The Effect of Land Tenure Institutional Factors on Small Landholders' Sustainable Land Management Investment: Evidence from the Highlands of Ethiopia

Sustainable Land Management (SLM) is one of the key policy responses being implemented to curb land degradation in the highlands of Ethiopia. However, there is scant evidence to what extent Land Tenure Institutional Factors (LTIFs) influence small landholders' on-farm investment in SLM. The overall objective of this study is, therefore, to understand the extent to which LTIFs influence on-farm SLM investment in the highlands of Ethiopia through unbundling tenure security (de jure, de facto, and perceived) across a bundle of rights. Survey data were collected between April and May 2021 from 2296 smallholder households and 6692 parcels of 19 highland woredas (districts) in three regional states (Amhara, Oromia, and SNNP) in Ethiopia. A probit regression model was used to estimate the average marginal effects of LTIFs quantitatively and supported by an in-depth qualitative analysis. The results revealed that 10 out of 16 LTIF-related variables have significantly influenced households' on-farm investment in SLM with average marginal effect ranging from a minimum of 3% (tree tenure security risks) to a maximum of 14% (possession of land certificates), at 95% confidence interval, compared to a mean probability of 45%. The results also revealed that some of the households' socio-economic and demographic factors and parcel-specific variables have significantly influenced on-farm SLM investment. These imply two policy issues. Firstly, it strengthens the notion that security of tenure may be a necessary condition, but not a sufficient, factor to incentivize smallholders' on-farm SLM investment. Secondly, an in-depth analysis of the security of tenure categories across a bundle of rights is necessary to help formulate context-specific SLM policy and strategy incentivizing smallholders' on-farm SLM investment.