Hazards of Expropriation: Tenure Insecurity and Investment in Rural China
- (pp. 1420-1447)
AbstractWe use household data from northeast China to examine the link between investment and land tenure insecurity induced by China's system of village-level land reallocation. We quantify expropriation risk using a hazard analysis of individual plot tenures and incorporate the predicted "hazards of expropriation" into an empirical analysis of plot-level investment. Our focus is on organic fertilizer use, which has long-lasting benefits for soil quality. Although we find that higher expropriation risk significantly reduces application of organic fertilizer, a welfare analysis shows that guaranteeing land tenure in this part of China would yield only minimal efficiency gains.
CitationJacoby, Hanan, G., Guo Li, and Scott Rozelle. 2002. "Hazards of Expropriation: Tenure Insecurity and Investment in Rural China ." American Economic Review, 92 (5): 1420-1447. DOI: 10.1257/000282802762024575
- P26 Socialist Systems and Transitional Economies: Political Economy; Property Rights
- P32 Collectives; Communes; Agriculture
- Q15 Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment