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Reputation, Policy Risk,and Land Use: A Study of China’s ‘Grain for Green’ Programme


  • Haochi Zheng
  • Paul Glewwe
  • Stephen Polasky
  • Jintao Xu


Since 1999, China has spent RMB 50 billion (about US$7 billion) to implement the ‘Grain for Green’ programme, the largest land retirement programme in the developing world. From 1999 to 2003, over 7.2 million hectares of agricultural land were retired under the programme. However, many farmers report that they did not receive the compensation promised under the programme in exchange for planting trees on their agricultural land. This paper examines the impacts of subsidy payment shortfalls, delayed payments and programme uncertainty on farmers’ participation in the Grain for Green programme. A stylized reputation game is used to explain how village-level corruption (subsidy underpayment), along with uncertainty regarding the likely longevity of the programme, discourage farmers’ participation in the programme. Panel data are used to estimate the impact of previous payment shortfalls on subsequent …

Suggested Citation

  • Haochi Zheng & Paul Glewwe & Stephen Polasky & Jintao Xu, 2011. "Reputation, Policy Risk,and Land Use: A Study of China’s ‘Grain for Green’ Programme," WIDER Working Paper Series 039, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2011-39

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    References listed on IDEAS

    1. Emi Uchida & Jintao Xu & Scott Rozelle, 2005. "Grain for Green: Cost-Effectiveness and Sustainability of China’s Conservation Set-Aside Program," Land Economics, University of Wisconsin Press, vol. 81(2).
    2. Grosjean, Pauline & Kontoleon, Andreas, 2009. "How Sustainable are Sustainable Development Programs? The Case of the Sloping Land Conversion Program in China," World Development, Elsevier, vol. 37(1), pages 268-285, January.
    3. Deacon Robert T., 1995. "Assessing the Relationship between Government Policy and Deforestation," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 1-18, January.
    4. Barbier, Edward B. & Damania, Richard & Leonard, Daniel, 2005. "Corruption, trade and resource conversion," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 276-299, September.
    5. Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence from a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 679-705.
    6. Bulte, Erwin H. & Damania, Richard & Lopez, Ramon, 2007. "On the gains of committing to inefficiency: Corruption, deforestation and low land productivity in Latin America," Journal of Environmental Economics and Management, Elsevier, vol. 54(3), pages 277-295, November.
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    Cited by:

    1. Liu, Zhen & Lan, Jing, 2015. "The Sloping Land Conversion Program in China: Effect on the Livelihood Diversification of Rural Households," World Development, Elsevier, vol. 70(C), pages 147-161.

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    reputation; grain for green programme; land use;


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