Land tenure security and investment incentives: puzzling evidence from Burkina Faso

The commonsense logic associating higher land security and higher incentives to invest has been recently called into question in the case of African agriculture. To be meaningful, empirical tests have to be carefully designed so as to take account of the possible endogeneity of the land rights variable. This is done in this paper by applying suitable econometric methods to the original data collected in Burkina Faso. The results obtained cast doubt on the existence of a systematic influence of land tenure security on investment. By reviewing the justifications for scepticism in the recent literature, we are able to conclude that the traditional village order, where it exists, provides the basic land rights required to stimulate small-scale investment. (C) 2002 Elsevier Science B.V All rights reserved.