Land Rights and Economic Development: Evidence from Vietnam

This paper examines the impact of a land reform in Viet Nam which gave households the power to exchange, transfer, lease, inherit and mortgage their land-use rights. We expect this change to increase the incentives as well as the ability to undertake long-term investments on the part of households. Our difference-in-differences estimation strategy takes advantage of the variation across provinces in the issuance of land-use certificates needed to enforce these rights. Our results indicate that the additional land rights led to significant increases in the share of total area devoted to multi-year crops, as well as some increase in irrigation investment. These effects are stronger in areas which felt the impact of the land reform earlier. ∗We thank Abhijit Banerjee, Esther Duflo, Jonathan Haughton, Simon Johnson and participants at the MIT Development Economics lunch, Suffolk University economics seminar and the Spring Meeting for Young Economists for very helpful comments and suggestions. Special thanks go to Mr. Nguyen Phong and the General Statistical Office, Hanoi, for allowing us to access the Viet Nam Living Standards Survey; to Mrs. Tran Thi Minh Ha, Mr. Do Duc Doi, Mr. Quach Cong Huan and the General Department of Land Administration, Hanoi, for providing us with land registration data; and to Ms. Le Thi Thanh Loan for access to the Agricultural Census. We also thank Christopher Gibbs and Vu Quoc Huy for helpful discussions, and the MIT Schultz Fund for financial support. †[email protected] ‡[email protected]