSidamawherethesecond-stageregistration processhasbegunin theformofpilotprojects.Forexample,in WondoGenetdistrict,whichhasbeenselectedfortheELTAPpilot project,only30%ofthehouseholdsreceivedafirst-stagecertificate.

Thesecond-stageregistrationisperformedusinghand-heldGPS devicestomeasuretheplotdimensionsandcomputerstoregis- terthedata.Oncetheregistrationiscompleted,householdsare issueda singlebook listingalloftheirplotsand containingthe namesofboththehusbandandwifeaslandholders.Inaddition, separatemapsareissuedforeachplot.AsinOromia,households inSNNPhavenotthusfarbeenrequiredtopayfor thesecond- stagecertiﬁcate.InSNNP,mostofthecostofthecertiﬁcatewas

coveredthroughtheELTAP/ELAPproject,buttheregionalgovern- mentalsocoveredpartofthecost.IncontrasttoOromia,where householdsareabletoretainboththefirst-andsecond-stagecertificates,inSNNP,householdsreturnthefirst-stagecertificatewhen theyreceivethesecond-stagecertificate.Landadministrationoffi- cialsseemtobelievethatthefirst-stagecertificateisobsoleteonce asecond-stagelandregistrationandcertificationstarts.Thismay alsoexplainwhytheysuspendedfirst-stageregistrationinpilot districts.

Dataanddescriptivestatistics

Astratiﬁedrandomsampleof620householdswassurveyedin 2007inﬁvedistrictsin theOromiaand SNNPregions. Ofthese households,580weresurveyedagainin2012withanadditional 40newhouseholdstomaintainthe620-householdsamplesize.

Locationswerestratifiedtocapturethedifferencesbetweenthe tworegions.Thesampleincludesdistrictswithcereal-based,crop- livestock systems; perennialsystems with irrigation producing cashcrops;andperennialsystemsforsubsistenceproductionwith- outirrigation.Inaddition,communitieswithvaryingdistancesto thedistrictcenterwereselectedtocapturevariationsinmarket accessandurbanexpansionpressure.Inthesetworegions,land certificateswereallocatedjointlytohusbandsandwivesandwere, therefore,intendedtostrengthenwomen’slandrights.Itispossible thatthisgenderfocusaffectedtheWTPforsecond-stagecertificates.

TherearetwocomponentsofthedemandandWTPquestions usedinthesesurveys.ThefirstsetofquestionsexploresWTPfor afirst-stagecertificatebyaskinghouseholdheadshowmuchthey wouldpaytoreplacealostfirst-stagecertificateandwhetherand howmuchtheywouldpayforafirst-stagecertificateiftheydid nothaveone.Thesecondsetofquestions exploresinterestina second-stagecertificate.Thesecond-stagecertificateisdescribed tohouseholdheadsasacertificatewithseparatemapsforeachplot.

Inthe2007and2012surveys,householdheadsareaskedabout theirinterestinreceivingasecond-stagecertificateandhowmuch theywouldbewillingtopayforitincashandlabor.Inaddition, husbandsandwiveswereseparatelyaskedabouttheirassessments oftheproposedsecond-stagecertificateinthe2012survey.²Itis possiblethatsuchquestionsleadtoanoverestimationoftheWTP forsecond-stagelandcertificationbecausethequestionsarehypo- theticalandtheWTPisderivedfromthosehouseholdsthatwishor wouldprefertohavesuchacertificate.Ontheotherhand,whilewe believethedescriptionofthesecond-stagecertificateprovidedto farmersisenoughfortheirevaluationofitseffectontenuresecu- rity,wedidnotgofurtherandelaborateonthepotentialbenefits ofthesecond-stageregistrationandcertification.Itispossiblethat farmersmaynotrealizethepotentialprivatebenefitsrelatedto acomputerizedregistrationsystemsuchasfacilitatedinheritance tochildren.Theresultsshouldthereforebeinterpretedinlightof thesecaveats.TheWTPcashamountswereinflationadjustedto ensurethattheresultsobtainedfromthetwosurveyroundsare comparable.³

Table1indicatesthatmorethan91%ofhouseholdshadtheir landregisteredby2007andthree-fourthshadreceivedalandcer- tificateby2012.In2012,asmanyas96%ofhouseholdswithout certificatesreportinterestinobtainingafirst-stagecertificate,an increaseof4%relativeto2007.Regardingthedemandforsecond- stagecertificates,only54%reportedbeinginterestedinobtaining suchacertificate,a17%declineindemandfrom2007.Thismay beanindicationthatfarmers considerthefirst-stagecertificate

2ThespeciﬁcquestionsarereportedinAppendix.

3Weused2006asabaseyear.Theexchangeratewas8.4EBperUS$inJune2006.

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Table1

Householdlandcertiﬁcationstatusanddemandforsecond-stagecertiﬁcate,OromiaandSNNP.

2007 2012

Percent N^a Percent N^a

Householdswhoselandisregistered 0.91 576 0.94 619

Householdswhohavelandcertiﬁcate 0.68 576 0.74 616

Householdswhodonothavelandcertiﬁcatebutwantone 0.92 186 0.96 161

Wantsecond-stagecertiﬁcatewithmapsforeachplot 0.71 530 0.54 610

Willingtoselllandifitbecomeslegal 0.31 572 0.11 610

Source:Ownsurveydata.

aNreferstonumberofrespondentsforeachquestion.576householdsparticipatedinthelandrelatedquestionsin2007and620in2012.

Table2

Realvalueoflandcertiﬁcate^aandlandin2006Birrandinlabordays.

2007 2012 Medianratio

2012/2007

Median Min Max. CV Median Min Max. CV

MaximumWTPforﬁrst-stagecertiﬁcate 5.75 0.0 959 3.94 3.36 0.0 672 3.00 0.58

MaximumWTPforlostﬁrst-stagecertiﬁcate 5.75 0.0 1918 4.98 3.36 0.0 672 3.00 0.58

MaximumWTPforsecond-stagecertiﬁcateinBirr 9.59 0.0 671 2.16 3.36 0.0 336 3.33 0.35

MaximumWTPforsecond-stagecertiﬁcateinlabordays 3 0.0 160 2.00 2 0.0 30 1.00 0.67

Minimumcompensationacceptableiflandisdemandedfor publicservice(inMillionEBperhectare)^b

0.11 0.0 134 5.95 0.45 0.0 3360 7.71 4.24

Minimumpricetosellland(inMillionEBperhectare)^b 0.11 0.0 7670 17.17 0.67 0.0 1510 6.00 6.34 Source:Ownsurveydata.

aTheWTPforfirst-stagecertificateisreportedforthosewithoutacertificate,WTPforlostfirst-stagecertificateisreportedforthosehouseholdswhoalreadyhaveone.

TheWTPforsecond-stagecertiﬁcateisreportedbythosewhowantasecond-stagecertiﬁcate.Thelandvaluesarereportedbythosehouseholdswhowerewillingtoreport it.

b Minimumlandvaluesarelessthan10,000EBwhichappearaszeroheresincevaluesarereportedinMillionsEB.Eg.0.002.

sufficientandtheirconfidenceinthiscertificatehasgrownover time.Householdsmayalsobewaryofdisplacementiftheyasso- ciate the second round of measurement and registration with possiblestateexpropriationoflandforurbanexpansion.Thisis particularlynotableinShashemenedistrict,whichislocatednear thetownof Shashemene,and thedistrict’s residentshave wit- nessedlandexpropriationinthepast.Afearoftaxincreasesmay beanotherreasonforthedeclineininterestiffarmersreported owningsmallerparcelsthantheyactuallyheldduringthefirst- stageregistration.Duringthesecond-stageregistration,anumber ofsuchcaseswereuncoveredinOromia,possiblyindicatingcor- ruptionorinaccuracyduringthefirst-stageregistration.Thiswas not,however,particularlycommon.

Thetablealsoincludesinformationontherespondents’willing- nesstoselltheirlandifitbecamelegal.⁴Onlyasmallpercentage offarmersindicatedaninterestinsellingtheirfarms.Therateof positive responsesonthis question declinedfrom 31%in 2007 to11% in2012.Thiscouldindicate thatlandhasbecomemore valuabletofarmersorthattheyexpectevenhigherpricesinthe future,meaningthatmostwouldprefertoretaintheirlandforthe present.

Table2presentsinflation-adjustedWTPestimatesforfirst-and second-stagecertificatesin2006EB.ThemedianWTPforafirst- stagecertificatedeclinedfrom5.8EBin2007to3.4EBin2012, whilethemedianWTPforasecond-stagecertificatedeclinedfrom 9.6EBin 2007to3.4 EBin2012.The alternativemedianmea- sure,themaximumWTPforsecond-stagecertificatesinlabordays, alsodeclinedfrom3to2man-daysfrom2007to2012.However, theinflation-adjustedvalueoflandincreasedsubstantially over thisperiod.Theminimumwillingnesstoaccept(WTA)priceper hectareoflandincreasedbybetweenfourandsixfoldoverthe

4 InEthiopia,landisownedbythestateandhencecannotbesoldormortgaged.

Farmershaveonlyuserright.

Table3

Demandforsecond-stagecertiﬁcate.Disaggregatebyyearanddistrict.

District 2007 2012

Interested households(%)

N Interested households(%)

N

Shashemene 92 149 50 96

ArsiNegelle 73 150 59 140

WondoGenet 58 40 48 135

Wollaita 56 191 57 203

Total 71 530 54 610

5yearsbetweenthetwosurveys.⁵Thisgivesusgoodreasonsto questionwhyweseethissignificantdeclineinWTPnotonlyfor second-stagecertificatesbutalsoforfirst-stagecertificates.More- over,themedianWTPweobservedinoursampleismuchlower thanthelowestestimatedcostforsecond-stagecertificates(refer to“Second-stagelandregistrationandcertification”section).

Table 3 provides more disaggregated information on the demandforfirst-stageandsecond-stagelandcertificatesbyyear anddistrict.Thetwofirstdistricts(ShashemeneandArsiNegelle)in theOromiaregionhavecereal-basedproductionandlackirrigation but havegood marketaccess. WondoGenetis a high-potential perennialzone featuringcashcrops,irrigationandgoodmarket access.ThisdistrictwasalsoselectedbyELTAPforsecond-stage certification.Wollaitaisalow-potentialperennialzonecharacter- izedbypoorermarketaccessandveryhighpopulationdensity.We notethatthedemandforsecond-stagecertificatesdeclinesover theperiodfrom2007to2012inallzonesexceptWollaita.

5Asigniﬁcantshareofthesamplerefusedtoassignavaluetotheland,asortof refusaltoacceptthatlandcanbetakenorsold,whichindicatesthesensitivityand insecurityfeltbyfarmers.

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Table4

Medianwillingnesstopayforlandcertiﬁcateandmedianlandvalues,disaggregatedbydistrictandyear.

2007 2012

Shashemene ArsiNegele WondoGenet Wollaita Shashemene ArsiNegele WondoGenet Wollaita MaximumWTPforlost

certiﬁcate

5.75 9.59 9.59 4.79 3.70 6.72 6.72 3.36

MaximumWTPforﬁrst-stage certiﬁcate

9.59 9.59 4.79 3.84 3.36 6.72 6.72 3.36

MaximumWTPfor second-stagecertiﬁcate

9.59 19.18 9.59 9.59 3.36 5.04 5.38 3.36

Minimumcompensation consideredfairiflandis demandedforpublicservice (inMillionsEBperhectare)

0.10 0.11 0.45 0.07 0.90 0.45 0.85 0.27

Minimumpricetosellland(in MillionsEBperhectare)

0.10 0.12 0.45 0.07 1.34 0.74 0.67 0.45

Note:FiguresaremedianWTPin2006EthiopianBirr(EB).

Table5

DistributionofWTPvaluesforsecond-stagecertiﬁcateandhouseholds’landvaluationin2012(in2006EB).

District Willingnesstopayforsecond-stagecertiﬁcate(inEBperhousehold)^a Perhectare(compensation)landvalues(inMillionsEBperhectare)^b

Median Min Max CV Median Min Max CV

Shashemene 3.70 0 336.02 2.73 0.90 0.007 134 3.209

ArsiNegele 4.20 0 33.60 0.92 0.45 0.018 896 6.996

WondoGenet 5.38 0 168.01 2.11 0.85 0.005 3360 5.214

Wollaita 3.36 0 16.80 0.91 0.27 0.002 672 6.736

aReportedforhouseholdswhoreportedinterestinsecond-stagecertiﬁcate.

bReportedforhouseholdswhowerewillingtoreportthelandvalues.

Table4providesdataonmedianWTPin2007and2012inthe samefourdistricts.TheresultsindicatethatthemedianWTPval- uesdeclinedin alldistricts from2007 to2012,particularlyfor second-stagecertificates.Thetablealsocontainsmedianlandval- uesintermsoffarmers’assessmentsoffaircompensationinthe eventofalandtakingortheacceptablesalespriceiflandsales wereallowed.Here,weobserveasharpincrease inlandvalues from2007to2012,particularlyinShashemenedistrict,whichis experiencingrapidurbanization.WondoGenet,thezonefeaturing cashcropcultivationandirrigation,hadthehighestlandvaluesin 2007,butlandvaluesincreasedrelativelylessinthisareathanin theothersfrom2007to2012.ThedecisionbytheELTAP/ELAPto targetWondoGenetforsecond-stagelandcertificationdoesnot seemtohavestimulatedtheinterestinorWTPforsecond-stage certificationinthiscashcroppingareafocusingoncashcrops.A potentialexplanationfor this is thatresidentsalready consider their tenure secure. Shashemene has experienced land takings relatedtourbanexpansion,butthisdoesnotseemtohaveaffected theWTPforsecond-stagecertificates.Thiscouldalsoindicatethat householdsdonotbelievethatthesecertificatesprovidethemwith anyadditionalsecurityormorereliableinformationonlandexpro- priation.Toprovidemoredetailedinformationonvariationacross districts,wepresentthedistributionoftheWTPand landcom- pensationvaluesin2012inTable5.Althoughweonlyreportthe WTPforsecond-stagecertificateforthosehouseholdsinterested inobtainingone,theminimumvalueiszero,indicatingthatsome householdsthatareinterestedinthesecond-stagecertificatedo notwishtopayforit.Thereissubstantiallymorevariationinland valuesthaninWTPvalues.ThereisrelativelylessvariationinWTP forsecond-stagecertificatesacrosshouseholdsinWollaita,which alsohasthelowestaverageWTP.Conversely,thehighestlandval- uesareobservedinShashemene,wherethevariationinevaluations acrosshouseholdsisthelowest.

Asindicatedearlier,husbandsandwiveswerealsoseparately askedtoevaluatetheimportanceof theproposedsecond-stage

certiﬁcate.Theavailableresponsesare:Bad/unnecessary,acceptable/indifferentand good.Table6 summarizestheresponsesof menandwomen.

Approximately40%ofmenandwomen believethatsecond- stagecertiﬁcationisanunnecessaryorbadidea.Proportionately, moremenhaveapositiveattitudetowardsecond-stagecertiﬁca- tionthanwomen.

Wealsoexploredfarmers’perceptionsoftheirtenuresecurity.

We identifiedtwoindicators: (1)whethertheybelievethat the existingfirst-stagecertificatesprotectagainstencroachmentand (2)whetherfarmersfeelsecurethattheywillnotbesubjectto furtherstatelandredistribution.Table7summarizestheresults.

Theresponsestotheﬁrstquestionwereatahouseholdlevel,but wehaveseparateresponsesfrommenandwomenonthesecond question.

Itisclearfromthetablethatfarmersfeeltheyhavebecomemore secureovertimewithrespecttothelandcertificatesprotecting theirlandfromothernon-statethreatssuchasencroachmentby neighbors.Theproportionofhouseholdsthatbelievethattheland certificatewillprotectthemfromencroachmentdoubledoverthe 5yearsbetweenthetwosurveys.Thefearoflandredistribution hasalsodeclinedbutnottoasgreatanextent.Ofthefarmersand theirspouses,one-fifthstillexpectslandredistribution.Thiscould beapotentialsourceoftenureinsecurityandareasonfortheir

Table6

Attitudeofmenandwomentowardsecondstagecertiﬁcatein2012.

Male(%of respondents)

Female(%of respondents)

Indifferent-acceptable 15 25

Good 47 34

Bad-unnecessary 38 41

Observation(N) 579 627

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Table7

Farmers’perceptionoftenuresecurity.

2007(%

respondyes)

2012(%

respondyes) Existinglandcertiﬁcate

protectsagainstland encroachment(household head)

35 72

Expectlandre-distribution (femalerespondents)

32 20

Expectlandre-distribution (malerespondents)

35 21

reluctancetoparticipateinfurtherlandregistration.Furtherefforts toraiseawarenessandassurefarmersmayalleviatesomeoftheir concerns.

Conceptualframeworkandempiricalmodel

We canconceptualize formalization ofland rights asa con- tinuumofformalizationintensityandquality wherethecostof formalizationincreaseswithgreaterintensityandquality.Techno- logicaladvancesimplyareductioninthecoststoachieveagiven intensityofformalization.Thismaybevisualizedasaforwardshift intheformalizationsupplycurve.Identifyingthesociallyoptimal levelofformalizationintensityrequiresidentifyingtheformaliza- tiondemandcurve.Thisdemandcurvewillshiftoutwardwiththe wealthofasociety,thesizeandqualityofland,ascapturedbythe (potential)valueofland,theindividualdemandfortenuresecurity, theextenttowhichsuchsecurityisthreatenedandtheextentto whichformalizedlandrightsarebelievedtoincreasethissecurity.

Thedemandmayalsodependontheexpectationsandqualityof otherservicesprovidedbythelandadministrativesystemsuchas fairconflictresolutioninlanddisputesandtheeffectivenessofthis formalizedsystemrelativetoatraditionalconflictresolutionsys- tem.Thedemandmayalsobeinfluencedbythelevelofknowledge andthusrealismofexpectationsconcerningtheservicesthatcan beprovidedandtheabilitytoaccessthebenefitsofthesystem.

Furthermore,ifformalizationisalsoassociatedwithstrengthening statutorylaw,thismayhaveimplicationsforwhetherthebundleof rightsandobligationsandtheirdistributionamonglandownersare changed.Forexample,ifformalizationiscombinedwithanewpol- icytostrengthenthelandrightsofwomenwithinhouseholds,there isaredistributionalelementthatgoesbeyondrecognizingtheland rightsthatexistedbeforetheformalization.Thismaythenaffect thedemandamongoldandnewrightsholders.Newlawsandreg- ulationsthatgofurtherinspecifyingtheobligationsoflandowners aspartofaformalizationprocess,suchasconservationobligations, mayalsoaffectlandowners’levelofdemandforformalization.

Ouraiminthisstudyistoexaminethedemandforsecond-stage certification.Thesecond-stagecertificate isexpectedtocontain moredetailedandpreciseinformationthanthefirst-stagecertificate.However,it isnotobviousthatthehighlevelofprecision impliedbyasecond-stagecertificateisworththeadditionalcost.

Thelow-cost,participatoryapproachinwhichneighborsserveas witnessesemployedinthefirst-stageregistrationinEthiopiamay provideasubstantiallyhigherlevelofprecisionthanthelow-cost GPSdevicesthathavebeenusedinmostofthepilotareas.The addedvalueofthistechnologyisthereforenotboundaryidentifi- cationandprotectionagainstencroachment,butmapcreationand computerizedregistration.Itisquestionablewhethersuchmaps enhancetenuresecurity.Itisthenappropriatetoaskwhoshould payforsuchintensifiedformalization.Acomputerizedregistrymay facilitatebequeathingoflandtochildren,butownersmaynotbe awareofsuchbenefits,anditisuncertainwhethersucharegistry

wouldsubstantiallyenhanceWTP.Itislikelythatthebenefitsof computerizationandmappingareprimarilysocialandonlytoa smallextentprivate.Thetenuresecurityeffectofformalizationis private,andweshouldexpectittobereflectedinthedemandand WTPforregistrationandcertificates.However,itispossiblethat theentiretenuresecurityeffectiscapturedinthefirst-stagecertification.Thismayalsobethecaseforwomeninthehousehold wherethereisjointcertification.Theotherbroaderbenefitsasso- ciatedwithlandtitling,suchascreditaccessandthetransferability ofland,areirrelevantorlessimportantundertherestrictedrights regimeinEthiopiawherelandsalesandmortgagingoflandare prohibited.

Speciﬁcally,thestudyteststhefollowinghypothesesusingdata fromthe2007and2012surveys.

H1. Demandandwillingnesstopay(WTP)forupgradingtosecond- stagelandcertificationislow:Wearguethattherearefewerprivate benefitstoupgradingtoasecond-stagelandcertificate.Themain privatebenefitofformalizinglandrightsintheEthiopiancontext istenuresecurity,whichisalreadyprovidedbythefirst-stagecertification.

H2. WTPforsecond-stagecertiﬁcateswillbehigherthehigherthe valueofland.Farmerswhohavelargerorhigher-qualityplotsof land,bothintermsofproductivityandlocation,arelikelytopay higherpricestoprotecttheirassets.Thesequalitiesarereﬂected inthesubjectivevalueoftheland,aslandmarketsdonotexistin Ethiopia.

H3. WTPforupgradingfromfirst-stagetosecond-stagecertificate increasesovertime.Thisisbasedontheassumptionthatthebenefits fromthefirst-stagelandregistrationandcertificationdeteriorate overtimeduetopoorupdatingandmaintenanceofrecords;therefore,farmers becomemore interested inupgradedregistration.

Alternatively,wemayarguethat

H4. WTPforsecond-stagecertificatesdeclinesovertimeduetoa lossofmomentuminthelandregistrationandcertificationprocess andreducedexpectationsconcerningbenefitsfromupgrading.This couldalsoresultfromabeneficialeffectoffirst-stagecertification ontenuresecuritythatisenhancedovertime.

H5. WTP is higherfor households that have beenexposed to informationalmeetingsconcerningthebenefitsoflandregistration andcertification.Informationsuchastheimplicationsofacom- puterizedregistrationsystemregardingfacilitatinglandtransfers throughbequestsandgiftsmaycreategreaterinterestanddemand insecond-stagecertificatesinfarmingcommunitieswithlowlevels ofliteracy.

H6. WTPishigherforhouseholdsthatlackwitnessesfortheirplot boundariesfromtheﬁrst-stageregistrationorhaveexperienced landdisputes.Thisissimplybecausesuchhouseholdsmayhope togainadditionalsecuritythroughanewlandregistrationsystem andobtaincertiﬁcatesthatincludemapsofindividualplots.

Theempiricalmodelforthewillingnesstopayforasecond- stagecertiﬁcateisgivenby:

WTP2Cht =ˇ0+ˇ1Aht+ˇ2Cht+ˇ3RQ_ht+ˇ4CY_ht+ˇ5Mh+ˇ6Vh

+ˇ7Dt+˛h+εht

whereWTP2C_htisthewillingnesstopayforasecond-stagecertifi- cateforhouseholdhinperiodt,Aisfarmsize,Cisadummyfor exposuretolandconflicts,RQisregistrationquality,CYislandcer- tificateinformation,includingwhetheronepossessedafirst-stage landcertificateandwhosename(s)is/areonthecertificate,Misa dummyforwhetherthehouseholdhasbeenexposedtoinforma- tionalmeetingsregardinglandcertification,Visavectorofvillage dummies,whichcapturesmarketaccess,populationpressureand

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urbanexpansion,Disayeardummy,˛hrepresentsunobservable householdfactors,andεhtisarandomerrorterm.

Thehousehold-levelWTPisgiven bothincash andin labor.

Asindicatedabove,approximately30%ofhouseholdsin2007and 46%in2012werenotinterestedin thesecond-stagecertiﬁcate.

Thus,weonlyobserveWTPvaluesforthosewhoexpressinterest inobtainingone.OrdinaryLeastSquares(OLS)isnotanappropriate regressionframeworktoestimatethemodel,asitdoesnotcontrol forthecensoringoftheWTPvaluesatzeroandmaythusresult innegativepredictedvalues.Thismodelisbestestimatedusing Cragg’s(Cragg, 1971)two-part truncatednormal hurdlemodel.

Cragg’sspecificationdisaggregatesthedecisionintoaparticipa- tionequationandanamountequationandyieldspositivepredicted valuesfortheamountequation.Thismodelspecificationemploysa probitfortheparticipationequationandatruncatednormalmodel fortheamountequation.Themodelassumesthat,conditionalon asetofobservedcovariates,themechanismsdeterminingpartici- pationandamountsareindependent.InourWTPmodel,thetwo componentsare:(1)aprobitmodelfor‘interestinasecond-stage certificate’usingthefullsampleand(2)atruncatednormalmodel for‘maximumwillingnesstopay’usingthesub-sampleofinter- estedhouseholds.

Because we are using paneldata, we can control for unob- servedheterogeneityinadditiontotheobservedcovariates.Inour model,weemployaCorrelatedRandomEffect(CRE)modelfollow- ingMundlak(1978)andChamberlain(1982)becauseﬁxedeffects estimationisdifﬁculttoimplementfornonlinearmodelsdueto theincidentalparameterproblem.TheestimationprocedureinCRE involvesaddingthemeanoftime-varyingvariablesasanadditional setofexplanatoryvariables.Theinclusionofthesemeanscontrols fortime-constantunobservedheterogeneity(Wooldridge,2010).

Resultsanddiscussion

Estimationresult

TheresultsoftheDouble-HurdlemodelarereportedinTable8.

Thefirsttwo columnsreporttheresultsfromtheprobitmodel fortheprobabilityofbeinginterestedinsecond-stagecertificate (hurdle1).Thenextfourcolumnsreportresultsfromthetrun- catedregressionmodelsforWTP(hurdle2).⁶Theobservationsin theprobitmodelincludeallhouseholdsinbothperiods,whilethe truncatedregressionmodelincludesonlythosehouseholdsthat areinterestedinasecond-stagecertificate.WeestimatedWTPin bothcash(middletwocolumns)andlabor-days(lasttwocolumns).

Wefirstanalyzethefactorsinfluencingtheprobabilityofbeing interestedinasecond-stagecertificate.Wefindthathouseholds thatexperienced a landdisputebeforethefirst-stageland registration was implemented are more likely to be interested in a second-stage certificate, indicating that experiences of con- flictresultingreatertenureinsecurityandthusgreaterdemand forcertificatesbeyondwhatthefirst-stagecertificateshavepro- vided.Respondentswhoattendedpublicinformationalmeetings regardinglandregistrationarealsomorelikelytobeinterestedin asecond-stagecertificate.Thisisperhapsbecausetheyaremore informedoflandregistration,thevarioustypesofcertificatesand theirbenefits.However, households thatreported havingsuffi- cientwitnessesduringthefirst-stageregistrationarelesslikelyto wishtoobtainasecond-stagecertificate,indicatingthatthefirst- stagecertificateprovidessufficientplotboundarysecurityforsuch

6Itispossiblethatthetwodecisionsarecorrelated,evenaftercontrollingfor observedcovariates.Ifthisisthecase,theWTPequationhastobecorrectedfor selection.OurtestforselectionbiasusingtheHeckmanselectionmodeldoesnot indicateaselectionproblem.

households.Havingalandcertificatewasnotsignificantlyassoci- atedwithinterestinsecond-stagecertificates,buthouseholdsthat onlyhavethehusband’snamelistedonthefirst-stagecertificateare lesslikelytoexhibitinterestinsecond-stagecertificates.Wemay speculatethatmaleheadsofhouseholdsperceivetheretobean advantageofretainingthecertificatethatonlyincludestheirname insteadofobtainingasecond-stage certificatethatmayinclude boththehusband’sandhiswife’snames.Theageofhouseholdhead wasnegativelyassociatedwithinterestinobtainingasecond-stage certificate,whichcouldbebecauseolderhouseholdheadsfeelmore securewithrespecttotheirlandtenure.However,itcouldalsobe duetoresistancetochange,astheyhavewitnessedfrequentland redistributionsinthepast.Controllingforotherfactors,interest inobtainingasecond-stagecertificatedeclinedsignificantlyfrom 2007to2012,indicatingthatthedeclineinmomentumandfarm- ers’expectationsregardingsecond-stagecertificationdominates anyconcernfarmersmighthaveconcerninganerosionoftheben- efits offirst-stagecertification. Wealsofindthat householdsin WondoGenetandWollaita,thetwomostdenselypopulatedareas, arelesslikelytoexhibitinterestinsecond-stagecertificatesthan householdsinShashemene.

Wenextexaminefactorsthatinﬂuencethewillingnesstopay (WTP)forsecond-stagecertiﬁcatesamonginterestedhouseholds.

Farmsizeisnownegativelycorrelatedwiththewillingnesstopay, whetherreportedin cashorinlabor-days.Thiscouldbealand scarcity effect,suchthat moreland-scarcehouseholds arewill- ingtopaymoretosecuretheirrights,ceterisparibusHowever, iflandscarcityiscorrelatedwithpovertyandpoormarketaccess, thiscouldlimitWTPandpossiblyexplainthelowerWTPobserved in Wollaita.ComparedtoShashemene, theWTP forhouseholds inWollaitawas17%and8%lowerincashand inlabor,respec- tively.Similarly, WTPdeclinedsignificantly from2007to2012, with a 5% decline in WTP in cash and a 1.5% decline WTP in labor.Alloftheabovevariablesweresignificantatthe1%signifi- cancelevel.Female-headedhouseholdswerenomoreorlesslikely thanmale-headedhouseholdtodemonstrateinterest inobtainingasecond-stagecertificate.But,amonginterestedhouseholds, female-headedhouseholdshad6.7%lowerWTPincashbuttheir WTPinlaborwasnotstaticallydifferentfromthatofotherhouse- holds.Thismayberelatedtothegreaterliquidityconstraintfaced bymostfemale-headedhouseholdsinruralareas.Attendingapub- licmeetingbeforeregistrationwaspositivelycorrelatedwithWTP, butitwasonlysignificantatthe10%level.Havingonlythehus- band’snameonthecertificatewasnegativelycorrelatedwithWTP inthelaborequationbutonlysignificantatthe10%level.

Itispossiblethattherearetwoforcesworkinginoppositedirec- tionswithrespect tofarm size.On the one hand,as farmsize typicallyaffectsthevalueofthelandforwhichasecond-stagecer- tificatemaybeissued,thewillingnesstopaymaybehigherfor largerfarms.Ontheotherhand,afearoflandexpropriation,which maybemorepronouncedonlargerfarms,maynegativelyinfluence theWTPforthenewcertificate.Althoughlandsalesareprohibited inEthiopia,andfarmershaveonlyuserrights,theyhaveasubjec- tivevaluationoftheirlandthatdepends,amongotherthings,on farmsize,thequalityoftheland,theproximitytourbanareas,the presenceofirrigationandhouseholdcharacteristics.Table9reports estimationresultsfromtheregressionmodelsthatincludefarm- ers’subjectivevaluesoftheirland.Thesevaluesaretheminimum compensationhouseholdswerewillingtoacceptintheeventthat theirlandisexpropriatedforpublicuse.Becauseasignificantper- centageofhouseholdswereunwillingtoreportthesevalues,the numberofobservationsconsideredinthisanalysisisreducedby 40%.Weincludethismodeltoassesstherobustnessofourresults.

Inadditiontothelandvalues,wealsoallowedforvariationinthe WTPforlandofasimilarvaluedependingonhownearahousehold islocatedtoanurbanareausingadummyvariablethattakesvalue