Incentive contract or tenure reform? Understanding the transition of forest resources management in China
Abstract
Purpose
China’s government has been facing a trade-off in choosing between tenure reform and forest concessions to manage forest resources. The purpose of this paper is to investigate how the government’s policy choices can be affected by environmental benefits and the economic value of forests.
Design/methodology/approach
We build a simple theoretical model and employ province-level data.
Findings
The results show that the government will allocate less forestland to local people if environmental concerns are more important and privatize less forest if the economic benefits from forest are higher.
Social implications
Therefore, the transformation of forest management policies reflects not only the government’s own preferences but also its gradual adjustment to the changing market and institutional environment.
Originality/value
The present paper provides a regulation approach that complements the growing literature on forest resource management.
Keywords
Acknowledgements
JEL Classification — Q15, Q28, P21
The authors thank Thomas Sterner, Qian Weng, Jintao Xu, and seminar participants at the University of Bonn, University of Gothenburg and Beijing Normal University. Financial support from Swedish International Development Cooperation Agency (SIDA) to Environment for Development, National Natural Science Fund (Project No. 71303022), MOE (Ministry of Education in China) Project of Humanities and Social Sciences (Project No. 13YJC790039), and the Fundamental Research Funds for the Central Universities is gratefully acknowledged. All errors are those of the authors.
Citation
Wei, J. and He, H. (2016), "Incentive contract or tenure reform? Understanding the transition of forest resources management in China", China Agricultural Economic Review, Vol. 8 No. 1, pp. 112-128. https://doi.org/10.1108/CAER-09-2014-0085
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited