the imperial regime. The Marxist government taking power in 1975 transferred ownership of all rural land to the state, established peasant associations at the village level, and embarked on massive collectivization. Together with lack of public investment, this led to rapid declines in productivity which, with a rapidly growing population, and caused widespread soil degradation and erosion (Kebede 2002). Following the overthrow of the Marxist regime in the early 1990s, intentions to move more decisively towards a system of private land ownership did not fully materialize. In fact, the 1995 constitution highlights that ownership of land is with the state and upholds the right of every Ethiopian who wants to engage in agriculture to receive inheritable use rights to a piece of land for free, a principle that can be enforced through administrative reallocation of land but that will likely conflict with the goal of ensuring land users’ tenure security. Subsequently, a 1997 federal proclamation (law) devolved responsibility for land policy to the regions, leading to considerable diversity in key provisions as illustrated below.

First, the fact that administrative redistribution of land is not an empty threat is illustrated by the fact that such action, partly in pursuit of political ends (Ege 1997), was carried out in Amhara as recently as 1997. In fact, a number of surveys highlight that a large number of farmers expect a redistribution in the near future and that this reduces investment (Deininger and Jin 2006) and a desire to prevent this has led Amhara to more strictly circumscribe conditions for redistribution.<sup>2</sup> Second, although land transfers via rental have been allowed officially, award and continued enjoyment of land use rights is contingent on physical residence in the village, something that may prevent migration from rural areas (Rahmato 2003). Moreover, all regions except Amhara have legal provisions limiting the amount of land to be rented out -normally to 50% of holding size and setting a maximum duration for rental contracts.<sup>3</sup> Third, mortgaging and sale of land are prohibited everywhere. Finally, a 2005 federal proclamation aims to re-establish central guidance without clarifying how conflicts with existing regional laws are to be resolved. Together with a number of grey areas in the proclamations that are not resolved by regulations,<sup>4</sup> this leads to confusion and provides scope for bureaucratic discretion. Certification of land rights cannot eliminate systemic uncertainty of this type but is likely to reduce its impact on investment or land transfers, something that needs to be borne in mind when interpreting our empirical findings.

# **2.3 Data sources and characteristics of the sample**

To reduce widespread tenure insecurity and its negative impacts on investment, the country’s main regions started, in 2003, to implement a program of land certification modeled on an effort in Tigray during the late 1990s. To assess key elements of the process and potential impacts, we draw on the second round from a

> 2 For example, in Amhara redistribution is only possible if it is approved by more than 80% of the land using households in the village. 3 Rental contracts under “traditional” technology are limited to 3 years everywhere except Amhara (where land can be rented for up to 25 years) while those involving “modern” technology are allowed for up to 20 years in Tigray, 15 years in Oromia, and 10 years in SNNPR. All contracts longer than 2 years in Tigray and SNNPR and 3 years in Amhara and Oromia need to be registered although few guidelines exit on how to do so. 4 For example, regulations everywhere are silent on whether long-term rental contracts entered into by a person who subsequently finds a non-farm job will have to be honored or not.

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