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Reallocating wealth? Insecure property rights and agricultural investment in rural China

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This paper evaluates the impact of village-level land reallocations in China on household economic outcomes. Since land was decollectivized in China in 1983, village leaders have implemented regular forced reallocations of land designed to enhance intravillage equity and attain other policy goals. I estimate the impact of insecure tenure using the past history of land shifts as an instrument for current tenure insecurity, and find that an increase in the probability of losing the current plot yields a decrease in agricultural inputs and production of around one standard deviation. Though the costs of insecure tenure are high, structural estimates of the varying cost of reallocation across different villages suggest the choice to reallocate does reflect an optimizing process on the part of village officials, who reallocate where the net benefit is larger. However, the observed pattern of reallocations would be optimal only given an objective function for the village leader that places an extremely high weight on equity, and even given this objective function, there is evidence that village leaders may be making some costly mistakes.

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  • Jessica Leight, 2013. "Reallocating wealth? Insecure property rights and agricultural investment in rural China," Department of Economics Working Papers 2013-08, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2013-08
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    2. Alain de Janvry & Kyle Emerick & Marco Gonzalez-Navarro & Elisabeth Sadoulet, 2015. "Delinking Land Rights from Land Use: Certification and Migration in Mexico," American Economic Review, American Economic Association, vol. 105(10), pages 3125-3149, October.
    3. Zhang, Chuanyong & Song, Yanjiao, 2022. "Road to the city: Impact of land expropriation on farmers’ urban settlement intention in China," Land Use Policy, Elsevier, vol. 123(C).
    4. Kacana Sipangule, 2017. "Agribusinesses, smallholder tenure security, and plot-level investments: Evidence from rural Tanzania," WIDER Working Paper Series wp-2017-106, World Institute for Development Economic Research (UNU-WIDER).
    5. Shengmin Sun & Qiang Chen, 2020. "Household responsibility system and China's agricultural: Growth revisited: Addressing endogenous institutional change," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 28(4), pages 537-558, October.
    6. Gao, Li & Zhang, Wendong & Mei, Yingdan & Sam, Abdoul G. & Song, Yu & Jin, Shuqin, 2018. "Do farmers adopt fewer conservation practices on rented land? Evidence from straw retention in China," Land Use Policy, Elsevier, vol. 79(C), pages 609-621.
    7. Xiaoyu Sun & Weijing Zhu & Aili Chen & Gangqiao Yang, 2022. "Land Certificated Program and Farmland “Stickiness” of Rural Labor: Based on the Perspective of Land Production Function," Land, MDPI, vol. 11(9), pages 1-24, September.
    8. Gao, Xuwen & Shi, Xinjie & Fang, Shile, 2021. "Property rights and misallocation: Evidence from land certification in China," World Development, Elsevier, vol. 147(C).
    9. Jing Li, 2019. "Land tenure and agricultural investments in China: a meta-regression analysis," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(2), pages 329-347, September.
    10. Li, Xingguang & Huo, Xuexi, 2021. "Impacts of land market policies on formal credit accessibility and agricultural net income: Evidence from China's apple growers," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    11. Xiang Deng & Min Zhang & Chunlin Wan, 2022. "The Impact of Rural Land Right on Farmers’ Income in Underdeveloped Areas: Evidence from Micro-Survey Data in Yunnan Province, China," Land, MDPI, vol. 11(10), pages 1-16, October.
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    13. 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.
    14. Wang, Qian & Qiu, Junjie & Yu, Jin, 2019. "Impact of farmland characteristics on grain costs and benefits in the North China Plain," Land Use Policy, Elsevier, vol. 80(C), pages 142-149.
    15. Zhao, Xiaoxue, 2020. "Land and labor allocation under communal tenure: Theory and evidence from China," Journal of Development Economics, Elsevier, vol. 147(C).
    16. Kacana Sipangule, 2017. "Agribusinesses, smallholder tenure security, and plot-level investments: Evidence from rural Tanzania," WIDER Working Paper Series 106, World Institute for Development Economic Research (UNU-WIDER).

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