Choice of Land Tenure in China: The Case of a County with Quasi‐Private Property Rights

China's rural economic reforms radically altered land tenure in rural China. With the granting of land use rights and residual income rights to farming households between 1979 and 1983, agriculture shifted from a collective-based to a familybased system. Land was not privatized, however. Ownership remained "collective", with local officials, typically at the village level, exercising a major influence over the allocation of land and the way households could use land. The initial land allocations to families were typically based on household size, household labour supply, or both. The central government's policy was that these allocations were supposed to be for 15 years. In some villages, land use contracts have been respected; in other villages, however, local leaders have periodically redistributed land among households and have intervened throughout the reform period to determine how farmers are able to use the land. The initial reforms triggered an unprecedented acceleration of agricultural growth in China. From 1979 to 1984, the gross value of agricultural output increased in real terms at an annual rate of 7.6 per cent, and grain production rose by 4.9 per cent annually.' Empirical studies attribute a significant part of this increase to enhanced incentives, as farmers were able to keep the output and

Even though it is widely recognized that giving farmers more secure land rights may increase agricultural investment, scholars contend that, in the case of China, such a policy might undermine the function of land as a social safety net and, as a consequence, not be sustainable or command broad support. Data from three provinces, one of which had adopted a policy to increase security of tenure in advance of the others, suggest that greater tenure security, especially if combined with transferability of land, had a positive impact on agricultural investment and, within the time frame considered, led neither to an increase in inequality of land distribution nor a reduction in households' ability to cope with exogenous shocks. Household support for more secure property rights is increased by their access to other insurance mechanisms, suggesting some role of land as a safety net. At the same time, past exposure to this type of land right has a much larger impact quantitatively, suggesting that a large part of the resistance to changed property rights arrangements disappears as household familiarity with such rights increases.

The emergence and eventual prevalence of the household responsibility system, which replaces the production team system as the unit of production and income distribution, has brought about dramatic changes in China's rural areas since 1979. This institutional change has resulted in remarkable growth in agricultural productivity.' However, in the literature on collective farms, a theory that is capable of explaining the causes and effects of this change is yet to be developed. The formal theory about collective economies developed so far by Ward, Domar, Sen, Oi and Clayton, Bradley, Maurice and Ferguson, Cameron, Bonin, Chinn, Israelsen, Putterman, and others suggests that the allocation of resources in a collective farm is efficient at least in

D ISCUSSIONS of the efficiency of various systems of land tenure are marred by all sorts of imprecision in analysis. Economists have developed a clear notion of economic efficiency but discussions of land tenure invariably bring in some sociological and wealth-distribution constraints when discussing the efficiency aspects of tenure systems. Social anthropologists and others stress that certain tenure systems are integral parts of social systems involving such things as insurance for old and young, with the implication that even though these tenure systems might not facilitate (pecuniary) wealthmaximization, yet the non-pecuniary wealth facilitated provides "enough" compensation in some general welfare sense. I shall discard such sociological arguments because I believe that there is no reason why the sociological benefits of particular tenure systems cannot be obtained by some alternative arrangement while creating a tenure system that is designed to facilitate wealth maximization and wealth increases.

Homesteading and Property Rights; Or, "How the West Was Really Won"

PROTOCOL: The Impact of Land Property Rights Interventions on Agricultural Productivity in Developing Countries: A Systematic Review

The Evolution of Property Rights: A Study of the American West

When China's leaders launched rural reforms in the late 1970s, they acknowledged the nation's need to modify its commitment to egalitarianism.1 Slogans such as Tt is glorious to be rich!' and 'Some areas will lead; others will follow!' signalled this fundamental shift in ideology. Leaders backed up these exhortations with a series of concrete policy actions ? establishing the Special Economic Zones and implementing the East Coast-first policy, introducing financial reforms, and initiating the rural industrialization movement. In China's version of the 'trickle down' theory, certain core areas were to take the lead in the modernization process and provide models for other areas to later emulate. Adopting strategies that had been employed

The objective of this paper is to understand the effects of China’s migration on source communities and to discuss their policy implications. We draw from New Economics of Labor Migration (NELM) theory to understand how migration and migrant remittances can relax or tighten market constraints in China’s rural economy. Using simultaneous-equation econometric techniques and household survey data from China, we estimate net, sectorspecific effects of migration on rural household income, focusing on farm production and self-employment. Our econometric findings indicate that the loss of labor to migration has a negative effect on household cropping income in source areas. However, we provide evidence that remittances sent home by migrants positively compensate for this lost-labor effect, contributing to household incomes directly and indirectly by stimulating crop and possibly self-employment production. This finding offers evidence in support of the NELM hypothesis that remittances loosen constraints on production in the imperfect-market environments characterizing rural areas in less developed countries. Taking into account both the multiple effects of migration and the change in household size, participating in migration increases household per-capita income between 14 and 30 percent. Migration and Incomes in Source Communities: A New Economics of Migration Perspective from China China is experiencing the largest peacetime flow of labor out of agriculture ever witnessed in world history (Solinger, 1999; Rozelle et al., 1999). Despite the rapid expansion of labor migration, China’s work force is still disproportionately employed in agriculture compared to other countries at similar levels of per-capita GDP (Taylor and Martin, 2001). Hence, as China’s economy continues to expand, the flow of labor to urban areas will continue and even accelerate (Johnson, 1999). The massive flow of labor away from farms has intensified research interest in China’s migration in recent years. However, as in the broader literature on migration in less developed countries, most recent studies on China’s migration have focused on determining the size and composition of the labor flow, macroeconomic implications of increased migration, and the effects of migration on urban areas (Zhao, 1999; Yang, 1999; 1997). Less emphasis has been placed on researching the effects of migration on the rural communities that migrants leave, even though evidence shows that the rural household in the village of origin is typically the central concern of all those involved in migration– both those who leave and those who stay behind (exceptions include Wang and Zuo, 1999; Bai, 2001). Moreover, the recent increase in migration has left policy makers particularly concerned regarding the way source communities will be affected (MOA, 1999). They are concerned that as labor flows away from farms, food production and crop income will decline, potentially threatening China’s food security. Furthermore, policy makers are concerned about the increasing gap between urban and rural household incomes. If migration exacerbates this gap, some fear that as it grows rural residents eventually will flood cities ill-equipped to absorb them. Others fear that discontent over a rising urban-rural income gap could even spill over into political unrest (Yang, 1999). Because China’s markets and other modern economic institutions are still relatively undeveloped, migration may play a pivotal role in creating or overcoming constraints caused by the lack of well-functioning markets and/or institutions (Knight and Song, 1999; Benjamin and Brandt, 2000). The “new economics of labor migration” (NELM) literature analyzes migration as a household decision rather than as an individual decision (Stark, 1991). The NELM hypothesizes that rural households facing imperfect market environments decide

A Note on the Causal Factors of China's Famine in 1959–1961

The Ethnic Minority‐Majority Income Gap in Rural China during Transition

PRICE or rent control is but one of many forms of legislative action which interfere with private contracting in the market place. To delimit the scope of my analysis, I shall use the term "price control" to refer only to any set of regulations which satisfies the following three conditions. First, the control must fix the price (or income)' terms of private contracts; this categorically excludes any laws which regulate the distribution of income among the contracting parties on a share or percentage basis.2 Second, the control must involve no appropriation of proceeds to or from the government; taxation and subsidization are thus excluded. Finally, the fixing of price must not be associated with direct government sales, purchases, or manipulation of resources so as to maintain the regulated price;3 by this stipulation, price "support" is also excluded. Even on such terms, legal regulations to control price are still many and varied. To evaluate our understanding of the class of phenomena which we seek to explain it is essential that we discover implications refutable by facts. By this criterion the available body of economic theory pertaining to price control is deficient indeed: the massive literature on the subject offers few such implications.4 An alternative approach to analyzing the observable effects of price control is presented here.

The articles published in this issue of the Journal help advance the debate on market reform in former socialist states. In our comment, besides dealing with data analysis issues, we suggest several ways to improve the level of debate about substantive issues. These suggestions include more attention to politics, including path dependence, and more attention to middle-level generalizations from other developing market societies.

We were fortunate in having access to a survey of 800 adults in Nanjing that was conducted by the International Wool Secretariate in 1986. The survey was intended for market research (e.g., brand recognition), but questions were asked about the respondent's age, occupation, income, and education level. These questions, though not ideally worded, were sufficient for the undertaking of a returns-to-education study. We believe the data to be unique and, of course, the issue of interest is whether a member of the workforce in China faces investment decisions on education similar to those faced elsewhere. The influence of sex and marital status on the level of income achieved by an individual was also examined. The basic equation modeled personal income as a nonlinear function of schooling and experience, but multicollinearity problems were encountered. As a result, a production function approach was successfully adapted to the returns-toeducation model. The collinearity problem was overcome, and this approach allowed the ease of substitution of education for experience in income generation to be examined more formally. An additional problem of errors in variables arose from a failing in questionnaire design and was handled statistically.

So What If There Is Income Inequality? The Distributive Consequence of Nonfarm Employment in Rural China