The Economic Logic of Rural Land right

The issue of land rights, especially the issue of rural land property rights, has become a hot issue concerned by academic circles, government decision-making departments and public opinion media. Behind this issue is the debate about "where is China's rural land system going?" In this paper, the author tries to sort out the evolution of the rural land property right system since the founding of the people's Republic of China, and analyze the economic principles behind the land property right, in order to find the clue about "where the rural land system in China is going".

Should the land belong to the private or the collective? This is the most fundamental issue about property rights, and it is also the focus of debate between two competing ideologies-capitalism and socialism. The institutional choice of land ownership not only affects economic life, but also has an important impact on other social institutional arrangements. Defenders of private property rights say that this institutional arrangement promotes individual freedom, political stability and economic prosperity, while for supporters of public property rights, private ownership of land is the root of the evil of capitalism, which not only brings about inequality of wealth. it also leads to the division of society and, more importantly, a social environment of mistrust between people as a result of painstaking competition among individuals. The collective ownership system of sharing land can avoid these disadvantages and create a world in which everyone is equal. Putting aside these ideological arguments, from the perspective of economics, what kind of institutional arrangement is the most efficient, which is the main issue that we should consider. Then we analyze the evolution of the rural land property right system since the founding of the people's Republic of China.

I. the changes of rural land property right system since the founding of the people's Republic of China and its economic explanation.

Over the past 60 years, the institutional change of rural land property rights in China has gone through four stages: land private ownership, cooperation and people's commune, household contract responsibility system and land transfer period.

1. The period of private ownership of farmers' land. In the process of the founding of New China, the Communist Party of China redistributed the land through the "land reform", which enabled the farmers who had no land or little land to obtain the private property rights of the land and realized "land to the tillers". And the government issued a "land property ownership certificate" to the farmers who acquired the land, which clearly stipulates that the land is private property, and the farmers "have complete freedom to cultivate, live, pawn, transfer, donate, lease and so on. No one shall infringe upon it. Farmers'"land ownership" was also confirmed by the 1954 Constitution. At this time, farmers' right of possession, right of use, right of income and right of disposition are integrated, which is a typical classical property right form. Farmers farm and operate on their land to make ends meet. This kind of private land ownership has both advantages and disadvantages. Its main advantages are as follows: first, private land ownership is a concise and effective institutional arrangement to encourage farmers to make the best investment and use of the land they hold. When a person owns the property right of the land, he is free to decide how to use the land, such as which crop to plant, when to invest in soil and water conservation and the construction of corresponding irrigation and water conservancy facilities. Second, the cost of supervising the boundary of private ownership of land is relatively low. Compared with collective ownership, an individual landowner has more incentives than a collective member to supervise the boundary or assume any other type of supervisory responsibility. Because a sole owner will bear all the losses as a result of his slackness and negligence, while a collective member will bear only a small portion of the possible losses. Of course, the private ownership of land property rights also has some shortcomings, for example, when there are many individual independent landowners, it is more difficult to determine the land boundary and identify the landowners, which will cost a lot of cost. For example, when land expropriation or transaction is needed, it is necessary to negotiate with individual landowners one by one, which is bound to increase new transaction costs. The main reason for the institutional change at this stage is that Communist Party of China, as the ruler of the new regime, should fulfill his promise, win the trust of the people, and achieve the goal of stabilizing the regime and restoring the rural economy. This is a typical compulsory institutional change, but this institutional arrangement of land property rights did stimulate the enthusiasm of farmers at that time and promoted the rapid recovery of the rural economy.

2. The period of cooperation and people's commune. At this stage, after three interrelated and intersecting stages of mutual aid groups, primary producers' cooperatives and senior producers' cooperatives, we finally reached the people's commune of "one big and two public". Under the system of the people's commune, the means of production of the peasants are all returned to the public, not to mention the land, and the land property rights of the peasants have changed from private to public. All the property rights of agricultural land belong to the collective, and the farmer is only a member (member) of the collective organization, and a passive laborer can only obtain labor income according to the amount of labor. Although in 1962, the vast majority of people's communes gave farmers a certain amount of private land, and allowed to operate family sideline, the core farmland property rights system has not fundamentally changed. There are many reasons behind the institutional changes in this period. First of all, the private ownership of farmers' land ownership formed by the "land reform" is not the product of long-term spontaneous transactions in the property rights market, but the result of the direct redistribution of land by the state through large-scale mass movements. The party played a decisive role in the process of organizing and leading the peasants to divide the land equally, and at the same time, the result of the equal distribution of land was quickly legalized by the recognition of the state, so the party, which led the land reform and privatization movement, put his will into the land property rights of the peasants. When the interests of the party and the state need to change the land property right system, the land property right system must be changed accordingly. In other words, the private ownership of farmers' land ownership formed in the "land reform" already contains the factors that the state can change the land property right system again through policy adjustment. A fact pointed out by Professor Zhou Qiren supports this view. As early as the first half of the 1950s, when national policy makers debated at the upper level whether to continue to implement the new democratic economic policy and whether to protect farmers' individual private ownership, farmers themselves do not have much pre-decision-making voice and post-decision-making choice. Secondly, the actual needs faced at that time were to solve the problems such as the low production capacity of individual farmers, the suppression of new land mergers, and the rapid accumulation of original capital for the country's industrialization, which led to the deprivation of farmers' private land rights. However, in the state of collective property rights, on the one hand, the collective labor measurement and supervision of its members in agricultural labor is not complete, which leads to insufficient incentives for their members' enthusiasm for work; on the other hand, the incomplete property rights of regulators lead to insufficient incentives for regulators. These two reasons lead to the inefficiency of this land property right system, which can only end in failure.

3. The period of household contract responsibility system. During this period, the property rights of rural land were divided: the separation of ownership and contractual management rights. The ownership of the land still belongs to the rural collective, but the right of contracted management belongs to the peasant family. The contracted management households first occupy all the fruits of labor, and then, according to the state policy, after the peasants have completed the taxation and ordering tasks handed over to the state and the collective retention and overall planning, the production surplus will be owned by themselves. Its essence is to change the production distribution in rural areas through the separation of ownership and the right to use, so that rural contracted households become producers and operators who are responsible for their own profits and losses. In this way, a relatively clear and relatively stable causal relationship between the possession and use of land and output and income has been established, which has greatly aroused the enthusiasm of farmers in production. In fact, this institutional arrangement is that the peasants lease the land owned by the collective for farming operation, and then occupy the agricultural labor surplus, thus forming a balance of interests among the state, the collective and the peasant household. It not only solved the problems of labor measurement, supervision and incentive in the period of cooperation and people's commune, but also solved the problem of food and clothing for farmers. According to the empirical research of Professor Lin Yifu, the transformation from collective ownership system (production team system) to family responsibility system was the main source of agricultural output growth from 1978 to 1984.

4. The stage of land transfer. At this stage, there is another differentiation of rural land property rights: the separation of ownership, contract right and management right. That is, the ownership still belongs to the rural village collective, the contract right belongs to the farmers' families, and the management right is transferred to the third party (farmers' cooperatives, enterprises, large families, etc.). This differentiation of property rights is supported at the national level by amending the Constitution to allow land use rights to be transferred with compensation for a certain period of time in accordance with national laws and policies. The Rural Land contract Law of 2003 protects farmers' right of management of contracted land from the legal level, and the legally acquired land contract right can be subcontracted, leased, exchanged, transferred or transferred by other means. The new Land Management Law also clearly stipulates: "the right to the use of state-owned land and collectively owned land can be transferred in accordance with the law." In practice, the specific practices in different areas are different. In some places, the land of scattered farmers is first concentrated through farmers' professional cooperatives, or leased to others or cultivated by the original peasant households. In some places, enterprises and large households are in direct contact with scattered farmers. However, different forms are to form the scale operation of agriculture. In this way, the land can be transferred, which creates conditions for the further industrialization and modernization of agriculture, promotes the professional development of agriculture, forms the rural land market and land price, and increases the income of farmers, mainly land rent.

Judging from the above process of the evolution of land property rights, no matter whether the property rights are owned by the state, collectively owned or privately owned, this is not the essence and crux of the problem, but the core of the problem lies in the implementation ability of property rights. it lies in the realization of the right of use, disposition and income separated from ownership. If you have the ability to implement property rights, you can decide how the land is used, you can dispose of the land freely, and you can obtain the income on the land, it doesn't matter who owns it. It is rare to see that the emergence of "nail households" is precisely because he has a certain ability to implement property rights in his hands. In addition, there are many factors affecting the ability to implement property rights, such as national laws, policies, traditional habits, public awareness and so on, are extremely important, but perhaps the most important is the degree of differentiation of property rights. The differentiation of property rights means that the property rights of specific property can belong to different subjects. For example, the ownership of land (ownership in a narrow sense), possession, use, benefit and disposition can be divided and belong to different subjects. The differentiation of property rights depends on the actual social and economic conditions, but fundamentally depends on the contradiction between productive forces and production relations. As far as the real subject of rights is concerned, the differentiation of property rights depends on the tradeoff between the ability of exercising multiple rights by oneself and the exercise of part of power by other subjects. For example, when he has the ability to perform multiple functions at the same time, he needs to choose between leisure and work; when he has other work to do, he needs to choose between different workplaces. Due to the different opportunity costs and personal preferences, the specific choices may be different. From the overall trend, with the improvement of the degree of socialization of production, the development of property rights from unity to decentralization is a concrete manifestation of the development of social division of labor in the exercise of property rights. The essence of property right differentiation is the division of labor in which property rights can be exercised, which obviously improves the operational efficiency of property rights, so it is one of the signs of social progress. Although there is no lack of the fact of the unity of property rights in modern society, from the overall trend of the evolution of property rights in human society, it is a general trend to develop from the integration of property rights to the differentiation of property rights, and the differentiation tends to be more and more refined.

By reviewing the evolution history of the rural land property right system since the founding of the people's Republic of China, we can see that the process of the change of the land property right system is also the process of the differentiation of the land property right to a great extent. although in the early days of the founding of the people's Republic of China, rural land property rights experienced a period of classical property rights. In the process of the change of China's rural land property rights system after the reform and opening up, it has not touched the constitutional provisions of collective ownership of rural land, but it has greatly improved the implementation ability of rural land property rights. Specifically, it is the distribution of various specific powers with the land use right as the core-the collective ownership of land, the land contract right of farmers and the land use right of the third party. Different right subjects have limited land property rights, and can implement their own property rights in accordance with their own choices, so as to maximize the efficiency of land use. In fact, there has been a rural land property right system of property right differentiation and property right transaction in the history of our country. From the middle and late Qing Dynasty to the early Republic of China, according to the different ownership of property rights, the rural land at that time was divided into three categories: Qingtian, Mintian and Haktian. The ownership and the right of use of Qingtian are integrated; the civilian land is also called Da Pi Tian, and the owner does not own it, so it has everything but no right to use it; Ke Tian, also known as small Pi Tian, occupies farming, but has no ownership. The property rights of these three types of land can be freely traded and circulated according to the agreed prices of both parties, regardless of different forms such as sale, mortgage or tenancy. Civilian land can be bought and sold, but can not be deprived of the right of Haktian, that is, the right to farming as the occupant. This is the permanent tenancy system, although the landlord holds the ownership of the land, but its right to use has been quite independent, which means that the users of the land can freely transfer the right to use the land without being subject to the landowner. However, due to the limitations of social objective conditions at that time, especially the backwardness of technical conditions and the increasing population pressure, such institutional arrangements did not achieve the affluence of farmers' life, and farmers were still struggling on the line of survival.

The differentiation of property rights is in line with the logic of economics, which reconfigures the ownership of property rights through transactions between the subjects of rights. This is not only a process of market transaction of property rights, but also a process of optimal allocation of property rights. The differentiation of rural land property rights is the result of farmers' pursuit of maximization of their own interests under specific environmental constraints. Under the premise that the property right is clearly defined and the transaction is carried out voluntarily, the situation of all parties to the transaction can be improved. Under the condition of equal transaction of property rights, land is gradually concentrated in the hands of more efficient contracted management households, the best combination of various rights of land and rural operators is gradually formed, and the efficiency of land use has been improved. finally realize the optimal allocation of rural land resources. Therefore, from the perspective of economic efficiency, the process of independent transaction of rural land property rights is the process of self-optimal allocation of land resources.

As for what is the most efficient land property right system, there may be no universal land property right system, but only a relatively efficient land property right system that is suitable for the place at that time, that is, under certain constraints. The evolution process of China's rural land property right system is the result of the evolution to efficiency under the constraints of our social environment.