Land Rental Markets as an Alternative to Government Reallocation? Equity and Efficiency Considerations in the Chinese Land Tenure System

39 Pages Posted: 20 Apr 2016  

Klaus Deininger

World Bank - Development Economics Group (DEC); World Bank - Development Research Group (DECRG)

Songqing Jin

Michigan State University; World Bank

Date Written: November 2002

Abstract

Deininger and Jin develop a model of land leasing with agents characterized by unobserved heterogeneity in ability and presence of an off-farm labor market. In this case, decentralized land rental may contribute to equity and efficiency goals and may have several advantages over administrative reallocation. The extent to which this is true empirically is explored using data from three of China's poorest provinces. The authors find that both processes redistribute land to those with lower endowments but that land rental markets are more effective in doing so and also have a larger productivity-enhancing effect than administrative reallocation, implying that more active land rental markets would allow producers to realize significant productivity gains. At the same time, the presence of a large number of producers whose participation in rental markets remains constrained suggests that efforts to reduce transaction costs in land rental markets would be warranted.

This paper - a product of Rural Development, Development Research Group - is part of a larger effort in the group to assess the impact of policy on land markets.

Suggested Citation

Deininger, Klaus and Jin, Songqing, Land Rental Markets as an Alternative to Government Reallocation? Equity and Efficiency Considerations in the Chinese Land Tenure System (November 2002). World Bank Policy Research Working Paper No. 2930. Available at SSRN: https://ssrn.com/abstract=636292

Klaus Deininger (Contact Author)

World Bank - Development Economics Group (DEC) ( email )

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

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

World Bank - Development Research Group (DECRG)

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

Songqing Jin

Michigan State University ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States

World Bank ( email )

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

Paper statistics

Downloads
165
Rank
149,600
Abstract Views
971