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Induced Institutional Change or Transaction Costs? The Economic Logic of Land Reallocations in Chinese Agriculture

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  • James Kai-Sing Kung
  • Ying Bai

Abstract

The communal land rights system in China, which combines individualised farming with periodic land reallocations, provides a good case for testing the economic logic of land reallocations. Analysis of the results of a unique village survey reveals that a village's choice of land reallocation type – partial or large in scale – is significantly affected by transaction cost considerations, which vary according to village topography and size, rather than concerns for economic efficiency (tenure security), the latter of which is a proxy for the theory of induced institutional change. More specifically, villages with complex topographies tend to favour partial land reallocation, whereas larger settlements tend to reallocate land more thoroughly.

Suggested Citation

  • James Kai-Sing Kung & Ying Bai, 2011. "Induced Institutional Change or Transaction Costs? The Economic Logic of Land Reallocations in Chinese Agriculture," Journal of Development Studies, Taylor & Francis Journals, vol. 47(10), pages 1510-1528.
    • Handle: RePEc:taf:jdevst:v:47:y:2011:i:10:p:1510-1528
    DOI: 10.1080/00220388.2010.506916
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    Cited by:

    1. Li, Shi & Vendryes, Thomas, 2018. "Real estate activity, democracy and land rights in rural China," China Economic Review, Elsevier, vol. 52(C), pages 54-79.
    2. Ma, Meilin, 2017. "Earthbound Labor and Incomplete Exit from Farming in China: Multiple Distortions and Nonseparable Decisions," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258414, Agricultural and Applied Economics Association.
    3. Che, Yi, 2009. "Mismatch: land reallocations, recovery land rental and land rental market development in rural China," MPRA Paper 39794, University Library of Munich, Germany.
    4. Yiwen, Zhang & Kant, Shashi, 2022. "Secure tenure or equal access? Farmers’ preferences for reallocating the property rights of collective farmland and forestland in Southeast China," Land Use Policy, Elsevier, vol. 112(C).
    5. Ali, Daniel Ayalew & Deininger, Klaus & Monchuk, Daniel, 2020. "Using satellite imagery to assess impacts of soil and water conservation measures: Evidence from Ethiopia’s Tana-Beles watershed," Ecological Economics, Elsevier, vol. 169(C).
    6. Shimokawa, Satoru, 2015. "Is prohibiting land reallocation enough to promote development of farmland rental markets in China?," IDE Discussion Papers 543, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    7. Steven Nafziger, 2016. "Communal property rights and land redistributions in Late Tsarist Russia," Economic History Review, Economic History Society, vol. 69(3), pages 773-800, August.
    8. Wang, Xiaobing & Yamauchi, Futoshi & Huang, Jikun & Rozelle, Scott, 2020. "What constrains mechanization in Chinese agriculture? Role of farm size and fragmentation," China Economic Review, Elsevier, vol. 62(C).
    9. Khantachavana, Sivalai V. & Turvey, Calum G. & Kong, Rong & Xia, Xianli, 2013. "On the transaction values of land use rights in rural China," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 863-878.
    10. Ying Bai & James Kung & Yang Zhao, 2014. "How Much Expropriation Hazard Is Too Much? The Effect of Land Reallocation on Organic Fertilizer Usage in Rural China," Land Economics, University of Wisconsin Press, vol. 90(3), pages 434-457.
    11. Kung, James Kai-sing & Shimokawa, Satoru, 2012. "Land Reallocations, Passive Land Rental, and the Development of Rental Markets in Rural China," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125099, International Association of Agricultural Economists.
    12. Wang, Yahui & Li, Xiubin & Li, Wei & Tan, Minghong, 2018. "Land titling program and farmland rental market participation in China: Evidence from pilot provinces," Land Use Policy, Elsevier, vol. 74(C), pages 281-290.
    13. Zhou, Nan & Cheng, Wenli & Zhang, Longyao, 2022. "Land rights and investment incentives: Evidence from China’s Latest Rural Land Titling Program," Land Use Policy, Elsevier, vol. 117(C).
    14. Ting Ye & Wenjian He & Zhiyong Liu, 2022. "Exploring the Influence of Land Titling on Farmland Transfer-Out Based on Land Parcel Data," Sustainability, MDPI, vol. 14(5), pages 1-18, February.
    15. Wenli Cheng & Nan Zhou & Longyao Zhang, 2021. "How does land titling affect credit demand, supply, access, and rationing: Evidence from China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(3), pages 383-414, September.
    16. Haifei Wang & Hongjun Wu & Peter Humphreys, 2022. "Chinese Merchant Group Culture, Corporate Social Responsibility, and Cost of Debt: Evidence from Private Listed Firms in China," Sustainability, MDPI, vol. 14(5), pages 1-18, February.
    17. Zhao, Xiaoxue, 2020. "Land and labor allocation under communal tenure: Theory and evidence from China," Journal of Development Economics, Elsevier, vol. 147(C).
    18. Ren, Guangcheng & Zhu, Xueqin & Heerink, Nico & Feng, Shuyi, 2020. "Rural household migration in China – the roles of actual and perceived tenure security," China Economic Review, Elsevier, vol. 63(C).

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