A regression discontinuity assessment of the differential impacts of China’s Natural Forest Protection Program across forestland property right regimes

This study examines the impact of China’s Natural Forest Protection Program (NFPP) on forest cover in four Chinese provinces. The NFPP represents one of the world’s largest-scale forest conservation/restoration programs in terms of its sheer budget size and geographical coverage. Understanding the heterogeneous impact of the policy on different landowners is important to evaluating its viability and success. This paper presents the first rigorous assessment of the program’s performance by comparing its impacts on forestland held by state-owned forest enterprises (SOFEs) and village collectives. We use the spatial regression discontinuity approach to better identify the impact caused by the program per se, rather than by other possible correlated confounding factors. Our results find that the NFPP has a moderately positive effect on forest cover on average over both types of forestland holders. Moreover, we find that the program has a greater positive effect on collective forests than on state forests, even though the program’s financial support for the former is not as strong as that for the latter. Our empirical findings provide unique insights that contribute to the highly controversial and ongoing debate on property right reform of China’s state-owned forests.