Property Rights and Prosocial Behavior: Evidence from a Land Tenure Reform Implemented as Randomized Control-Trial

Abstract

I investigate how the first large-scale randomized-controlled trial of a land formalization reform in rural Western Africa affects villagers' cooperativeness and trust. With the reform, land plots traditionally characterized by collective property and informal possession are mapped, parcels boundaries demarcated, and land rights are formally attributed, making it possible to claim property in court and sell or use them as collateral. Six years after the reform implementation, I conduct lab-in-the-field experiments to collect data on cooperation and trust choices among villagers who experienced the formalization program and compare them with control villagers not selected for the reform implementation. Results show that the formalization of land rights significantly increases participants' contributions to the common account in a public goods game and trustors' transfers in a trust game. In a second study, I replicate the experiment in a different rural area sharing the same set of formal institutions and subject to the same tenure reform, but characterized by significantly lower levels of market integration and worse socio-economic conditions. In contrast with results of the first study, in this environment the reform produces no positive effects on participants' trust levels and determines a significant reduction of cooperation and trustworthiness.

Keywords: Culture, Lab-in-the-Field Experiment, Land Tenure, Public Goods, Trust Game

JEL Classification: D02, D04, K11