Unpacking the effects of rural homestead development rights reform on rural revitalization in China

Rural homestead development rights (RHDR) reform is considered a pivotal tool for promoting rural revitalization in China. Thus, identifying the impact of RHDR reform on rural revitalization is crucial for comprehensively understanding the ongoing rural homestead system reform in China. We propose a unified theoretical framework to unpack the effectiveness of RHDR reform by contracting the effects of two approaches, i.e., the collective-oriented and the household-oriented strategies. Our theoretical analysis suggests that the two approaches affect rural revitalization differently through five channels, and the overall effects are stronger for the collective-oriented approach. Based on an unbalanced multi-period panel dataset from 2006 to 2018, we develop a comprehensive index system to measure rural revitalization. We then use propensity score matching combined with a difference-in-differences model and a two-way fixed effects model to identify the net effect of RHDR reform on rural revitalization. The baseline empirical results show that the rural revitalization performance of the treatment group with the RHDR reform is significantly higher, on average, than that of the control group. Further impact heterogeneity analysis shows that collective-oriented RHDR reform has a stronger impact than household-oriented RHDR reform on promoting rural revitalization. The findings not only underpin the significance of further conducting rural homestead system reform to comprehensively promote revitalization in China, but also provide a reference for the validity of the rural community as an effective organizational subject to reuse land resources intensively in a developing economy with an imperfect rural land market.