Land Tenure Security, Investment and the Environment in Ghana

Abstract

Using a nationally representative data obtained from a survey, this study attempts to examine empirically two main issues: first, the causal relationship between land tenure security and investment and secondly, the impact of tenure security (land rights) on environmental degradation. Analysis of the results indicates that investment in farmlands in Ghana is low and appears not to enhance tenure security and that the reverse causation of tenure security enhancing investment seems non-existent. This implies that agricultural investments in the country are not security-induced and that investment is not an important determinant of tenure security. However, tenure security appears to be an incentive for investment in that when endogeneity was not controlled, tenure security had a positive and significant impact on investment though the result is not robust. This implies that farmers with tenure security are more likely to invest in their lands, which may eventually lead to higher productivity. Furthermore, our results indicate that tenure security (land rights) has no significant impact on environmental degradation apart from the destruction of vegetation cover, which appears to be a major environmental problem in Ghana. General and specific policy recommendation aimed at improving tenure security and investment in land are explored.