We study the impact of land rights’ formalization on the functioning of informal insurance and land re-allocations in Ghana’s rural communities. First, we provide empirical evidence suggesting that communities holding more formal land titles enjoy higher land security, as measured by number of disputes due to multiple claims over land. Second, we find that land re-allocations are more intense in those places, leading to increases in agricultural productivity and average consumption. Third, we show that communities with higher formality of land rights enjoy improved risk-sharing against idiosyncratic shocks. Motivated by this evidence, we develop a dynamic model of land and risk sharing subject to limited commitment constraints, where the equilibrium degree of co-operation is determined by the degree of formal land rights chosen. We show that the model can rationalize our empirical findings and can serve as a useful quantitative laboratory. Most interestingly, we find that although positive in the data, the effects of increasing land rights may be highly non-linear as at some point they may lead to a complete unraveling of informal co-operation in rural economies.
Zoom Link: https://uoc-gr.zoom.us/j/88659969718?pwd=g6bjYPDCuUQo1bzVxjjbgQL4xFN1f3.1
