Three essays on the economics of land title in Kenya

Date of Completion

January 2003

Keywords

Economics, Theory

Degree

Ph.D.

Abstract

I apply economic theory in the analysis of land title institution as an important component of land reform in Kenya. In chapter 2, I examine the role of title registration in providing security of property rights for landowners. A simple model is developed to examine the trade-off between increased security of registering title against the administrative cost of accessing the system. The model predicts that the demand for registration should be increasing in the value of land, the education of the landowner, and proximity to the central government. Evidence on land registration in Kenya provides support for the model. ^ In chapter three, I develop a simple model of a landowner's problem of seeking a land control board's approval in order to deal with his or her land. The model is based on tradeoffs between the board's legal consent that formalizes any land transaction and cost of seeking the board's approval. In the model, the landowner faces the risk of the board rejecting his or her application for consent and possibility of losing ownership through non-consensual means if the consent is denied. The model provides theoretical support for the argument that higher values of parcels and lower transaction cost will increase the likelihood of seeking the board's approval. Using farm-level cross-sectional data the chapter empirically demonstrates that the land control board has impacted the title registration. Two conjectures on boards' behavior are made based on efficiency and rent-seeking models respectively. Anecdotal evidence provides support for the rent-seeking model. ^ In chapter 4, I develop a simple model of land title reform which shows that a policy of voluntary adoption of a new system is not likely to be successful, even if the new system Pareto dominates the existing one. The problem is the existence of an externality that prevents individual landowners from fully internalizing the benefits of the new system. Some evidence for the theory is presented based on historic efforts to institute land registration in the United States and England, as well as ongoing attempts by Kenya to establish formal property rights systems for land. ^

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