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Securing property rights in transition: lessons from implementation of China's rural land contracting law

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Deininger, Klaus
Jin, Songqing

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Abstract

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.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4447.

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Date of creation: 01 Dec 2007
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Handle: RePEc:wbk:wbrwps:4447

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Keywords: Common Property Resource Development; Municipal Housing and Land; Access to Finance; Political Economy; Land and Real Estate Development;

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  31. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, vol. 88(12), pages 2857-2871, December. [Downloadable!] (restricted)
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  36. Deininger, Klaus & Jin, Songqing, 2005. "The potential of land rental markets in the process of economic development: Evidence from China," Journal of Development Economics, Elsevier, vol. 78(1), pages 241-270, October. [Downloadable!] (restricted)
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  38. Sonin, Konstantin, 2003. "Why the rich may favor poor protection of property rights," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 715-731, December. [Downloadable!] (restricted)
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