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Soil and water conservation investments and rural development in China

  • Heerink, Nico
  • Bao, Xiaobin
  • Li, Rui
  • Lu, Kaiyu
  • Feng, Shuyi

This study uses a unique set of annual provincial data on soil and water conservation (SWC) investments during the period 1989-2005 to estimate the impact of such investments on the extent and severity of erosion, the growth rate of agricultural gross domestic product (GDP) and rural poverty reduction in China. We find that SWC investments made by local governments have a significant negative impact on the extent of erosion and (in recent years) the severity of erosion, whereas SWC investments made by farm households until recently had a significant negative effect on the severity of erosion. In its turn, the severity of erosion is found to have a significant negative impact on agricultural GDP. Estimation of the impact of the extent of erosion on agricultural GDP provides mixed results. Based on these results, we derive that one RMB invested in SWC by local governments increases agricultural GDP in 2002 with 0.84-1.25Â RMB. Finally, we find that agricultural GDP has a significant negative impact on the rural poverty rate. The resulting indirect effect of SWC investment on rural poverty reduction, however, is small compared to other types of public investment. We conclude that (local) government investments in SWC do not only serve environmental goals, but also make a non-negligible contribution to agricultural growth and rural poverty reduction.

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Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 20 (2009)
Issue (Month): 2 (June)
Pages: 288-302

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Handle: RePEc:eee:chieco:v:20:y:2009:i:2:p:288-302
Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

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  1. Wiig, Henrik & Aune, Jens B. & Glomsrod, Solveig & Iversen, Vegard, 2001. "Structural adjustment and soil degradation in Tanzania: A CGE model approach with endogenous soil productivity," Agricultural Economics, Blackwell, vol. 24(3), pages 263-287, March.
  2. Loren Brandt & Dwayne Benjamin, 2002. "Property Rights, Labour Markets, and Efficiency in a Transition Economy: The Case of Rural China," William Davidson Institute Working Papers Series 518, William Davidson Institute at the University of Michigan.
  3. Alfsen, Knut H. & De Franco, Mario A. & Glomsrod, Solveig & Johnsen, Torgeir, 1996. "The cost of soil erosion in Nicaragua," Ecological Economics, Elsevier, vol. 16(2), pages 129-145, February.
  4. Johannes Sauer & Klaus Frohberg & Henrich Hockmann, 2006. "Stochastic efficiency measurement: The curse of theoretical consistency," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 139-166, May.
  5. Alfsen, Knut H. & Bye, Torstein & Glomsr D, Solveig & Wiig, Henrik, 1997. "Soil degradation and economic development in Ghana," Environment and Development Economics, Cambridge University Press, vol. 2(02), pages 119-143, May.
  6. Wiig, Henrik & Aune, Jens B. & Glomsrod, Solveig, 2001. "Structural adjustment and soil degradation in Tanzania A CGE model approach with endogenous soil productivity," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(3), March.
  7. Bowlus, Audra J. & Sicular, Terry, 2003. "Moving toward markets? Labor allocation in rural China," Journal of Development Economics, Elsevier, vol. 71(2), pages 561-583, August.
  8. Zhang, Xiaobo & Tan, Kong-Yam, 2007. "Incremental Reform and Distortions in China’s Product and Factor Markets," MPRA Paper 6804, University Library of Munich, Germany.
  9. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2004. "Reforms, Investment, and Poverty in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 395-421, January.
  10. Michael R. Carter & Yang Yao, 2002. "Local versus Global Separability in Agricultural Household Models: The Factor Price Equalization Effect of Land Transfer Rights," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 702-715.
  11. Kuiper, Marijke H., 2005. "Village Modeling: A Chinese Recipe For Blending General Equilibrium And Household Modeling," Report Series 29133, Agricultural Economics Research Institute.
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  13. repec:eap:articl:v:26:y:1996:i:2:p:185-207 is not listed on IDEAS
  14. Lutz, Ernst & Pagiola, Stefano & Reiche, Carlos, 1994. "The Costs and Benefits of Soil Conservation: The Farmers' Viewpoint," World Bank Research Observer, World Bank Group, vol. 9(2), pages 273-95, July.
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