Does Property Rights Integrity Improve Tenure Security? Evidence from China’s Forest Reform

Yuepeng Zhou,Xianlei Ma,Nico Heerink,Xiaoping Shi,Hongbin Liu,Dengyan Ji

doi:10.3390/su10061956

Abstract

The purpose of this paper is to examine the impact of land property rights integrity, subdivided into use rights, mortgage rights, and transfer rights, on household perceptions of long-term tenure security in China. To this end, we establish a theoretical framework that links China’s collective forest tenure reforms undertaken since 2003 to property rights integrity and two sources of tenure (in)security based on property rights theory: forestland reallocation and expropriation. Probit models are applied in the empirical analysis to household data collected in Jiangxi province in 2011 and 2013. The results indicate that household perceptions of tenure insecurity resulting from forestland reallocation expectations are affected by transfer rights, whereas household perceptions of insecurity resulting from forestland expropriation expectations are not affected by forestland rights. We thus suggest that it is crucial for policymakers to identify the sources of local property rights insecurity before they take steps to strengthen land tenure security. This paper contributes to the available literature on the relationship between property rights integrity and tenure security by identifying different sources of tenure insecurity, emphasizing the effect of property rights integrity on long-term tenure security, and taking into account the potential endogeneity problem.

Highlights

Forests have increasingly been recognized as a critical element in economic development and ecological balances [1]
None of the three property right types is found to have a significant impact on expectations with respect to forestland expropriation
This paper assesses the impacts of households’ awareness of their bundles of forestland rights on their tenure security perceptions in China by distinguishing two sources of tenure insecurity: village-level land reallocations based on social security considerations, and state-level land expropriation for the public interest

Summary

Introduction

Forests have increasingly been recognized as a critical element in economic development and ecological balances [1]. A number of studies have provided empirical evidence that forest tenure security stimulates household incentives to invest in forestland [5,6,7,8,9], transfers of forestland to more efficient uses through land markets [10,11], and rural household incomes [12,13,14]. Despite the importance of forest tenure security for both economic development and the environment, forest tenure is often insecure and/or ill-defined. This applies to China [17], and to many of the world’s most biodiverse and forested regions [16]. Ill-defined property rights, forestland reallocations, and forestland expropriations have become major causes of tenure insecurity in China. One of its main purposes is to clarify the bundle of property rights to forestland contracted by rural households

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