Incomplete Property Rights, Exposure to Markets and the Provision of Environmental Services in China

Environment for Development, Discussion Paper

30 Pages Posted: 2 Sep 2009  

Michael T. Bennett

Peking University, College of Environmental Sciences

Aashish Mehta

University of California, Santa Barbara

Jintao Xu

Peking University

Date Written: April 25, 2008

Abstract

This paper uses data from a 2003 rural survey to examine the determinants of household provision of environmental services under China’s Sloping Land Conversion Program (SLCP), the largest payment for environmental services program in the developing world. The paper examines the determinants of plot-level survival rates of program-planted trees and grasses. It finds that household rights over retired land as well as autonomy in program decision-making (which we argue on the basis of supportive evidence are plausibly exogenous to post-retirement outcomes) have important and potentially countervailing impacts on the provision of environmental services targeted by the program. Households permitted to select what to plant obtain better program outcomes, but do not make the choices that the government would like them to, while those permitted to decide what land to retire perform worse. The analysis also finds that households more vested and experienced in agriculture and with less exposure to off-farm labor markets fare better in managing their planted trees. Significant learning-by-doing effects are also evident, suggesting that greater technical support to farmers could improve outcomes and lower program costs.

Keywords: Asia, China, agriculture, forestry, environmental services, property rights

JEL Classification: Q15, Q23, Q28

Suggested Citation

Bennett, Michael T. and Mehta, Aashish and Xu, Jintao, Incomplete Property Rights, Exposure to Markets and the Provision of Environmental Services in China (April 25, 2008). Environment for Development, Discussion Paper. Available at SSRN: https://ssrn.com/abstract=1467073 or http://dx.doi.org/10.2139/ssrn.1467073

Michael T. Bennett (Contact Author)

Peking University, College of Environmental Sciences

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Aashish Sunil Mehta

University of California, Santa Barbara ( email )

Santa Barbara, CA 93106
United States

HOME PAGE: http://www.global.ucsb.edu/people/aashish-mehta

Jintao Xu

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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