Chengdu prefecture includes 20 counties/districts with a total area of 12,000 km<sup>2</sup> and a population of 11 million, of which 5 million are rural residents. In 2008, it was named as pilot area for the comprehensive reform under a Commission for Balanced Urban-Rural Growth (CBRUG). Three key changes were introduced (Li 2012). First, a participatory effort to title all land -including agricultural, construction, forest, and wasteland- and to establish a registration system was implemented under the authority of administrative villages. The purpose was to establish clear and secure property rights as a basis for long-term contracts for agricultural or construction land.<sup>6</sup> Second, the Chengdu Rural Property Rights Exchange was established as a platform for transactions of all types of rural property rights, including construction land quotas to allow more market-oriented and transparent mechanisms for price discovery. It also aimed to allow farmers and collectives to take the initiative in auctioning construction land quotas through competitive bidding and the role of Government to shift to that of a regulator and supervisor. Introduction of tradable development rights allows voluntary market-driven access to land for non-agricultural purposes in ways that can benefit local communities.<sup>7</sup> Third, to encourage migration, _hukou_ restrictions were eliminated and regulations to allow easier transfers of rural construction land were passed. At least in principle, this would allow migration without the fear of losing an essential social safety net,<sup>8</sup> or the sale of part of a migrant’s land in her place of origin to finance start-up of small enterprises in urban areas.

The experiment attracted interest from policy makers, scholars and the media. Case studies point towards positive reform effects in terms of (i) higher levels of investment in high-value perennials and vegetables due to a reduced threat of expropriations and reallocations and confidence in the stability of land ownership triggered by award of formal documents; (ii) increased volume of land transactions for agricultural and construction land that are likely to enhance efficiency and an incipient markets for secondary transactions and land conversion; and (iii) job creation in agriculture and other industries and higher wages or incomes as gains from reforms are shared more broadly throughout the local economy. Although potentially very valuable to identify underlying mechanisms, such anecdotal evidence if often based on non-representative samples and lacks a clear counterfactual, and does not allow quantification of benefits in a way that can be compared to the cost of the intervention. To provide these and, in doing so, draw out the implications of the experiment in a more systematic manner, more systematic survey evidence is needed.

# **2.3 Analytical approach**

To analyze village level impacts of Chengdu’s reforms, we use data from a 2014 survey that collected data, largely based on administrative records, in neighboring villages on both sides of the administrative border

> 6 Titles to homesteads were given on occupied land although the size of plots frequently exceeded legal norms or what was documented on past certificates. Use rights to collectively owned construction land, e.g. for rural enterprises, public interest, and other purposes, were also documented. 7 A fund to strengthen protection of farmland, replenished from fees from transfers of land use rights and charges on newly developed construction land, is used to cover farmers’ contribution to old-age pension insurance and to provide subsidies for land protection.

> 8 This allows households to participate in rental without sending a signal that they do not need the land and make them subject to reallocation.

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