Person:
Ali, Daniel Ayalew

Development Research Group, World Bank

Fields of Specialization

Agriculture and Rural Development, Land Economics

ORCID

0000-0002-3253-4897

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Google Scholar

Departments

Development Research Group, World Bank

Last updated January 31, 2023

Biography

Daniel Ayalew Ali is a senior economist at the agriculture and rural development unit of the research department of the World Bank. His main research area is applied microeconomics with a focus on Africa and rural issues: property rights, contracts in land and investment incentives, impact evaluation, risk coping and management. He has done extensive research on the impact evaluation of land related projects in Ethiopia, Rwanda, Tanzania, Nigeria and Ghana. He received his PhD in Economics from the Catholic University of Leuven, Belgium.

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Publication Search Results

Now showing 1 - 10 of 40

Impacts of Land Certification on Tenure Security, Investment, and Land Markets : Evidence from Ethiopia

(World Bank, Washington, DC, 2008-10) Deininger, Klaus ; Ali, Daniel Ayalew ; Alemu, Tekie

Although early attempts at land titling in Africa were often unsuccessful, the need to secure rights in view of increased demand for land, options for registration of a continuum of individual or communal rights under new laws, and the scope for reducing costs by combining information technology with participatory methods have led to renewed interest. This paper uses a difference-in-difference approach to assess economic impacts of a low-cost registration program in Ethiopia that, over 5 years, covered some 20 million parcels. Despite policy constraints, the program increased tenure security, land-related investment, and rental market participation and yielded benefits significantly above the cost of implementation.
Rural Land Certification in Ethiopia : Process, Initial Impact, and Implications for Other African Countries

(World Bank, Washington, DC, 2007-04) Deininger, Klaus ; Ali, Daniel Ayalew ; Holden, Stein ; Zevenbergen, Jaap

Although many African countries have recently adopted highly innovative and pro-poor land laws, lack of implementation thwarts their potentially far-reaching impact on productivity, poverty reduction, and governance. The authors use a representative household survey from Ethiopia where, over a short period, certificates to more than 20 million plots were issued to describe the certification process, explore its incidence and preliminary impact, and quantify the costs. While this provides many suggestions to ensure sustainability and enhance impact, Ethiopia's highly cost-effective first-time registration process provides important lessons.
Do Overlapping Property Rights Reduce Agricultural Investment? Evidence from Uganda

(World Bank, Washington, DC, 2007-08) Deininger, Klaus ; Ali, Daniel Ayalew

The need for land-related investment to ensure sustainable land management and increase productivity of land use is widely recognized. However, there is little rigorous evidence on the effects of property rights for increasing agricultural productivity and contributing toward poverty reduction in Africa. Whether and by how much overlapping property rights reduce investment incentives, and the scope for policies to counter such disincentives, are thus important policy issues. Using information on parcels under ownership and usufruct by the same household from a nationally representative survey in Uganda, the authors find significant disincentives associated with overlapping property rights on short and long-term investments. The paper combines this result with information on crop productivity to obtain a rough estimate of the magnitudes involved. The authors make suggestions on ways to eliminate such inefficiencies.
Property Rights in a Very Poor Country : Tenure Insecurity and Investment in Ethiopia

(World Bank, Washington, DC, 2007-09) Ali, Daniel Ayalew ; Dercon, Stefan ; Gautam, Madhur

This paper provides evidence from one of the poorest countries of the world that the property rights matter for efficiency, investment, and growth. With all land state-owned, the threat of land redistribution never appears far off the agenda. Land rental and leasing have been made legal, but transfer rights remain restricted and the perception of continuing tenure insecurity remains quite strong. Using a unique panel data set, this study investigates whether transfer rights and tenure insecurity affect household investment decisions, focusing on trees and shrubs. The panel data estimates suggest that limited perceived transfer rights, and the threat of expropriation, negatively affect long-term investment in Ethiopian agriculture, contributing to the low returns from land and perpetuating low growth and poverty.
Assessing the Functioning of Land Rental Markets in Ethiopia

(World Bank, Washington, DC, 2007-12) Deininger, Klaus ; Ali, Daniel Ayalew ; Alemu, Tekie

Although a large theoretical literature discusses the possible inefficiency of sharecropping contracts, the empirical evidence on this phenomenon has been ambiguous at best. Household-level fixed-effect estimates from about 8,500 plots operated by households that own and sharecrop land in the Ethiopian highlands provide support for the hypothesis of Marshallian inefficiency. At the same time, a factor adjustment model suggests that the extent to which rental markets allow households to attain their desired operational holding size is extremely limited. Our analysis points towards factor market imperfections (no rental for oxen), lack of alternative employment opportunities, and tenure insecurity as possible reasons underlying such behavior, suggesting that, rather than worrying almost exclusively about Marshallian inefficiency, it is equally warranted to give due attention to the policy framework within which land rental markets operate.
Is There a Farm-Size Productivity Relationship in African Agriculture? Evidence from Rwanda

(World Bank, Washington, DC, 2014-02) Ali, Daniel Ayalew ; Deininger, Klaus

Whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in Africa is of considerable policy relevance. This paper revisits this issue and examines potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector. Nationwide plot-level data from Rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications. The inverse relationship continues to hold if profits with family labor valued at shadow wages are used, but disappears if family labor is rather valued at village-level market wage rates. These findings imply that, in Rwanda, labor market imperfections, rather than other unobserved factors, seem to be a key reason for the inverse farm-size productivity relationship.
Credit Constraints, Agricultural Productivity, and Rural Nonfarm Participation : Evidence from Rwanda

(World Bank, Washington, DC, 2014-02) Ali, Daniel Ayalew ; Deininger, Klaus ; Duponchel, Marguerite

Although the potentially negative impacts of credit constraints on economic development have long been discussed conceptually, empirical evidence for Africa remains limited. This study uses a direct elicitation approach for a national sample of Rwandan rural households to assess empirically the extent and nature of credit rationing in the semi-formal sector and its impact using an endogenous sample separation between credit-constrained and unconstrained households. Being credit constrained reduces the likelihood of participating in off-farm self-employment activities by about 6.3 percent while making participation in low-return farm wage labor more likely. Even within agriculture, elimination of all types of credit constraints in the semi-formal sector could increase output by some 17 percent. Two suggestions for policy emerge from the findings. First, the estimates suggest that access to information (education, listening to the radio, and membership in a farm cooperative) has a major impact on reducing the incidence of credit constraints in the semi-formal credit sector. Expanding access to information in rural areas thus seems to be one of the most promising strategies to improve credit access in the short term. Second, making it easy to identify land owners and transfer land could also significantly reduce transaction costs associated with credit access.
Credit Constraints and Agricultural Productivity : Evidence from Rural Rwanda

(Taylor and Francis, 2014-02-20) Ali, Daniel Ayalew ; Deininger, Klaus ; Duponchel, Marguerite

While potentially negative impacts of credit constraints on economic development have long been discussed conceptually, empirical evidence for Africa remains limited. We use a direct elicitation approach on a national sample of Rwandan rural households to empirically assess the extent and nature of credit rationing in the semi-formal sector and its impact, using an endogenous switching model. Elimination of all constraints could increase output by some 17 per cent. Implications for policy and research are spelled out.
The Price of Empowerment : Experimental Evidence on Land Titling in Tanzania

(World Bank, Washington, DC, 2014-06) Ali, Daniel Ayalew ; Collin, Matthew ; Deininger, Klaus ; Dercon, Stefan ; Sandefur, Justin ; Zeitlin, Andrew

This paper reports on a randomized field experiment that uses price incentives to address economic and gender inequality in land tenure formalization. During the 1990s and 2000s, nearly two dozen African countries proposed de jure land reforms extending access to formal, freehold land tenure to millions of poor households. Many of these reforms stalled. Titled land remains the de facto preserve of wealthy households and, within households, men. Beginning in 2010, the study tested whether price instruments alone can generate greater inclusion by offering formal titles to residents of a low-income, unplanned settlement in Dar es Salaam at a range of subsidized prices, as well as additional price incentives to include women as owners or co-owners of household land. Estimated price elasticities of demand confirm that prices -- rather than other implementation failures or features of the titling regime -- are a key obstacle to broader inclusion in the land registry, and that some degree of pro-poor price discrimination is justified even from a narrow budgetary perspective. In terms of gender inequality, the study finds that even small price incentives for female co-titling achieve almost complete gender parity in land ownership with no reduction in demand.
Household Responses to Shocks in Rural Ethiopia: Livestock as a Buffer Stock

(World Bank, Washington, DC, 2015-04) Ali, Daniel Ayalew

This paper uses a stochastic dynamic programming model to characterize the optimal savings-consumption decisions and the role of livestock inventories as a buffer stock in rural Ethiopia. The results show that relatively land-rich households use accumulation and liquidation of cattle and other animal inventories for partial consumption smoothing, while low-income households appear not to do so. The results highlight the need for improvement in livestock markets, which are often affected by high transaction costs and price risk, and for investigation of other approaches to risk management.