Abstract
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.
Highlights
Introduction and motivationThe way in which property rights to land are defined and documented, the rights and obligations they convey, and the extent to which they facilitate exchange of land through rental or sales markets, have far-reaching implications for the productivity of land use and for the social organization of communities and households' ability to cope with shocks
To explore whether the ability to cope with shocks differs across provinces, e.g. because the introduction of the two nos policy deprives households of access to land which they have traditionally used as a safety net, we interact the shock variable with regional dummies
The t-tests presented at the bottom of table 6 indicate that, while in all cases shocks had a expect households to subsidize agnculture through earmings from off-farm employment. 17Another reason for focusing on this age group is that educational progress beyond primary school, i.e. over 9 years, depends on intellectual ability more than on household characteristics
Summary
Ever since the collectivization of the late 1950s, the dual goals of increasing output while maintaining broad equality in access to resources have been at the core of policy initiatives by the Chinese government. Based on a description of the nature of the policy experiment conducted in Guizhou province, we identify the nature of the issue underlying the discussion, and outline the three main research questions. These questions relate to agricultural investment, equity and human capital investment, and households' land right preferences that motivate the subsequent analysis
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