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Property Rights, Labour Markets, and Efficiency in a Transition Economy: The Case of Rural China

Loren Brandt () and Dwayne Benjamin ()

No 518, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: This paper investigates the consequences of imperfect and uneven factor market development for farm efficiency in rural China during transition. In particular, we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative (instead of market) allocation of land, and the extent of unevenly developed non-agricultural opportunities. Using a recently collected household survey, we show that a considerable amount of inefficiency exists in the countryside, especially in the employment of labour. Our results show that this inefficiency is alleviated by the development of external labour markets, and that in the context of the current imperfect market environment, administrative reallocations help improve on the margin both efficiency and equity. They do not go far enough, however, which raises important questions about constraints on rental activity, the link between admin istrative reallocation and decentralized land exchange, and property rights formation more generally.

Keywords: Rural institutions; property rights; labour markets; transition economies; farm efficiency (search for similar items in EconPapers)
JEL-codes: D23 J43 O12 Q15 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2002-03-01
New Economics Papers: this item is included in nep-agr, nep-dev, nep-eff, nep-geo and nep-tra
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http://deepblue.lib.umich.edu/bitstream/2027.42/39903/3/wp518.pdf

Related works:
Journal Article: Property rights, labour markets, and efficiency in a transition economy: the case of rural China (2002) Downloads
Journal Article: Property rights, labour markets, and efficiency in a transition economy: the case of rural China (2002) Downloads
Working Paper: Property Rights, Labor Markets, and Efficiency in a Transition Economy: The Case of Rural China (2000) Downloads
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