Property Rights, Village Political System, and Forestry Investment: Evidence from China’s Collective Forest Tenure Reform

To investigate the effect of improved property rights and, in particular, village democracy under China’s Collective Forest Tenure Reform (Tenure Reform) on household forestry investments, we estimate both tobit models and the more general Cragg models for farmers’ labor and monetary inputs into forestry, using survey data of 652 households from the southern collective forest region of China. The results reveal that the improved forestland use and disposition rights had a significant effect on household investments in forestry, while the beneficiary right did not. In addition, the results suggest that village democracy had a positive effect on households’ forestry investments. More importantly, we find that village democracy was able to significantly strengthen the investment incentive effect of the improved property rights under the Tenure Reform. These effects may be explained by the fact that village democracy improved households’ perception, cognition, and, subsequently, confidence toward, in particular, the use and disposition rights of the forests entitled to them. Therefore, the findings suggest that to increase the investment incentives of the Tenure Reform further, governments could strengthen the bundle of households’ use and disposition rights, as well as their related policies. Also, our findings indicate that governments could significantly improve the performance of public policies by effectively employing democratic procedures in the process of policy implementation.

Stabilizing Forests and Communities: Accommodative Buffering within China's Collective Forest Tenure Reform

China's recent collective forest tenure reform is intended to clarify and certify forest rights, and thereby promote market circulation of forestland, encourage forestry production and safeguard conservation. Central policy statements prioritize parcelling tenure among households to promote efficient management. This study examines how participants experienced the programme in communities in north-west Yunnan. In the study area, rather than individualizing tenure, forestry agencies compelled communities to re-collectivize forests. Nonetheless, residents persist in using household forests despite restrictions. Local officials tacitly sanction these activities. In mountain hinterlands, forest tenure reform has been focused on “stabilizing” forests and communities. Rather than forcibly impose tenure designs, authorities perform what we call accommodative buffering. A set of formal institutions, rules and mappings enables projects like forest ecological compensation payments to go forward. However, state agents at local and higher levels tolerate informal practices that contain the trouble that poorly fitted formal institutions might cause. While potentially more resilient than by-the-book enforcement, these arrangements could leave residents vulnerable to political shifts that require a demonstration of policy adherence.