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Relaxing Rural Constraints: a ‘Win-Win’ Policy for Poverty and Environment in China?

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Author Info

  • Ben Groom

    ()
    (Department of Economics, School of Oriental and African Studies, Thornhaugh St, Russell Square, London WC1H 0XG)

  • Pauline Grosjean
  • Andreas Kontoleon
  • Tim Swanson
  • Shiqiu Zhang

Abstract

The link between local institutional and market failures, rural poverty and environmental degradation suggests a win-win policy intervention: solve local ?constraints and achieve both poverty alleviation and environmental goals. However, designing such interventions is problematic since exposure to constraints is unobservable and responses can be heterogeneous. In this context we evaluate the ability of the world's largest land set-aside programme, the Sloping Lands Conversion Programme (SLCP) in China, to relax local constraints on off-farm labour markets and achieve these dual objectives. A farm household model in the presence of constraints is developed. This identi?es constrained and unconstrained households and predicts that the impact of the SLCP on off-farm labour supply will be larger for the former if constraints are relaxed. To test this, a novel empirical approach is employed which combines a switching regression with difference in differences. Applied to panel data, these features allow unobserved sample separation, into constrained and unconstrained households, and consistent estimation of the SLCP?s heterogeneous impact. Also identified is the impact on the probability of being constrained and the relative importance of constraints such as tenure security. We ?nd some mixed support for the win-win hypothesis in the case of the SLCP.

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Bibliographic Info

Paper provided by University of Cambridge, Department of Land Economics in its series Environmental Economy and Policy Research Working Papers with number 30.2008.

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Date of creation: 2008
Date of revision: 2008
Handle: RePEc:lnd:wpaper:200830

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Related research

Keywords: Off-farm labour supply; institutional and market failures; local separability; Sloping Lands Conversion Programme (SLCP); difference in differences; switching regression;

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Cited by:
  1. Sylvie Démurger & Haiyuan Wan, 2012. "Payments for ecological restoration and internal migration in China: the sloping land conversion program in Ningxia," IZA Journal of Migration, Springer, vol. 1(1), pages 1-22, December.
  2. Ian A. MacKenzie & Markus Ohndorf & Charles Palmer, 2010. "Enforcement-proof contracts with moral hazard in precaution: ensuring ‘permanence’ in carbon sequestration," LSE Research Online Documents on Economics 30846, London School of Economics and Political Science, LSE Library.
  3. Shiyi Chen & Wolfgang Karl Härdle, 2012. "Dynamic Activity Analysis Model Based Win-Win Development Forecasting Under the Environmental Regulation in China," SFB 649 Discussion Papers SFB649DP2012-002, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  4. Sylvie Démurger & Haiyuan Wan, 2012. "Payments for ecological restoration and rural labor migration in China: The Sloping Land Conversion Program in Ningxia," Post-Print halshs-00763147, HAL.
  5. Craig Leisher & Leah H. Samberg & Pieter Van Buekering & M. Sanjayan, 2013. "Focal Areas for Measuring the Human Well-Being Impacts of a Conservation Initiative," Sustainability, MDPI, Open Access Journal, vol. 5(3), pages 997-1010, March.

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