Study On The Structure Change Of Farmland Property Rights And Institutional Performance In China Post-Reform: An Analysis From The Theoretical And Empirical Perspective

The remarkable achievements have been made by China's agriculture since 1978. The positive role of household responsibility system has been affirmed sufficiently by existed research which suggested that the establishment of household responsibility system should arouse farmer's enthusiasm for agricultural production by setting up farmers' dominant role in agricultural production and giving them certain contracting and operating rights to rural land. However, the effect of farmland property rights structure change upon institutional performance that is connoted in household responsibility system has been ignored. A fact can be observed that the structure of farmland property rights have changed with the deepening economic system reform in rural China, while the same system has been adopted pervasively in rural China since post-reform. Institutional performance would vary due to different behaviors domain determined by distinct incentive and constraint of farmland property rights structure. Therefore, the study on the effect of farmland property rights structure on institutional performance with deepening into farmland property rights structure and revealing its evolution law could not only further research property rights theory, but also propose scientific policy implications for improving property institutions of rural land.This study consisted of three parts. Firstly, the theoretical framework that is "property rights structure—institutional performance" was constructed to construe centrally the impact of the completeness and integrity of property rights, exclusive and residual of property rights on the institutional performance. Secondly, the above framework was utilized to reveal farmland property rights structure reasons and common ground of institutional performance from macro and micro levels respectively. Finally, there were research conclusions and policy implications. The full-text was divided into nine chapters as follows:Chapter 1:Introduction. At the beginning of the chapter, the background and significance of this research topic was introduced. On the basis of the above canvass, the research purpose, research contents, research methods, data resources and possible innovations & defects were introduced.Chapter 2:Literature review. Three areas of existed research were recommended briefly, which are institutional effects of farmland property rights, change and reform orientation of farmland property rights.Chapter 3:A theoretical analysis of property rights structure and institutional performance. Firstly, the basic concepts such as institution, institution change, institution incompleteness, property rights and property rights structure were reviewed theoretically and the logic relationships among institution, property rights and transaction cost, institution incompleteness, incomplete property rights and institutional performance were discussed. Secondly, the effect of the completeness and integrity of property rights, the exclusive and residual property rights on institutional performance were explored to construct theoretical framework of the structure change of farmland property rights and agriculture economic growth in China.Chapter 4:The structure change of farmland property rights in China post-reform: historical retrospect. The tracks of the structure change of farmland property rights have been systematically described since 1978 through that historical retrospect. The rule of the structure change of farmland property rights in China were initially revealed by construing the tracks. The results showed that logical starting point of land property rights reform in rural China was efficiency first, which also was the datum point of structure change of farmland property rights in China. Farmland property rights structure change under contracting and operating rights owned by farmers have occurred, so that incentive and constraint effects of farmland property rights could be exerted on farmers to improve efficiency. Strengthening farmers' land property rights was the evolution direction of farmland property rights structure in China. The policy whether land use rights, land revenue rights or land trading rights was inclined to farmers to intensify their rights.Chapter 5:The structure change of farmland property rights and its institutional performance in China:verification from national data(1)——An analysis from the completeness and integrity of farmland property rights perspective. On the basis of exploring theoretically the impact of the structure change of the completeness and integrity of farmland property rights on agricultural performance, its application in China was resolved according to the historical facts between 1978 and 2008. The results referred to economic behaviors' different domain determined by distinct property rights which consist in the completeness and integrity of property rights would affect institutional performance. The production decision-making system is extremely complex due to the process of agricultural production was the one that natural reproduction and economic reproduction process were intertwined. Compared with other entities, farmers were closer to agricultural production. The farmers would be endowed with further more use rights, income rights and trading rights of their land to form long-term and stable expectations which could arouse their enthusiasm for long-term investments. A major reason for sustainable agriculture growth in China was that enhancing completeness and integrity of farmers' property rights have taken place since reform and opening policy.Chapter 6:The structure change of farmland property rights and its institutional performance in China:verification from national data(2)——An analysis from the farmland property residual rights perspective. The impact of the structure change of farmland property rights on agricultural growth in China would be analyzed from the perspective of farmland property residual rights based on macro-data and econometric model. Based on the exploration theoretically of the impact of the exclusive and residual rights on agricultural growth, the econometric model was constructed to measure the impact of farmland residual rights change on agricultural growth according to data during 1978-2008. The finding of our research indicated that compared with the first-round land contracting policy, the second-round policy endowed peasant with both residual claimants and residual control rights activate the peasant productive enthusiasm. An important policy implication was that reform of rural land property right institution in China would be pushed by clarifying the land property rights and endowing peasant with more residual claimants and residual control rights to realize long-term agricultural growth.Chapter 7:The structure change of farmland property rights and its institutional performance in China:a case study(1)——An analysis from the completeness and integrity of farmland property rights perspective. This chapter focused on the reasons for the success of Luyanghu land shares cooperative from the perspective of the completeness and integrity of farmland property rights. The differences of farmland property rights with varied impacts on economic behaviors between household responsibility system and land shares cooperative in Luyanghu were compared from the use rights, income rights and trading rights respectively, based on the mechanism that is the impact of property rights structure on institutional performance which has been reviewed briefly. The results suggested that farmers of Luyanghu village were entitled with more complete farmland property rights, while the characteristics of the integrity rights were restrictive use rights, insufficient income rights and comfortless trading rights. Compared with the household responsibility system of Luyanghu village, property rights of farmland shares cooperative were more complex with the characteristics of not only maintaining completeness but also improving integrity of farmland property rights so that there was fantastic economic performance. The enlightenment of innovation of farmland property rights structure of Luyanghu farmland shares cooperative was that farmland property rights structure would be perfected in the future innovation.Chapter 8:The structure change of farmland property rights and its institutional performance in China:a case study(2)——An analysis from the perspective of residual farmland property rights. This chapter focused on the reasons for the success of Luyanghu land shares cooperative from the residual farmland property rights. A case study of Luyanghu farmland shares cooperative was studied according to check the impact of entrepreneurial ability and governance structure on institutional performance combined with entrepreneurial ability which was a new introduced variable and residual right. The research proposed that business organizations were a complex nexus of contracts and entrepreneurial ability played a crucial role in enterprises' development. In the uncertain environment, entrepreneurs made creative and correct decision to integrate resources and achieve potential income opportunities which have been perceived by their own tacit knowledge existed in the regional economy. It is essential to give entrepreneurs the control rights in order to match with their ability so that entrepreneurial ability could be exerted sufficiently. It is necessary to establish rational governance structure due to the hypothesis of economic entity that is entrepreneurs have naturally a tendency to opportunism. The success of Luyanghu farmland shares cooperative not only determined by giving entrepreneurs the control rights matched with entrepreneurial ability but also by setting up rational governance structure which suppressed effectively the entrepreneurial opportunistic behavior.Chapter 9:The main research findings and policy implications. Conclusions and the policy implications of deepening institutional reform of farmland property rights were revealed. The results showed that farmland property rights structure have played a crucial role in institutional performance. More complete and integral farmland property rights as well as the residual claim rights and residual control rights would be given to economic entity to improve institutional performance that was whether the key to sustained Chinese agricultural growth or the reasons for success of Luyanghu farmland shares cooperative.A significant policy implication was proposed that the extent of incomplete farmland property rights bringing efficiency losses could be reduced through the improving farmland land property rights structure and clarifying land property rights given farmers more residual claims and control rights to achieve further growth in Chinese agriculture. This is the direction to deepen the reform of farmland property right institutions in China.