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Governing Farmland Conversion for Urban Development from the Perspective of Transaction Cost Economics

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  • Rong Tan
  • Volker Beckmann
  • Futian Qu
  • Cifang Wu

Abstract

This paper considers farmland conversion for the purpose of urban development as a series of transactions and discusses the determinants of appropriate governance structures for governing farmland conversion in terms of process efficiency. Towards this end, the paper develops a theoretical framework for analysing the process of farmland conversion based on transaction cost economics. The framework covers transactions, transaction attributes, governance structures and performance with the aim of minimising transaction costs. The paper also demonstrates the usability of the framework by creating a corresponding quantitative model for a case study in China. Furthermore, it identifies factors that influence the transaction costs associated with farmland conversion in China and explains why the related governance structures are chosen.

Suggested Citation

  • Rong Tan & Volker Beckmann & Futian Qu & Cifang Wu, 2012. "Governing Farmland Conversion for Urban Development from the Perspective of Transaction Cost Economics," Urban Studies, Urban Studies Journal Limited, vol. 49(10), pages 2265-2283, August.
    • Handle: RePEc:sae:urbstu:v:49:y:2012:i:10:p:2265-2283
    DOI: 10.1177/0042098011423564
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    References listed on IDEAS

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    3. Thomas R. Plaut, 1980. "Urban Expansion and the Loss of Farmland in the United States: Implications for the Future," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 537-542.
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    5. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
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    7. Trevor L. Brown & Matthew Potoski, 2003. "Managing contract performance: A transaction costs approach," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(2), pages 275-297.
    8. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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    Citations

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    Cited by:

    1. Chen Shi & Bo-sin Tang, 2020. "Institutional change and diversity in the transfer of land development rights in China: The case of Chengdu," Urban Studies, Urban Studies Journal Limited, vol. 57(3), pages 473-489, February.
    2. Xie, Xiangxiang & Zhang, Anlu & Wen, Lanjiao & Bin, Peng, 2019. "How horizontal integration affects transaction costs of rural collective construction land market? An empirical analysis in Nanhai District, Guangdong Province, China," Land Use Policy, Elsevier, vol. 82(C), pages 138-146.
    3. Oliver Dillmann & Volker Beckmann, 2018. "Do Administrative Incentives for the Containment of Cities Work? An Analysis of the Accelerated Procedure for Binding Land-Use Plans for Inner Urban Development in Germany," Sustainability, MDPI, vol. 10(12), pages 1-20, December.
    4. Sina Shahab & Leonhard K. Lades, 2020. "Sludge and Transaction Costs," Working Papers 202007, Geary Institute, University College Dublin.
    5. Meie Deng & Anlu Zhang & Congxi Cheng & Canwei Hu, 2022. "Are Villagers Willing to Enter the Rural Collective Construction Land Market under the Arrangement of Transaction Rules?—Evidence from Ezhou, China," Land, MDPI, vol. 11(4), pages 1-11, March.
    6. Lai, Yani & Tang, Bosin & Chen, Xiangsheng & Zheng, Xian, 2021. "Spatial determinants of land redevelopment in the urban renewal processes in Shenzhen, China," Land Use Policy, Elsevier, vol. 103(C).
    7. Tan, Rong & Xiong, Changsheng & Kimmich, Christian, 2023. "An agent-situation-based model for networked action situations: Cap-and-trade land policies in China," Land Use Policy, Elsevier, vol. 131(C).
    8. Zhun Chen & Yuefei Zhuo & Guan Li & Zhongguo Xu, 2021. "What Drives Different Governance Modes and Marketization Performance for Collective Commercial Construction Land in Rural China?," Land, MDPI, vol. 10(3), pages 1-23, March.
    9. Shahab, Sina & Clinch, J. Peter & O’Neill, Eoin, 2018. "Accounting for transaction costs in planning policy evaluation," Land Use Policy, Elsevier, vol. 70(C), pages 263-272.
    10. Shirzad, Hossein & Barati, Ali Akbar & Ehteshammajd, Shaghayegh & Goli, Imaneh & Siamian, Narges & Moghaddam, Saghi Movahhed & Pour, Mahdad & Tan, Rong & Janečková, Kristina & Sklenička, Petr & Azadi,, 2022. "Agricultural land tenure system in Iran: An overview," Land Use Policy, Elsevier, vol. 123(C).
    11. Hossein Azadi & Guy Robinson & Ali Akbar Barati & Imaneh Goli & Saghi Movahhed Moghaddam & Narges Siamian & Rando Värnik & Rong Tan & Kristina Janečková, 2023. "Smart Land Governance: Towards a Conceptual Framework," Land, MDPI, vol. 12(3), pages 1-20, March.

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