LOCAL GOVERNMENT BEHAVIOR AND PROPERTY RIGHTS FORMATION IN RURAL CHINA

We examine the ongoing transition from centrally planned to market agriculture in rural China. In particular, we examine the devolution of land rights from village governments to villagers and the corresponding evolution of tenure security in agricultural land. We find econometric support for the statistical and economic importance of four explanations for local government behavior. Three of these explanations indicate a link between the incentives and con-straints faced by village leaders and property rights in agricultural land, and hence suggest policy levers to encourage more secure property rights.