23 Pages Posted: 2 Nov 2011 Last revised: 29 May 2012
Date Written: October 31, 2011
Chinese customs and law have traditionally prevented a land seller from conveying outright title to a buyer. The ancient custom of dian, which persisted until the 1949 Revolution, gave a land seller and his lineage an immutable option to buy back sold land at the original sale price. This little-analyzed custom discouraged soil conservation and land improvements, and, especially after 1600, contributed to China’s inability to keep pace with England.
After calamitous experiences with land collectivization between 1951 and 1981, China’s Communist government began to confer private land-use rights. But, instead of making outright sales, it chose to award contractual rights only for a fixed-term, for example, 50 years in the case of an industrial parcel. For the same reasons dian did, this policy threatens to impair China’s prospects of economic development.
Keywords: China, land tenure, dian, economic development
JEL Classification: K00, K11, N15, N55, Q15, Q24
Suggested Citation: Suggested Citation
Ellickson, Robert C., The Costs of Complex Land Titles: Two Examples from China (October 31, 2011). Yale Law & Economics Research Paper No. 441. Available at SSRN: https://ssrn.com/abstract=1953207
By Henry Smith
By Daniel Kelly