ABSTRACT
In situations of high risk, imperfect credit markets, and in which nonagricultural uses affect demand for land purchases, rural land sales markets may not always lead to productivity-enhancing outcomes ( Binswanger et al. 1995). Fear of such efficiency-reducing outcomes has led a number of countries (e.g., Ethiopia, South Africa, India, Mexico, and China) to impose restrictions on the operation of land sales or rental markets and is prompting researchers to caution against premature liberalization of land markets (Lastarria-Cornhiel 1997; Platteau 1996) or even to warn about outright negative consequences of doing so ( Manji 2003). Whereas rural markets in Africa suffer from many imperfections, available empirical evidence that would be required to justify interventions in this area suffers from two shortcomings.
