Land reform, distribution of land and institutions in rural Ethiopia: Analysis of inequality with dirty data

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Land reform, distribution of land and
institutions in rural Ethiopia Analysis of
inequality with dirty data

• Bereket Kebede
• School of Development Studies, University of East
  Anglia (UEA)
• and
• Centre for the Study of African Economies (CSAE),
  Oxford University
• 12-13 October 2006
• Addis Ababa

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Structure of presentation

1. Research questions
2. Data and general patterns in land distribution
3. Methodology
4. Empirical results
5. Link between current distribution and old
   tenures?
6. Conclusions

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1. Research questions

• Widespread acceptance that
• rural land distribution is highly equitable in
  Ethiopia (for example compared to other African
  countries with private land ownership)
• no strong link between current land distribution
  patterns and pre-reform tenures seldom are
  current distribution patterns related to
  pre-reform distributions

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1. Research questions (contd)

• The low of level of income inequality is
  consistent with the overall picture of Ethiopia
  as a very poor country, with a low per capita
  income. In addition, the egalitarian land
  holding system might have contributed to a more
  equal income distribution in rural Ethiopia.
  (FDRE, 2002 italics mine)

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1. Research questions (contd)

• This paper is an attempt to argue, in broad
  terms, that the social homogeneity in rural
  Ethiopia today, which is in large measure a
  consequence of the land system, is an inhibiting
  factor for agrarian development. (D. Rahmato,
  2005 italics mine)

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1. Research questions (contd)

• This study questions the two widely accepted
  views
• Is rural land distribution in Ethiopia highly
  equitable as generally accepted?
• Is there a link between current land distribution
  patterns and pre-land reform tenures?

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1. Research questions (contd)

• Main conclusions from this study
• rural land distribution in Ethiopia is not as
  equitable as generally accepted for example, it
  is as inequitable as, if not more inequitable, as
  in some other African countries with private
  ownership and land markets
• post-reform land distribution is probably
  partially explained by pre-reform land tenures

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2. Data and general patterns in land distribution

• Data from Ethiopian Rural Household Surveys
  (ERHS)
• Covered 15 villages/sites (1500 households) in
  the main settled agriculture farming systems
• Longitudinal survey 1989, 1994-95 (3 rounds),
  1997, 1999, 2004
• This study used data from 1995-1997 20 years
  after land reform

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2. Data and general patterns in land distribution
(contd)

• Distribution of what?
• PA allocated land or cultivated land?
• Total household or per capita or per adult
  holdings of households?
• Focuses on PA allocated land and looks at
  household, per capita and per adult holdings

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Summary statistics PA allocated land (ha.) PA allocated land (ha.) PA allocated land (ha.)
Summary statistics Total Per capita Per adult
Mean 1.688 0.335 0.586
Median 1.000 0.188 0.313
1 0.000 0.000 0.000
5 0.000 0.000 0.000
95 5.500 1.125 2 .000
99 9.688 2.125 4 .000
For village mean and median figures see Table 3 For village mean and median figures see Table 3 For village mean and median figures see Table 3 For village mean and median figures see Table 3
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2. Data and general patterns in land distribution
(contd)

• Do PAs compensate with quality for size of land?
• If size and quality of land are strongly
  negatively related, use of land holdings for
  analysing distribution would be problematic
• Quality of land indicators are not significantly
  correlated to size of land after controlling for
  village level fixed effects (see Table 1)

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3. Methodology

• If data are completely unreliable, of course
  dont use them
• the survey data compares well with others
  including nationally representative samples
• But inequality measures can be sensitive even for
  minor contamination
• Dirty data may arise due to
• errors in collection, coding, transcribing, etc.,
  of data
• under (over) reporting by respondents
• but also from true outliers influential
  observations (observations with high leverage)

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3. Methodology (contd)

• Does G Lorenz dominates F?

?µ(Fe(z))
G
Fe(z)
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3. Methodology (contd)

• Sensitivity of inequality measures to data
  contamination at high and low incomes vary
• Generalised entropy index with agt1 very
  sensitive to high incomes
• Generalised entropy index with alt0 and Atkinson
  index with egt1very sensitive to small incomes
• Middle level values have small influence

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Values of IF for inequality measures for 10
highest, middle smallest observations (Cowell
Flachaire, 2002)
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3. Methodology (contd)

• Re-estimating inequality measures using trimmed
  distributions to see how robust are results to
  outliers
• In our case trimming from above is the more
  appropriate procedure because
• zeros represent important phenomenon
  landlessness (not the same as with zero incomes)
• generally influence of lower values smaller than
  higher values

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4. Empirical results

• A cursory look at
• Box and Whiskers graphs
• Cumulative distributions
• Non-parametric kernel densities
• makes one suspect that there could be some
  influential observations significantly affecting
  inequality measures

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Box and whiskers graph for total PA land
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Box and whiskers graph for PA land per capita
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Box and whiskers graph for PA land per adult
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Box and whiskers graphs for total PA land by
village
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4. Empirical results (contd)

• Even after treating influential observations
  inequality measures are high (Table 4)
• Gini coefficients range from
• 42-56 for total
• 44-59 for per capita
• 44-60 for per adult
• These are within the same range or higher than
  estimates for other African countries (see Table
  5)

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4. Empirical results (contd)

• As expected, inequality within villages more
  sensitive to treatment (Table 6)
• partly due to lower number of observations
• but still significant levels of within village
  inequality
• with 5 trimming from top, Gini ranges from
  23-62
• Lower but still significant intra-village
  inequality

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4. Empirical results (contd)

• Looking at whole distributions for villages after
  treatment
• Lorenz (relative) curves of some villages
  dominate others - first order stochastic
  dominance
• Generalised Lorenz curves of some villages
  dominate others - second order stochastic
  dominance
• There are significant regional inequalities in
  size as well as distribution of land

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5. Link between current distribution and old
tenures?

• Why should we expect a link between pre- and
  post-reform distributions?
• 1. Significant amounts of land held by households
  in 1995 were acquired from pre-reform periods
• on the average, 36.6 of household land holdings
  in 1995 were acquired through pre-land reform
  inheritance and purchases!
• for some villages pre-land reform inheritance and
  purchases accounted for the majority of land
  holding in 1995
• Adele Keke Adadogt90
• Imdibir Aze Deboagt80
• Gara Godo 70
• Haresaw 41

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5. Link between current distribution and old
tenures? (contd)

• 2. No strict national level guideline/rule for
  allocation of land by PAs
• Family size considered as rough guide but can be
  interpreted in different ways
• If PAs were left to their own device, wouldnt
  the different land tenures within which farmers
  previously lived in influence the way they
  allocate land after reform?

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5. Link between current distribution and old
tenures? (contd)

• For a proper analysis an economic history
  approach is required
• detailed information on land tenure in each
  village before the land reform
• how post-reform distribution was done over time
  in villages
• examine if the pattern of distribution after
  reform systematically varied with pre-reform
  tenures

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5. Link between current distribution and old
tenures? (contd)

• If the current distribution is at least partly
  influenced by pre-reform tenures, the current
  distribution may contain some information on
  previous tenures
• Classified the villages into four
• villages where the rist tenure (inheritance
  through ambilineal/cognatic descent) was dominant
  (group 1)
• Non-rist tenures but with significant changes in
  traditional tenures (commercialisation,
  settlement, etc.) (group 2)
• Non-rist tenures with traditional systems
  preserved (group 3)
• a resettlement village established after the land
  reform (group 4)

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5. Link between current distribution and old
tenures? (contd)

• Gini coefficients for the four groups (Table 7)
• as expected the lowest Gini is in re-settlement
  village
• villages located in previous more traditional
  tenures (both rist and non-rist) have higher
  inequality
• If these results capture features of
  distributions before the reform ? more
  individualised (privatised) tenures were more
  egalitarian

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5. Link between current distribution and old
tenures? (contd)

• The Lorenz curve for group 4 (re-settlement
  village) dominates all as expected
• The Lorenz curve for group 2 (non-traditional)
  dominates that for group 1 (rist) 3 (non-rist)
  higher equality in those villages that have
  passed through more individualised tenures

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6. Conclusions

• The land reform didnt seem to have significantly
  solved the problem of inequality as usually
  assumed
• Distribution of land is part of a wider dynamic
  distribution of social, economic and political
  power
• PA allocation influenced by livestock ownership,
  demographics, etc.
• Land reform created an institutional barrier to
  rural-rural migration and hence to regional
  inequality
• The reform couldnt avoid the development of
  significant landlessness