Hazards of Expropriation: Tenure Insecurity and Investment in Rural China

Posted: 31 Jan 2003

See all articles by Hanan G. Jacoby

Hanan G. Jacoby

World Bank - Agriculture and Rural Development Department; World Bank - Development Research Group (DECRG)

Guo Li

World Bank - Rural Development (EASRD)

Scott Rozelle

University of California, Davis - Department of Agricultural and Resource Economics

Abstract

We 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.

JEL Classification: P32, Q15

Suggested Citation

Jacoby, Hanan G. and Li, Guo and Rozelle, Scott, Hazards of Expropriation: Tenure Insecurity and Investment in Rural China. Available at SSRN: https://ssrn.com/abstract=375603

Hanan G. Jacoby (Contact Author)

World Bank - Agriculture and Rural Development Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/hjacoby

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Guo Li

World Bank - Rural Development (EASRD) ( email )

Washington, DC 20433
United States

Scott Rozelle

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-9897 (Phone)

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