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Land Tenure Choice in Chinese Villages: The Rational versus the Political Model

The rational and political decision models are developed and tested for the land tenure choice in rural China. A novelty of the test is to link the collective decision with general relative factor scarcities. Competing hypotheses are developed for the two models and tested with panel data collected on 83 Chinese villages. The results show that neither model is strongly rejected although the political model fares slightly better in more sophisticated econometric testing. This suggests that popular political participation is emerging in Chinese villages. Implications of this finding to Chinese land policy are discussed. (JEL O12, P32)