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Incentive contract or tenure reform? Understanding the transition of forest resources management in China


  • Jiegen Wei
  • Haoran He


Purpose - – China’s government has been facing a trade-off in choosing between tenure reform and forest concessions to manage forest resources. The purpose of this paper is to investigate how the government’s policy choices can be affected by environmental benefits and the economic value of forests. Design/methodology/approach - – We build a simple theoretical model and employ province-level data. Findings - – The results show that the government will allocate less forestland to local people if environmental concerns are more important and privatize less forest if the economic benefits from forest are higher. Social implications - – Therefore, the transformation of forest management policies reflects not only the government’s own preferences but also its gradual adjustment to the changing market and institutional environment. Originality/value - – The present paper provides a regulation approach that complements the growing literature on forest resource management.

Suggested Citation

  • Jiegen Wei & Haoran He, 2016. "Incentive contract or tenure reform? Understanding the transition of forest resources management in China," China Agricultural Economic Review, Emerald Group Publishing, vol. 8(1), pages 112-128, February.
  • Handle: RePEc:eme:caerpp:v:8:y:2016:i:1:p:112-128

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    More about this item


    China; Environment; Forest resources; Incentive contract; Tenure reform; Q15; Q28; P21;

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform


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