how do payments for environmental services affect land tenure theory and evidence from china we gratefully acknowledge the financial support from renmin university for the research on land market development in the forest tenure reform project no 11xnc002 the british academy reference sg121920 the cambridge humanities research grants scheme and the economy and environment program for southeast asia reference pco13 0308 009

valuing inputs under supply uncertainty the bayesian shapley value we consider the problem of valuing inputs in a production environment in which input supply is uncertain inputs can be workers in a firm risk factors for a disease securities in a financial market or nodes in a networked economy each input takes its values from a finite set and uncertainty is modeled as a probability distribution over this set first we provide an axiomatic solution to our valuation problem defining three intuitive axioms which we use to uniquely characterize a valuation scheme that we call the a priori shapley value second we solve the problem of valuing inputs a posteriori that is after observing output this leads to the bayesian shapley value third we consider the problem of rationalizing uncertainty when the inputs are rational workers supplying labor in a non cooperative production game in which payoffs are given by the shapley wage function we find that probability distributions over labor supply that can be supported as mixed strategy nash equilibria always exist we also provide an intuitive condition under which we prove the existence of a pure strategy nash equilibrium we present several applications of our theory to real life situations

information advantage in cournot oligopoly abstract consider an oligopolistic industry where firms have access to the same technology but are asymmetrically informed about the environment even though it is commonplace to think that in this context superior information leads to higher profits we find that under cournot competition this is not generally the case it holds when firms technology exhibits constant returns to scale but it does not necessarily hold otherwise journal of economic literature classification numbers c72 d43 l13

existence and fairness of value allocation without convex preferences abstract shafer econometrica 48 1980 467 476 proved that in a finite exchange economy value allocations exist provided that each agent has convex complete transitive compact and monotone preferences however if preferences are not convex then value allocations may not exist to remedy this difficulty we enlarge the set of value allocations by introducing the concept of approximate value allocations and show that in a finite exchange economy approximate value allocations exist even if preferences are not convex or compact or monotone this value existence result can be used to provide a very general value existence theorem for a sequence of finite economies further we show that value allocations may discriminate in favor of or against a coalition of agents

tenure land rights and farmer investment incentives in china the goal of this paper is to understand the nature of the property rights associated with china s land tenure systems and to study the impact of these property rights on agricultural production efficiency the results show that land tenure and associated property rights in rural china affect the production behavior of farmers the most robust finding is that the right to use land for long periods of time encourages the use of land saving investments while the results show that land tenure affects agricultural production decisions the difference between collective and private plots however is small compared to the private plotcommunal productivity gap that existed in the pre reform period 1998 elsevier science b v all rights reserved

financial intermediary coalitions abstract in this article an environment in which the investment opportunities of agents are private information is studied and it is shown that financial intermediaries arise endogenously within that environment it is established that financial intermediaries are part of an efficient arrangement in the sense that they are needed to support the authors private information core allocations these intermediaries which are coalitions of agents exhibit the following characteristics in equilibrium they borrow from and lend to large groups of agents they produce information about investment projects and they issue claims that have different state contingent payoffs than claims issued by ultimate borrowers

aid and growth in small island developing states aid flows to small island developing states sids are enormous by international standards when compared to the size of their economies yet these countries face many severe economic challenges and many have experienced declines in the living standards of their citizens this paper looks at the impact of aid on what is treated as a necessary precondition for improvements in living standards typically defined specifically it examines the impact of foreign aid on real per capita income growth in sids by econometrically analysing cross country data for the period 1980 to 2004 a variety of econometric techniques and measures of aid are used results suggest that foreign aid is effective at spurring economic growth but with diminishing returns

post reform forestland markets in china land markets developed rapidly in china after agricultural land tenure reforms but not after forest reforms we surveyed farmers in three provinces to examine the post reform forestland markets and options to strengthen them using household choice experiments we estimate land market demand and supply under alternative contractual arrangements our findings are consistent with the currently thin markets but also suggest that alternative institutional and contractual conditions could support broader participation in land markets strengthening property rights on forestland emerges as an especially effective possible policy instrument we illustrate its predicted effects on equilibrium rental rates and market participation

how does land fragmentation affect off farm labor supply panel data evidence from china abstract this article provides a deeper theoretical understanding of the linkages between land fragmentation and off farm labor supply in china andinvestigates this relationship empirically in a more direct way than does the existing literature drawing upon a rural household panel data setcollected in zhejiang hubei and yunnan provinces from 1995 to 2002 we estimate the effects in two steps first we estimate the effect of landfragmentation on labor productivity second we estimate the effect of land fragmentation on off farm labor supply the production function resultsshow that land fragmentation indeed leads to lower agricultural labor productivity implying that land consolidation will make on farm work moreattractive and thus decrease off farm labor supply however the effect of land consolidation on off farm labor supply is not signi cant one likelyexplanation for this result may be the potentially imperfect labor markets jel classi cations j22 q15 q24 r23 keywords

foreign aid and fiscal governance in melanesia summary recent research suggests that foreign aid is effective at spurring economic growth in recipient countries but its effectiveness is likely to depend upon a number of factors arguably the most important factor determining aid effectiveness is how recipient governments mediate foreign aid inflows this paper investigates this issue for the melanesian countries of fiji papua new guinea the solomon islands and vanuatu for the period 1989 2002 results suggest that foreign aid has led to increases in developmental expenditures and to falls in tax revenues and borrowing results also suggest a very different response to aid grants versus loans

land tenure arrangements and rural urban migration in china summary obstacles to internal migration in china contribute to inefficiency inequality and land degradation academic and policy debate has primarily focused on discrimination against rural migrants on arrival in urban areas meanwhile barriers to migration out of rural areas have received less attention this paper examines the role of incomplete rural property rights in the migration decisions of rural households we examine the relationship between tenure insecurity and restrictions on land rentals and participation in outside labor markets the results indicate that tenure insecurity reduces migration this relationship is particularly pronounced on forest land which has implications for the conservation of recently replanted forest areas

aid policy and growth in post conflict societies countries emerging from civil war attract both aid and policy advice this paper provides the first systematic empirical analysis of aid and policy reform in the post conflict growth process it is based on a comprehensive data set of large civil wars and covers 27 countries that were in their first decade of post conflict economic recovery during the 1990s the authors first investigate whether the absorptive capacity for aid is systematically different in post conflict countries they find that during the first three post conflict years absorptive capacity is no greater than normal but that in the rest of the first decade it is approximately double its normal level so ideally aid should phase in during the decade historically aid has not on average been higher in post conflict societies and it has tended to taper out over the course of the decade the authors then investigate whether the contribution of policy to growth is systematically different in post conflict countries and in particular whether particular components of policy are differentially important for this they use the world bank policy rating database the authors find that growth is more sensitive to policy in post conflict societies comparing the efficacy of different policies they find that social policies are differentially important relative to macroeconomic policies however historically this does not appear to have been how policy reform has been prioritized in post conflict societies

non symmetric cardinal value allocations it is shown that cardinal value allocations may fail to be symmetric specifically agents with identical preferences and identical endowments can be treated very differently at a cardinal value allocation this casts further doubt on the interpretation of the weights as endogenous utility comparisons

moving off the farm and intensifying agricultural production in shandong a case study of rural labor market linkages in china this study examines linkages between off farm labor markets and the labor allocated by farmers to on farm production of fruit crops using a stratified random sample of rural households in shandong province we find that young and educated members of the labor force tend to work more frequently in the off farm labor market and that off farm employment reduces the likelihood and intensity of fruit production fruit production is associated with lower levels of off farm employment households and individuals who are less likely or able to find off farm employment can benefit from shifting into fruit production although off farm employment is an important avenue out of poverty fruit production provides ways for the less educated and older households to raise their income

on the empirics of foreign aid and growth the present paper re examines the effectiveness of foreign aid theoretically and empirically using a standard olg model we show that aid inflows will in general affect long run productivity the size and direction of the impact may depend on policies deep structural characteristics and the size of the inflow the empirical analysis investigates these possibilities overall we find that aid has been effective in spurring growth but the magnitude of the effect depends on climate related circumstances finally we argue that the collier dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate the usefulness of foreign aid in promoting growth in developing countries has been an area of controversy ever since rosenstein rodan in 1943 advocated for aid to eastern and south eastern europe browsing through successive editions of a leading textbook in development economics provides a telling illustration of how the confidence in aid effectiveness dwindled over the years in the first edition of leading issues in economic development meier 1964 dedicated a full 18 page section to the issue of foreign aid he started out asking how much aid by the time of the sixth edition meier 1995 the treatment of foreign aid had been cut into half and the questions in focus were why official assistance and does aid work in the 2000 edition meier and rauch 2000 foreign aid is not even listed in the index

handle with care fragile states and the determinants of fragility the international community has grave concerns over the capacity of so called fragile states to effectively deliver basic services to their people due to their weak policy and institutional environments this article examines the drivers of state fragility the world bank and oecd definitions of fragility are adopted using the world bank s country policy and institutional assessment cpia scores analysis is conducted on both binary measures of fragility and the actual cpia scores using an array of estimation techniques findings indicate that democracy income levels economic growth levels of education country size and natural resource rents are important determinants of fragility unlike other studies findings also suggest that being a small island development state is a primary driver of fragility

bargaining foundations of shapley value1 a transferable utility economy in which each agent holds a resource which can be used in combination with the resources of other agents to generate value according to the characteristic function v is studied using a dynamic model of bargaining the main theorem establishes that the payoffs associated with efficient equilibria converge to the agents shapley values as the time between periods of the dynamic game goes to zero in addition it is demonstrated that an efficient equilibrium exists and is unique when an additivity condition is satisfied to demonstrate the sensitivity of the solution to the institutional detail we modify the model to allow for partnerships and show that the shapley value is no longer achieved

local versus global separability in agricultural household models the factor price equalization effect of land transfer rights commonly employed global tests for separability between production and consumption decisions are theoretically inappropriate when the market failures creating non separabilities differentially constrain some but not all households simulated maximum likelihood estimates using chinese panel data reject the restrictions implied by a global separability test in favor of regime specific or local separability tests the estimates also show that a global approach to separability obscures the significant effect that less encumbered land transfer rights would have on shadow factor price equalization across households and allocative efficiency the findings on transfer rights suggest a resolution to the debate in china on further property rights reform copyright 2002 oxford university press

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

testing the external effect of household behavior the case of the demand for children this paper tests the external effect of household childbearing behavior by drawing on microfertility data from china the test is executed by regressing one woman s fertility on the average fertility of neighboring women china s unique affirmative birth control policy provides us with quasi experimental fertility variation that facilities identification we present two identification methods 1 testing the external effect from the dominant han chinese on minority women by using the fertility fine as an instrumental variable and 2 identifying the external effect using an instrumental variable that is based on the difference in differences we find that fertility has a large external effect

the rapid rise of cross regional agricultural mechanization services in china although adam smith 1776 and alfred marshall 1920 emphasized the gains from specialization that arise from the division of labor their focus was on the manufacturing sector both saw farming as being on too small a scale and bereft of economies of scale with a market that was too small and local with too sharp a seasonality and too quick a succession of tasks to support either the development of a division of labor over the tasks of a cropping season or of mechanization smith and marshall s vision of farming and its implications for division of labor and mechanization was manifest again in the 1950s to the present in asia ruttan 2001 puts forward nearly the same ideas and terms as smith and marshall but for contemporary small rice farms in asia he emphasizes that the use of machines for the series of short tasks performed on tiny farms would imply costly investment in specialized machines that small farmers would be loath to make and even if these farmers mechanized ruttan posited that it would not induce a segmented and specialized farm labor market as again the critical mass of demand for each segment would not be present otsuka 2012 goes further along these lines to note that only on larger farms would the mechanization investment

dimensions and diversity of property rights in rural china dilemmas on the road to further reform abstract this paper contributes to the debate over land tenure in rural china by conceptualizing and measuring multiple dimensions of property rights in a way that elucidates the competing interests that are affected by the property rights regime utilizing a unique village level data set this paper argues that the regional and temporal variation in rural property rights signals a pattern in which decentralized institutional innovation occurs in response to the competing interests of the national state of local authorities and of present and possible future individual land users unlike the earlier debate concerning the household responsibility system the current property rights dilemma is intrinsically more complex because the potential conflicts of interest between individuals local collectives and the state are greater resolution of that debate will ultimately require careful exploration of the reality and substance of the tradeoffs and competing interests that make further reform of rural property rights so difficult

approximate equilibria with bounds independent of preferences authors prove the existence of approximate equilibria in exchange economies giving bounds on the excess demand in terms of the number of traders and norms of the endowments but independent of the preferences

three sides of harberger triangles prevailing economic wisdom is highly critical of injudicious tax policies or government regulations uncorrected externalities unchecked monopolistic practices and various other market failures when economists are challenged to quantify the economic costs of associated price distortions it is standard practice and has been since the 1960s to use a small number of assumptions and selected elasticities to estimate areas of the relevant harberger triangles this simple and straightforward exercise has numerous applications and the virtue of producing answers rather than conjectures harberger triangles come in many shapes and sizes figure 1 offers an illustration of such a triangle for the simple case of an excise tax point a of figure 1 at which the demand and supply schedules intersect denotes market equilibrium in the absence of the tax with quantity q1 transacted at price p1 introduction of an excise tax at rate t payable by firms selling the commodity shifts the supply schedule upward by t at the new market equilibrium firms sell q2 units of the commodity at a market price of p2 receiving after tax p3 a p2 0 t market equilibrium at point a in figure 1 has the feature that marginal consumption benefits equal marginal production costs the excise tax drives a wedge between marginal benefits and marginal costs at consumption level q2 consumers are willing to pay any amount up to p2 for additional units of the good and suppliers would readily provide additional units of the good for any price of p3 or greater but these additional transactions do not take place due to the effect of the tax wedge the loss associated

the household responsibility system reform in china a peasant s institutional choice since 1978 the chinese government has implemented a series of major reforms including diversification of the rural economy production specialization crop selection in accordance with regional comparative advantage expansion of free markets and a marked rise in state procurement prices these reforms have brought about dramatic changes in china s rural areas however the most important change was the emergence and eventual prevalence of the household responsibility system hrs which restores the individual household and replaces the production team system as the unit of production and accounting in rural areas after the chaos of the cultural revolution china s moderate leaders started to reconsider china s rural policies although the government admitted that solving the labor management problems within production teams was the key to improving productivity and recommended measures to relate rewards to performance more closely the hrs was considered the reverse of the socialist principle of collective farming and was prohibited editorial board of china agriculture yearbook 1980 p 58 the official position at that time maintained that the production team was to remain the basic unit of production and accounting nevertheless toward the end of 1978 first secretly and later with the blessing of local authorities a small number of production teams in anhui province which was frequently victimized by flood and drought began to experiment with contracting land other resources and output quotas to individual households

approximate equilibria in markets with indivisible commodities abstract this paper presents results on the existence of approximate equilibria in large but finite exchange economies in which all the traders have non convex consumption sets as such the paper gives a natural extension to the finite economy of mas colell s results on existence with indivisible commodities and a continuum of agents it also presents an approximate equilibrium theorem without any assumption of compactness or bounded non convexity of preferences

are there negative returns to aid the world bank report assessing aid assumes that an inflow of aid above a certain level starts to have negative effects in this analysis we empirically test this assumption we find evidence for negative returns to aid at high levels of aid inflows however the results are sensitive to both the countries included in the sample and model specification moreover the turning point above which aid starts to have a negative effect on growth seems to be much higher than assumed in the background calculations for assessing aid

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

aid growth nexus empirical evidence from fiji foreign aid to the island economies is a major source for foreign exchange and resource needs this paper presents an empirical analysis of the relationship between foreign aid and economic growth in the case of fiji a neoclassical production function is applied to estimate the aid growth nexus since the data employed are time series for the period 1968 to 1996 the autoregressive distributed lag approach to cointegration is utilized to estimate the models components of total aid such as grant aid loan aid technical cooperation bilateral and multilateral aid flows are also utilized to estimate a disaggregated short run and long run relationship between foreign aid and economic growth the results show that total aid flows and its various forms i e bilateral aid grant aid and technical cooperation grant aid has a significant impact on economic growth in fiji as for domestic resources only exports and private investments in two equations show positive contribution to growth

the household responsibility system reform and the adoption of hybrid rice in china abstract this paper studies the diffusion of hybrid rice before and after the recent institutional change from the collective team system to the household based farming system in rural china a simple model which treats the adoption of hybrid rice as a portfolio selection problem is presented the model is tested against time series cross county data collected from hunan province in south china the empirical evidence suggests that 1 adoption behavior in the collective system was not consistent with the predictions of the theoretical model this evidence indicates the existence of administrative intervention in influencing production decisions in the collective system 2 there was a significant change in the structure of the adoption function following the transition from the collective system to the household based system and 3 adoption behavior in the household system is consistent with the predictions of the theoretical model

conservation payments liquidity constraints and off farm labor impact of the grain for green program on rural households in china this study evaluates the labor response of rural households participating in the grain for green program in china the largest payments for ecosystem services program in the developing world using a panel data set that we designed and implemented we find that the participating households are increasingly shifting their labor endowment from on farm work to the off farm labor market however the effects vary depending on the initial level of human and physical capital the results support the view that one reason why the participants are more likely to find off farm employment is because the program is relaxing households liquidity constraints

values for cooperative games with incomplete information an eloquent example myerson s 1984 extension of the lambda transfer value to cooperative games with incomplete information focus among other things on the strength of the incentive constraints at the solution for determining the power of coalitions we construct an intuitive three player game where the player whose only contribution is to partly release the two other players from the incentive constraints they face when they cooperate receives a zero payoff according to myerson s solution on the contrary the random order arrival procedure attributes a strictly positive payoff to him our example is thus an analog of the banker game of owen 1972 that was designed for evaluating the lambda transfer value under complete information asymmetric information now takes up the role that was formerly attributed to the lack of transferability of utilities

forest tenure reform in china a choice experiment on farmers property rights preferences decentralization experiments are currently underway in the chinese forestry sector however researchers and policy makers tend to ignore a key question what do forest farmers really want from reform this paper addresses this question using a survey based choice experiment to investigate farmers preferences for various property rights attributes of a forestland contract we found that farmers are highly concerned with the types of rights provided by a contract reducing perceived risks of contract termination and introducing a priority right for the renewal of an existing contract significantly increases farmers marginal willingness to pay for a forest contract

property rights labour markets and efficiency in a transition economy the case of rural china we investigate the consequences of imperfect factor market development for farm efficiency in north china we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative as opposed to market allocation of land combined with unevenly developed off farm opportunities using a new household survey we find considerable inefficiency in the use of labour this inefficiency is alleviated by external labour markets and to a limited degree by administrative reallocations the reallocations do not go far enough however which raises important questions about con straints on rental activity and property rights formation more generally jel classification q15 012

growth in china s grain production 1978 1997 a disaggregate analysis abstract this paper analyzes china s grain production during 1978 97 using disaggregate approach to explore disparities in growth patterns of respective crops the study reveals that during this period almost all the increased output can be attributed to the growth of rice wheat and corn the contribution of other crops as a whole was almost negligible the disparities in growth patterns were partly the result of crop adjustments induced by changes in food demand and dominated by substitutions of high yield crops for low yield crops in this process the adoption of new technologies played an important role varying opportunity costs of grain production in different areas also affected growth patterns of respective crops the trend in china s grain production in the past two decades suggests that the adherence to grain self sufficiency has become not only increasingly costly but also unnecessary

aid policies and growth the authors of this paper use a new database on foreign aid to examine the relationships among foreign aid economic policies and growth of per capita gdp in panel growth regressions for 56 developing countries and 6 four year periods 1970 93 they find that the policies that have a great effect on growth are those related to fiscal surplus inflation and trade openness they construct an index for those three policies and have that index interact with foreign aid they have instruments for both aid and aid interacting with policies they find that aid has a positive impact on growth in developing countries with good fiscal monetary and trade policies in the presence of poor policies aid has no positive effect on growth this result is robust in a variety of specifications which include or exclude middle income countries include or exclude outliers and treat policies as exogenous or endogenous they examine the determinants of policy and find no evidence that aid has systematically affected policies either for good or for ill they estimate an aid allocation equation and show that any tendency for aid to reward good policies has been overwhelmed by donors pursuit of their own strategic interests in a counterfactual they reallocate aid reduce the role of donor interests and increasing the importance of policy such a reallocation would have a large positive effect on developing countries growth rates

scaling up foreign aid will the big push work international donors are substantially scaling up aid programmes at the same time there are widespread reservations over how much aid recipient countries can use effectively such concerns are supported by the aid effectiveness literature which finds that there are limits to the amounts of aid recipients can efficiently absorb this article demonstrates that a big push in foreign aid will not lead to diminishing returns as long as donors get the inter country allocation of aid right this is true even if donors provide aid at levels equal to the well known target of 0 7 per cent of their gross national income

private value allocations in large economies with differential information abstract we consider a radner type e g radner 1968 econometrica 36 31 58 pure exchange economy with differential information and a continuum of agents we show that under appropriate assumptions the set of aumann shapley private value allocations in such an economy coincides with the set of radner competitive equilibrium allocations journal of economic literature classification numbers c71 d51 d82

using shadow wages to estimate labor supply of agricultural households with few exceptions most studies of the labor demand and supply decisions of agricultural households in developing countries have relied on the empirical advantages of separability given the questionable nature of some of the assumptions sufficient for separability i apply a recent methodology that accounts for the simultaneity between the production and consumption decisions of a farm household using data from rural india direct estimates of the marginal productivities shadow wages of family male and female labor are derived from a cobb douglas agricultural production function the estimated shadow wages and income are then used as regressors in a structural model of labor supply

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

household composition labor markets and labor demand testing for separation in agricultural household models this paper tests the separation of farm labor supply and labor demand decisions using the observation that household composition is an important determinant of farm labor use with nonseparation after assessing the conditions under which the test has power against several alternatives an empirical model is developed to test the proposition that farm employment is independent of family composition the model is estimated on a data set from rural java the null hypothesis that farm labor allocation decisions are independent of household structure is not rejected the results are robust to different specifications of the labor demand function copyright 1992 by the econometric society

two tier land tenure system and sustained economic growth in post 1978 rural china abstract the two tier land tenure system has been widely blamed for the problems in land allocation and in land specific investment observed in the postreform rural china greater privatization of property rights in land has been proposed to enable productive farmers to acquire more land to promote land circulation to improve farmers access to credit and to encourage farm investment it is argued here that in the presence of multiple market distortions land privatization is unlikely to provide a solution to the agricultural problems rather an approach which refines the existing framework of the two tier ownership system offers more promise

equilibria and incentives in private information economies abstract this paper considers three solution concepts in a large private information economy namely walrasian expectations equilibrium private core and insurance equilibrium it shows that these three concepts coincide with each other when the agents are informationally negligible in such an economy in contrast to the finite agent setting one can construct a large private information economy in which incentive compatibility fails completely in the sense that almost every agent in any walrasian expectations equilibrium private core insurance equilibrium allocation has the incentive to misreport her type

effects of land fragmentation and returns to scale in the chinese farming sector using household survey data from rural china economies of scale as measured by returns to scale and the effects of land fragmentation on crop outputs are examined while these effects are found to be detrimental statistically significant and substantial existing economies of scale appear to be too small to suggest radical land policy changes in china

unimprovable allocations in economies with incomplete information abstract the paper considers an exchange economy with incomplete information in which agents can retrade goods until all gains from trade are exhausted unimprovable allocations are defined to be those allocations from which agents would not wish to deviate either by retrading goods or by revealing further information the concept of unimprovability is then used to analyze a lemons market and an adverse selection insurance market in which agents can renegotiate after information has been revealed finally unimprovability is compared to different concepts of efficiency and to the concept of durability journal of economic literature classification number d82

land consolidation as technical change economic impacts in rural vietnam abstract this paper deepens the economic analysis of the effects of land consolidation reduction of land fragmentation it does this in the context of rural vietnam studying whether land consolidation promotes or hinders the vietnamese government s policy objectives of encouraging agricultural mechanization and stimulating the off farm rural economy the analysis views land consolidation as a form of technical change making it possible to apply the rich insights developed in the economic literature on that subject this treatment reveals that the economic impacts of land consolidation depend partly on its factor bias and partly on the degree to which labor is substitutable in production for other factors at a theoretical level if a technical change is factor neutral it will reduce off farm labor supply and slow rural structural transformation away from agriculture if it is labor augmenting and the elasticity of substitution between factors is low enough the opposite effects are predicted the paper studies these issues empirically for rice production in vietnam focusing on the impact that consolidation of rice land has on rice production machinery use and labor allocation the findings confirm that land consolidation raises both farm productivity and farm income and stimulates increased machinery use it also reduces farm labor supply lowers labor intensity in farming and thereby releases more farm labor to off farm development consistent with government policy objectives based on these findings the paper concludes that land consolidation should be encouraged through development of land ownership rights and the promotion of land rental markets

regulation competition and liberalization in many countries throughout the world regulators are struggling to determine whether and how to introduce competition into regulated industries this essay examines the complexities involved in the liberalization process while stressing the importance of case specific analyses this essay distinguishes liberalization policies that generally are procompetitive from corresponding anticompetitive liberalization policies

on aid growth and good policies this study provides a critical analysis of the growth regressions in burnside and dollar 2000 first we analyse the relationship between aid and government expenditure in a modified neo classical growth model one of the main results of the analysis is that while good policies spur growths they may at the same time reduce the effectiveness of foreign aid second we show that the econometric results in burnside and dollar emphasising the crucial role of interaction between aid and good policies in the growth process are fragile as they are extremely data dependent finally we demonstrate that the burnside and dollar data lend support to the idea that the association between aid and growth can be approximated by decreasing returns to aid this finding conforms well to regression results in other recent studies

uncertainty efficiency and incentive compatibility ambiguity solves the conflict between efficiency and incentive compatibility abstract a fundamental result of modern economics is the conflict between efficiency and incentive compatibility that is the fact that some pareto optimal efficient allocations are not incentive compatible this conflict has generated a huge literature which almost always assumes that individuals are expected utility maximizers what happens if they have other kind of preferences is there any preference where this conflict does not exist can we characterize those preferences we show that in an economy where individuals have complete transitive continuous and monotonic preferences every efficient allocation is incentive compatible if and only if individuals have maximin preferences

moving toward markets labor allocation in rural china abstract china s economic reforms have brought rapid growth in rural off farm employment raising questions about the assumption that rural china is labor surplus and has poorly functioning factor markets we investigate this by testing for separability between household labor demand and supply using panel data we find that separability is rejected overall indicating that factor markets remain underdeveloped nonseparability however is associated with labor surplus in some areas and labor shortage in others moreover separability holds where substantial employment opportunities exist in the wider township suggesting that such employment promotes competitive allocation within villages as well as the inter village movement of resources

the dynamics of chinese rural households participation in labor markets the work is devoted to the dynamics of labor market participation of chinese rural households based on a theoretical farm household framework the choice between four distinct labor market participation states is empirically analyzed using household data over the period 1995 2002 from the province zhejiang we apply a discrete time hazard approach to analyze households labor market participation histories in particular we investigate the movements between autarky and participation in general and more specifically the shifts between part time and full time farming estimation results suggest significant duration dependence more precisely a decreasing risk of moving from one state to another with an increasing time a household occupies one of these states further the likelihoods of starting any participation in labor markets and to start part time farming are considerably higher than to end participation or to return to full time farming in addition we find that labor market participation decisions are significantly related to several household and farm characteristics

classical competitive analysis of economies with islands arrow debreu competitive equilibrium analysis is extended to environments with information sets differing in space as well as in time and with people moving between locations equilibrium is shown to exist and to be optimal and the equilibrium price system is characterized such environments include many of those studies in the sectoral reallocation literature

china s agriculture drivers of change and implications for china and the rest of world the overall goal of this article is to identify major changes in china s agriculture food economy and their implications for both china itself and more importantly to the rest of world china has become one of the fastest growing economies in the world since late 1970s gdp grew at about 10 annually in the past 30 years china s experience shows the importance of both domestic and external policies in achieving sustainable growth the results from this study provide significant policy implications to many countries that are currently china s major trade partners or those seeking greater economic and trade relations with china the main conclusions on the implications of china s rapid economic growth are that china s growth will provide more opportunities than challenges to the rest of the world on average overall the rest of the world will gain from china s economic expansion though this general conclusion may not hold for some countries

the value allocation of an economy with differential information we analyze the shapley value allocation of an economy with differential information since the intent of the shapley value is to measure the sum of the expected marginal contributions made by an agent to any coalition that he she belongs to the value allocation of an economy with differential information provides an interesting way to measure the information advantage of an agent this feature of the shapley value allocation is not necessarily shared by the rational expectation equilibrium thus we analyze the informational structure of an economy with differential information from a different and new viewpoint

what can new survey data tell us about recent changes in distribution and poverty it has been claimed that in recent times the poor have lost ground both relatively and absolutely even when average levels of living have risen this article tests that claim using household surveys for 67 developing and transitional economies over 1981 94 it finds that changes in inequality and polarization were uncorrelated with changes in average living standards distribution improved as often as it worsened in growing economies and negative growth was often more detrimental to distribution than positive growth overall there was a small decrease in absolute poverty although with diverse experiences across regions and countries almost always poverty fell with growth in average living standards and rose with contraction

the off farm labor supply of farmers theoretical and empirical models are developed to examine the off farm wages labor force participation and hours of work of farmers econometric estimates use data from a 1971 survey of illinois farmers the off farm wage depends on farmer human capital and the local labor market the major result confirms the sensitivity of off farm work to economic incentives a 10 increase in the off farm wage entails an 11 increase in hours of off farm work holding farm characteristics constant results also indicate effects of seasonality risk and life cycle factors on off farm work

the potential of land rental markets in the process of economic development evidence from china abstract we develop a model of land leasing with agents characterized by unobserved heterogeneity in ability and presence of an off farm labor market in this case decentralized land rental may contribute to equity and efficiency goals and may have several advantages over administrative reallocation the extent to which this is true empirically is explored using data from three of china s poorest provinces land rental markets and administrative reallocation reallocate land to those with lower endowments but the former are more effective in doing so and have a bigger productivity enhancing effect information on hypothetical market participation suggests that reducing transaction costs in land rental markets could help to realize significant additional productivity gains

village political economy land tenure insecurity and the rural to urban migration decision evidence from china this paper investigates the impact of land tenure insecurity on the migration decisions of china s rural residents a simple model first frames the relationship among these variables and the probability that a reallocation of land will occur in the following year after first demonstrating that a village leader s support for administrative land reallocation carries with it the risk of losing a future election the paper exploits election timing and village heterogeneity in lineage group composition and demographic change to identify the effect of land security in response to an expected land reallocation in the following year the probability that a rural resident migrates out of the county declines by 2 8 percentage points which accounts for 17 5 percent of the annual share of village residents aged 16 to 50 who worked as migrants during the period this finding underscores the potential importance of secure property rights for facilitating labor market integration and the movement of labor out of agriculture

gradualism versus big bang speed and sustainability of reforms a beneficial reform may be blocked by a majority if it is implemented by a big bang but the same reform may succeed with an optimally designed gradualist approach a gradualist approach can sometimes split opposition force and is in this sense more politically sustainable on the other hand if both approaches are politically preferred to no reform a big bang is often preferred to gradualism in terms of both political support as well as economic efficiency

aid allocation and poverty reduction the authors derive a poverty efficient allocation of aid and compare it with actual aid allocations they build the poverty efficient allocation in two stages first they use new world bank ratings of 20 different aspects of national policy to establish the current relationship between aid policies and growth onto that they add a mapping from growth to poverty reduction which reflects the level and distribution of income they compare the effects of using headcount and poverty gap measures of poverty they find the actual allocation of aid to be radically different from the poverty efficient allocation in the efficient allocation for a given of poverty aid tapers in with policy reform in the actual allocation aid tapers out with reform in the efficient allocation aid is targeted disproportionately to countries with severe poverty and adequate polices the type of country where 74 percent of the world s poor live in the actual allocation such countries receive a much smaller share of aid 56 percent than their share of the world s poor with the present allocation aid is effective in sustainably lifting about 30 million people a year out of absolute poverty with a poverty efficient allocation this would increase to about 80 million people even with political constraints introduced to keep allocations for india and china constant poverty reduction would increase to about 60 million reallocating aid is politically difficult but it may be considerably less difficult than quadrupling aid budgets which is what the authors estimate would be necessary to achieve the same impact on poverty reduction with existing aid allocations

control in a dynamic village economy the reforms and unbalanced development in china s rural economy abstract a dynamic control framework is used to model the chinese village economy in order to explain the rural sector s unbalanced growth in the post reform period village leaders are assumed to maximize a multi attribute utility function by manipulating local policy instruments subject to the structural relationships in the economy the model s parameters are estimated econometrically using a data set from forty villages in eastern china the empirical results identify important linkages between agriculture and rural industry in village economies unbalanced growth can partially be explained by the way economic incentives induce individuals in rural areas to move resources toward the rural industrial sector and away from agriculture

bridging the gap between partial and total factor productivity measures using directional distance functions technical dependencies as well as data constraints limit our ability to allocate inputs across sectors and hence our ability to measure sectoral productivity we adapt a directional measure of efficiency to the measurement of sector specific productivity that does not require allocating all inputs across sectors applied to the agricultural sector of a group of countries the results show important differences in livestock and crops productivity growth commonly used partial factor productivity measures for livestock and crops tend to overestimate productivity growth in most developing countries while underestimating it in european countries

financing growth through foreign aid and private foreign loans nonlinearities and complementarities abstract are the growth consequences of foreign aid and foreign private loans different for the recipient nations in this study we analyze in a unified way how these two instruments affect economic growth of 131 developing nations over the period 1996 2010 we find that there are diminishing returns to foreign aid while there are increasing returns to foreign loans using these estimated non linearities we find a critical level of international financial transfer where the marginal effect of foreign aid is larger than that of loans if and only if the transfer loans or foreign aid is below this critical level in addition we analyze the interaction between these two types of transfers and find evidence of complementarity disaggregation of aid into grants and concessional loans suggests that it is in fact the former that exhibits concave relationship with growth

empowerment and efficiency tenancy reform in west bengal the paper analyzes the effect of agricultural tenancy laws offering security of tenure to tenants and regulating the share of output that is paid as rent on farm productivity theoretically the net impact of tenancy reform is shown to be a combination of two effects a bargaining power effect and a security of tenure effect analysis of evidence on how contracts and productivity changed after a tenancy reform program was implemented in the indian state of west bengal in the late 1970s suggests that tenancy reform had a positive effect on agricultural productivity there

responsiveness flexibility and market liberalization in china s agriculture been at most only limited gains from market liberalization if one were to take the findings of this admittedly scant literature seriously it would appear as if there is at most only a relatively small impact from market reforms in china we believe there are three possible but only one plausible explanations for the findings first if market liberalization actually contributes little to no growth or increases in output or incomes this would of course in part explain why economies that lead reform with market liberalization do not experience significant gains theory and the experiences of other economies in other settings however would argue against such an interpretation second it could be that china s agricultural market liberalization has just proceeded so slowly that it is still too early for output to have been positively affected by market liberalization however as seen above the record on the market expansion and the observations of many researchers would not support this view

education and allocative efficiency household income growth during rural reforms in china this paper studies the contribution of schooling to rural income in china during factor market liberalization between 1986 and 1995 the relaxation of controls permitted farm households to reallocate productive inputs from agriculture to nonagricultural activities it is hypothesized that education facilitates this adjustment panel data from sichuan province suggest that schooling enhanced the ability of farmers to devote labor and capital to nonfarm production given the evidence that less than optimum levels of these inputs were allocated to nonagricultural uses during the transition the expansion of nonfarm activities contributed significantly to household income growth

does land fragmentation increase the cost of cultivation evidence from india although a large literature discusses the productivity effects of land fragmentation measurement and potential endogeneity issues are often overlooked this paper uses several measures of fragmentation and controls for endogeneity and crop choice by looking at inherited paddy and wheat plots to show that these issues matter empirically while crop choice can mitigate effects fragmentation as measured by the simpson index increases production cost and fosters substitution of labor for machinery especially for small and medium farmers greater distances between fragments have a smaller effect creating opportunities for market based consolidation could be one step to limit fragmentation induced cost increases

aid and growth regressions this paper examines the relationship between foreign aid and growth in real gdp per capita as it emerges from simple augmentations of popular cross country growth specifications it is shown that aid in all likelihood increases the growth rate and this result is not conditional on good policy there are however decreasing returns to aid and the estimated effectiveness of aid is highly sensitive to the choice of estimator and the set of control variables when investment and human capital are controlled for no positive effect of aid is found yet aid continues to impact on growth via investment we conclude by stressing the need for more theoretical work before this kind of cross country regressions are used for policy purposes

exploring the widening food gap an international perspective using data for a long panel of 90 developed and developing countries this article explores the effects of research and development r d and fixed capital stock on agricultural land productivity over the period 1961 2012 instruments are used for r d to deal with feedback effects and measurement errors the results show very high social returns to investment in r d and to fixed capital stock suggesting that increasing investment in these factors are promising ways of arresting the increasing food prices due to increasing demand for animal protein population growth desertification salinization soil erosion climate change and decreasing growth in land productivity

collective agricultural production a solution for transition economies abstract the paper examines theoretical reasons and provides examples for productivity differences between agricultural service cooperatives and collectives service cooperatives can utilize economies of scale enhance competitiveness and provide technical information advantages that often outweighed problems of free riding low investment and excessive political intervention agricultural collectives while not adding substantial advantages are in addition associated with problems of supervision and effort supply tendencies to substitute casual workers or mechanization for regular members and low investment incentives while collective forms of organization in transition economies respond to high risk and market imperfections they do so inefficiently policies that create conditions for service cooperatives to compete may lead to large productivity gains

induced institutional change or transaction costs the economic logic of land reallocations in chinese agriculture abstract the communal land rights system in china which combines individualised farming with periodic land reallocations provides a good case for testing the economic logic of land reallocations analysis of the results of a unique village survey reveals that a village s choice of land reallocation type partial or large in scale is significantly affected by transaction cost considerations which vary according to village topography and size rather than concerns for economic efficiency tenure security the latter of which is a proxy for the theory of induced institutional change more specifically villages with complex topographies tend to favour partial land reallocation whereas larger settlements tend to reallocate land more thoroughly

aid and performance a reassessment two visions of aid effectiveness and allocation are compared the first corresponding to the new aid paradigm argues that aid is only effective if domestic policies are appropriate the second in contrast argues that aid effectiveness depends on the external and climatic environment the worse this environment or the more vulnerable the recipient countries the greater the effectiveness of aid cross sectional econometric tests related to gdp growth on two 12 year pooled periods clearly favour the second view the two views can be reconciled through the principle of performance based aid allocation where performance is defined as outcomes adjusted for the impact of environmental factors performance can then be measured in several manners which are subject to comparison one approach would lead one to allocate more aid the worse the external environment is for a given policy and the better the policy is for a given environment

missing women and the price of tea in china the effect of sex specific earnings on sex imbalance economists have long argued that the sex imbalance in developing countries is caused by underlying economic conditions this paper uses exogenous increases in sex specific agricultural income caused by post mao reforms in china to estimate the effects of total income and sex specific income on sex differential survival of children increasing female income holding male income constant improves survival rates for girls whereas increasing male income holding female income constant worsens survival rates for girls increasing female income increases educational attainment of all children whereas increasing male income decreases educational attainment for girls and has no effect on boys educational attainment