Land development in urban villages in China : constraints and evolution from an institutional perspective

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Land development in urban villages in China : constraints and evolution from an institutional perspective

 

Author: Lai, Yani
Title: Land development in urban villages in China : constraints and evolution from an institutional perspective
Degree: Ph.D.
Year: 2014
Subject: Land use -- China -- Planning.
Land use, Rural -- China -- Planning.
Urban-rural migration -- China.
Hong Kong Polytechnic University -- Dissertations
Department: Dept. of Building and Real Estate
Pages: xiv, 172 leaves : illustrations ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2762964
URI: http://theses.lib.polyu.edu.hk/handle/200/7762
Abstract: Urban village is a unique phenomenon in the rapid urbanization process in China. This study defines urban village as the product of village-led land conversion and development for urban activities. The key question that this study attempts to answer is "How do institutional arrangements on property rights over collective land affect land development behaviours and outcomes in urban villages?" Additional questions include the following: Have institutional arrangements on land property rights evolved in relation to the development of urban villages? How have property rights over collective land been clarified in a reform-pioneer city such as Shenzhen? This study aims to address these questions, which are important yet have been inadequately explored in the existing literature. Based on the key concepts and analytical methods of the New Institutional Economics (NIE), this study develops a conceptual framework to analyze and assess the institution arrangements on land property rights in the Chinese urbanization process. The implications of the institutional arrangements (and their evolution) to the land development behaviors and outcomes are specified in a set of theoretical propositions. These propositions are empirically examined based on comprehensive data from Shenzhen with rich dimensions and levels. The study shows that the institutional arrangements on land property rights are largely state led, which empowers the local states in the land conversion and development process. Village-led urban development in the urbanization of China suffers from severe institutional constraints because the villages' land property rights are incomplete. The key institutional constraints include (1) the lack of land security caused by the possibility of government expropriation, (2) unequal access to credit because of unequal land rights, and (3) absence of state regulations on collective land transactions as a result of the lack of de jure property rights. These institutional constraints to villages' land rights weaken land-related investment incentives and the ability of the villages, and result in inferior infrastructure and sub-optimal development.
Although state-led institutional arrangements on land property rights work well in the greenfield development process, they can hardly be implemented in the redevelopment process due to the increasing transaction costs involved. Changes in transaction costs to cities that rely heavily on land redevelopment in sustaining economic growth may create incentives for institutional change. In the case of Shenzhen, almost all the vacant land available for construction has been exhausted over the years. Shenzhen has undergone significant institutional change to promote redevelopment. Institutional change in land property rights has effectively reduced the transaction costs involved in the land development process, and facilitated the redevelopment of urban villages. Urban villages (with collective land system) will be gradually integrated into formal urban areas (with state land system) via redevelopment. The empirical study suggests that village sites with better accessibility to good transportation facilities and the city center are significantly more likely to be redeveloped and thus will be integrated into formal urban areas earlier than those located in less accessible areas.

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