Publication: Securing Property Rights in Transition: Lessons from Implementation of China's Rural Land Contracting Law
Abstract
Motivated by the emphasis on secure property rights as a determinant of economic development in recent literature, we use village- and household-level information from about 800 villages throughout China to explore whether legal reform increased protection of land rights against unauthorized reallocation or expropriation with below-average compensation by the state. In addition to providing nation-wide evidence on a sensitive topic, we find positive impacts, equivalent increasing land values by 30 percent, of reform even in the short term that originated in villages where democratic election of leaders ensured a minimum level of accountability, pointing towards complementarity between good governance and legal reform. Implications for situations where individuals and groups hold overlapping rights to land are explored.
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Publication Securing Property Rights in Transition : Lessons from Implementation of China's Rural Land Contracting Law(World Bank, Washington, DC, 2007-12)This paper is motivated by the emphasis on secure property rights as a determinant of economic development in recent literature. The authors use village and household level information from about 800 villages throughout China to explore whether legal reform increased protection of land rights against unauthorized reallocation or expropriation with below-average compensation by the state. The analysis provides nation-wide evidence on a sensitive topic. The authors find positive impacts, equivalent to increasing land values by 30 percent, of reform even in the short term. Reform originated in villages where democratic election of leaders ensured a minimum level of accountability, pointing toward complementarity between good governance and legal reform. The paper explores the implications for situations where individuals and groups hold overlapping rights to land.Publication Land Rental Markets in the Process of Rural Structural Transformation: Productivity and Equity Impacts from China(2009)Although the importance of land rental for overall economic development and development of the non-agricultural economy has long been recognized in theory, empirical evidence on factors that can promote or impede operation of such markets and their productivity and equity impacts, especially in rapidly developing economies with rather equal land endowments, remains limited. A large household level panel is used to illustrate the large contribution of land markets to occupational diversification, productivity of land use, and household welfare. Factors affecting land market participation are derived from a household model with transaction cost and individual ability. Results suggest that, by transferring land from less able and more affluent households who joined the non-farm sector to poorer ones with ample family labor, land markets are critical not only for non-agricultural growth but, by allowing more effective use of potentially idle land can contribute to significant productivity gains. Policy implications are derived.Publication Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam(2008)Impact and desirability of land transfers in post-socialist-transition economies have been subject of considerable debate. We use data from Vietnam to identify factors conducive to the development of land markets and to assess potentially differential impacts of rental and sales. Results show that both rental and sales transfer land to more productive producers but that rental is more important for the poor to access land that becomes available as the non-farm economy develops. The fact that secure land rights significantly increase supply of land to the rental market suggests that government has a key role in facilitating emergence and functioning of efficiency-enhancing land markets.Publication Impact of Property Rights Reform to Support China’s Rural-Urban Integration(World Bank, Washington, DC, 2015-08)As part of a national experiment, in 2008 Chengdu prefecture implemented ambitious property rights reforms, including complete registration of all land together with measures to ease transferability and eliminate labor market restrictions. This study uses a discontinuity design with spatial fixed effects to compare 529 villages just inside and outside the prefecture’s border. The results suggest that the reforms increased tenure security, aligned land use closer to economic incentives, mainly through market transfers, and led to an increase in enterprise start-ups. These impacts, most of which are more pronounced for villages with lower travel time to Chengdu city, point toward high potential gains from factor market reform.Publication Land Rental Markets in the Process of Rural Structural Transformation : Productivity and Equity Impacts in China(World Bank, Washington, DC, 2007-12)The importance of land rental for overall economic development has long been recognized in theory, yet empirical evidence on the productivity and equity impacts of such markets and the extent to which they realize their potential has been scant. Representative data from China's nine most important agricultural provinces illustrate the impact of rental markets on households' economic strategies and welfare, and the productivity of land use at the plot level. Although there are positive impacts in each of these dimensions, transaction costs constrain participation by many producers, thus preventing rental markets from attaining their full potential. The paper identifies factors that increase transaction costs and provides a rough estimate of the productivity and equity impacts of removing them.
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