Economic development involves specialization and movement of labor out of agriculture. An inability to formally trade or lease land will impede structural change, land market imperfections have been identified as key contributors to factor misallocation in agriculture (Restuccia and Santaeulalia-Llopis 2015). Limited tradability of untitled land across farmers results in land misallocation and distorts individuals’ occupational choice between farming and working outside agriculture, with potentially far-reaching impact (Chen 2017).

The importance of land rights documentation to facilitate long-term land transfers and occupational shifts out of agriculture is supported by the migration-enhancing impact of community land rights certification in Mexico, an effect that was particularly pronounced for households with weaker initial rights (de Janvry _et al._ 2015) and possibly mediated via inheritance (Valsecchi 2014). Reforms affecting transferability of land had large impacts on migration historically (Chernina _et al._ 2014) and on female labor force participation and wages (Emran and Shilpi 2017). Broad distribution of property rights in the US is seen as fundamental to participation in capital markets, use of land as collateral, and access to opportunity (Libecap 2018).

Documented land rights allow realizing the full potential from trade in land and its use as collateral in financial markets if authoritative information on the assignment of property rights is available at low cost, normally from public registries (Arrunada 2009). Credit impacts from land titling can be expected if land markets are sufficiently fluid and third parties such as mortgage lenders can easily access registries to get reliable land ownership information. If these conditions do not hold, credit effects of land titling may be absent or limited to the better off (Carter and Olinto 2003). Simple measures to reduce transaction costs and improve the quality of information, such as computerization can affect credit volume and the number of mortgages, as documented in India (Deininger and Goyal 2012) and, by enhancing access to digital savings and loan products, the rapid spread of digital handsets opens up opportunities in this space (Bharadwaj _et al._ 2019).

# **2.2 Policy issues related to recognition of customary tenure**

Despite the advantage of having formally documented land rights, up to 90% of households in Africa hold land without a title under customary tenure (Deininger 2003). Some interpreted this as a sign of the issue being irrelevant, as a title does not add beyond existing arrangements (Pinckney and Kimuyu 1994). Three main reasons for continued existence of customary systems are normally advanced; namely, (i) benefits of customary tenure (e.g., risk-diversification) may outweigh benefits of tradability; (ii) establishing and maintaining a system of land titles may cost more than the value of the benefits it provides; and (iii) efforts to increase tenure security can trigger political resistance.

The transferability limitations inherent to customary systems are a choice that trades off the benefits, e.g., increased productivity from market exchange, versus the cost, in particular, the danger of landlessness that 6