Incomplete Property Rights, Exposure to Markets and the Provision of Environmental Services in China

This paper uses data from a 2003 rural survey to examine the determinants of household provision of environmental services under China’s Sloping Land Conversion Program (SLCP), the largest payment for environmental services program in the developing world.

The paper examines the determinants of plot-level survival rates of program-planted trees and grasses. It finds that household rights over retired land as well as autonomy in program decision-making (which we argue on the basis of supportive evidence are plausibly exogenous to postretirement outcomes) have important and potentially countervailing impacts on the provision of environmental services targeted by the program. Households permitted to select what to plant obtain better program outcomes, but do not make the choices that the government would like them to, while those permitted to decide what land to retire perform worse. The analysis also finds that households more vested and experienced in agriculture and with less exposure to off-farm labor markets fare better in managing their planted trees. Significant learning-by-doing effects are also evident, suggesting that greater technical support to farmers could improve outcomes and lower program costs.

EfD Authors

Dr. Michael T. Bennett Research Fellow
Professor Jintao Xu Coordinator and Research Fellow

Keywords

Agricultural productivity

Centers

china

Type of publication

Peer reviewed

Reference

Bennett, M., A. Mehta, and J. Xu. 2011. "Incomplete Property Rights, Exposure to Markets and the Provision of Ecosystem Services in China". China Economic Review, Volume 22, Issue 4 (2011), pp. 485-498.

Environment for Development

Environment for Development