Land Titling and Rural Transition in Vietnam

ABSTRACTED FROM THE INTRODUCTION: This study investigates the impact of a specific legal change to land rights in Vietnam. Land rights are an important issue in Vietnam, where agriculture accounts for nearly a quarter of gross domestic product (GDP) and two-thirds of the workforce is engaged in agricultural activities. Agricultural land in Vietnam was decollectivized in 1988, and land-use rights were granted to households.We focus on the subsequent land law of 1993, which gave house- holds the right to inherit, transfer, exchange, lease, and mortgage their land-use rights. This was implemented by issuing land titles (or Land-Use Certificates as they are known in Vietnam) to all households. This law initiated an extensive land-titling program in Vietnam: by the year 2000, nearly 11 million land titles had been issued to rural households, making this one of the largest rural titling programs in the developing world, not only in scale but also in speed of implementation. To view this program in comparative perspective, 8.7 million land titles have been distributed in Thailand since the early 1980s and 1.87 million in Indonesia between 1996 and 2000 (SMERU Research Team 2002); the largest urban titling program, aimed at squatters in Peru, distributed 1.2 million titles (Field 2003). The economic consequences are thus of interest not only to Vietnam but also to other developing countries contemplating land-titling programs. Our study contributes to the literature on land titling in several distinctive ways. First, we study a large nationwide titling program rather than one restricted to certain areas or certain classes of people. This is in contrast to almost all the studies cited above. This means that our results include any potential general equilibrium effects of such titling programs. Second, our work focuses on the impact of granting new rights to land, including the rights to mortgage and trade, rather than a formalization of existing rights (as is the case in most programs aimed at squatters). Further, by looking at different outcomes, we are able to make inferences regarding which of these new rights was most effective. Third, our focus on the 1993 reform enables us to distinguish the effects of land titles from the incentive effects of de-collectivization. Our work is complementary with other studies of agrarian transition in Vietnam, such as Benjamin and Brandt (2004) and Ravallion and van de Walle (2003). However, the use of measures of land reform progress across provinces enables us to distinguish the incremental impact of the 1993 land law from the overall effect of economic growth during this period.

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