Dual Landownership as Tax Shelter: How Did the Chinese Solve Ricardo's Problem?
AbstractA conventional theme of the literature on customary land tenure is that multiple ownership and complex tenure systems are obstacles to agricultural development. By studying the persistence of dual landownership in preindustrial China, I hypothesize that complex property norms could be the endogenous outcome of collective choice under institutional constraints, thus may not be inefficient per se. Dual ownership acted as a tax shelter for heavily taxed peasants who colluded with lightly taxed gentry to maximize the value of land. I show empirically that as gentry's tax privilege declined after the tax reform, peasants started to consolidate landownership.The dual owner system provided a solution to the land-use- inefficiency problem emphasized by David Ricardo: Under unequal taxation, land would end up owned by those with stronger political influence and preferential tax rates rather than by those best able to use it.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42689.
Date of creation: 16 Nov 2012
Date of revision:
Economic History; Dual Ownership; Tax Shelter; Tax Inequality; Double Cropping; Preindustrial China; Customary Tenure;
Find related papers by JEL classification:
- N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
- P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-12-06 (Accounting & Auditing)
- NEP-AGR-2012-12-06 (Agricultural Economics)
- NEP-ALL-2012-12-06 (All new papers)
- NEP-HIS-2012-12-06 (Business, Economic & Financial History)
- NEP-PBE-2012-12-06 (Public Economics)
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