The Emergence of Land Markets in Africa

CHAPTER 3

Land Rental Markets

Transaction Costs and Tenure Insecurity in Rural Ethiopia

KLAUS DEININGER, DANIEL AYALEW ALI,

AND TEKIE ALEMU

n situations in which the distribution of land ownership is different from the operationally optimal level, reallocation mechanisms—such as rental markets—that transfer this factor to its most productive use play a key role in increasing total production and enhancing economic efficiency. Historically, when most of the land was cultivated under rudimentary traditional technology and nonagricultural labor markets were virtually nonexistent, the majority of such land transactions occurred between large landlords, ...