Title 1: Forest Devolution in China: Triggers Investment or Deforestation

Abstract: In this paper I investigate whether and how the individualized forestland devolution in China triggered investment in forestland and in turn improved forest resources. The analysis is based on a panel dataset of a two-round survey of 3,000 households in eight provinces covering before and after the forest tenure reform, and spatial data on forest cover and vegetation volume during 2001-2012. We find that the devolution reform resulted in more investments by the owners, through two channels, (i) the tenure security effect by holding a forestland certificate and (ii) the reallocation effect by obtaining more forestland resources. We also find that more forestland devolved to household management in a county led to more forest cover and better forest quality. Our results provide evidence that well-defined and protected property rights for households is an effective option to common-pool-resources management in Chinese small-scale forestry.

Title 2: Allocative Efficiency or Agglomeration? Devolution of Household Forestland Management and Rental Markets in China

Abstract: This paper evaluates whether the devolution reform of forestland to household management has an effect on allocative efficiency and household welfare through participation in rental markets. Using a household panel dataset from three Chinese provinces, I find that forestland rental markets improved efficiency, in terms of factor equalization. With the reform forestland is transferred to land-constrained and labor-rich households, and to households with higher managerial ability. I do not find any support for agglomeration of forestland to richer, bigger, or powerful households. Participation in forestland rental markets increases household per-capita income and decreases the likelihood of income below the village average.

Discussant: Yonas Alemu