The paper “The profits of Power: Land rights and Agricultural Investment in Ghana”, put forward by Markus Goldstein (world bank) and Christopher Udry (Yale University), examines the effects of land rights on the investment and farm productivity in the Akwapim area in Ghana. It examines the relationship between social relations, political structures, institution and economic activity in order to understand the economic behaviour in Ghana.

The amount invested by a farmer on a plot and his productivity is directly linked to two factors:

1. The security of tenure
2. The position of the farmer in the political hierarchy with respect to the plot.

The most important investment made on the plot is the time for which it is left for Fallowing. Fallowing is a farming technique in which the land is left ideal for some time in order for the soil fertility to rejuvenate itself.

Ghana is an economy with 68% dependence on the agricultural sector. This implies that more than half of its population relies on agricultural activities for their income and livelihood. In Africa, in general, agricultural activity is organised individually, i.e., people tend to the farm individually than as a family, and so they have more control over the income that is generated from the farmlands. In western Africa most of the agricultural land is farmed under shifting cultivation, which results in shorter duration of fallowing periods. Studies have shown that there is a very strong gender differential that husbands and wives will achieve very different amounts of profits, with generally the husband having higher amount of profits than the wife. This is largely due to the duration for which the land has been left for fallowing. Fallowing and opportunity cost of capital for an individual determine agricultural productivity. It is during the Fallowing period that one’s right to the plot can be lost. There is a very strong link between the tenure security, the way the land was acquired (In Ghana, land can be acquired through two methods either by working under a stool(landowner) or hereditary land.), investment decisions, agricultural productivity and the income of the household. This area of study is particularly interesting in order to understand the economic behaviour of the people in Ghana, as well as, understanding how politics affects production and investment pattern, and why do people in Ghana not believe in working jointly and rather have individual entities or farmlands.

In Africa, the gender difference in welfare due to the differences in the productivity is a major concern which needs to be addressed. A study such as this will provide an economic policy maker of how the economy functions by understanding the connection between political system and people’s ability to make investments, and where is it that the changes need to be made and how to address these changes.

Some of the major studies that have been address this subject are “Productivity effects of Indigenous Land Tenure System in Sub-Saharan Africa” in 1993 by Frank Place and Peter Hazell, which used the household survey data to determine whether the land tenure systems is a major hindrance to agricultural productivity, “Property rights and Investment incentives: Theory and evidence from Ghana” in 1995 by Timothy Besley, which also examines the link between Tenure security and agricultural productivity.