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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 W.
  • Jin, Songqing

Abstract

While recent studies point towards the importance of institutions, in particular secure property rights, as key determinants of economic growth, options to foster institutional change to make property rights more secure are not well understood. Data from 800 villages all over China on the effectiveness with which a law aiming to increase households' tenure security -at the expense of local leaders' powers to reallocate or expropriate land without adequate compensation- provides an opportunity to identify such factors. Using illegal land reallocations and low compensation payments for expropriated land to identify lack of effective institutional change, we find that the impact of property rights reform is contingent on the institutional constraints imposed on leaders' power by democratic institutions and a clear legal framework, households' knowledge of the law, and to some extent presence of land certificates.

Suggested Citation

  • Deininger, Klaus W. & Jin, Songqing, 2006. "Securing property rights in transition: Lessons from implementation of China's rural land contracting law," 2006 Annual meeting, July 23-26, Long Beach, CA 21465, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21465
    DOI: 10.22004/ag.econ.21465
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    Keywords

    Land Economics/Use;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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