Does Property Rights Integrity Improve Tenure Security? Evidence from China's Forest Reform

The purpose of this paper is to examine the impact of land property rights integrity, subdivided into use rights, mortgage rights, and transfer rights, on household perceptions of long-term tenure security in China. To this end, we establish a theoretical framework that links China's collective forest tenure reforms undertaken since 2003 to property rights integrity and two sources of tenure (in)security based on property rights theory: forestland reallocation and expropriation. Probit models are applied in the empirical analysis to household data collected in Jiangxi province in 2011 and 2013. The results indicate that household perceptions of tenure insecurity resulting from forestland reallocation expectations are affected by transfer rights, whereas household perceptions of insecurity resulting from forestland expropriation expectations are not affected by forestland rights. We thus suggest that it is crucial for policymakers to identify the sources of local property rights insecurity before they take steps to strengthen land tenure security. This paper contributes to the available literature on the relationship between property rights integrity and tenure security by identifying different sources of tenure insecurity, emphasizing the effect of property rights integrity on long-term tenure security, and taking into account the potential endogeneity problem.