Homestead System Innovation And Its Theoretical Explanation

Homestead is farmers' one of the most important properties. Protecting homestead is to protect the most fundamental interests of farmers. Homestead system formed under the planning economic system has played a certain role for our country's industry development, farmers'live and the rural society's stability.However, with the deep social transformation and economic transition, homestead system doesn't adapt to urban and rural development, and produces unfavorable effects on farmera'welfare. Specifically, non-marketing leads to waste and inefficient utilization, welfare nature leads property attribute of homestead system cannot reflect, dispersible layout restricts the improvement of farmers' life quality.Therefore, research on reform and innovation of homestead system is not only the objective need to regulate homestead conversion and establish a consolidated urban and rural land market, but also the objective need to improve the rural land resource allocation efficiency. And at the same time, it is the objective need to safeguard farmers' rights and ensure the rural social harmony and stability.This paper takes "change of element's relative price-benefit game-system innovation" as the analysis framework to reveal rules and trend of homestead system evolution through theoretical analysis and empirical test. The research can provide ideas to homestead system innovation. The main research contents and conclusions are as follows:First, since the founding homestead system change can be divided into three periods: private ownership period (1949-1962), community ownership period (1962 to the late 1990s) and use rights transfer exploration period (2000-present).Privatisation reform realized farmers' dream of owning a piece of land, and has made the government won the people's support. In privatisation reform, the landlord class is passive cooperate. It cannot be denied that privatisation reform changed the proportion of people and their land; reduced the relative prices of land elements; defined the property boundary, responsibility, right and interest; coordinated all parties' interests. Thus it plays a larger performance.Beginning from 1962, in order to realize the target of industrial priority development, goverment changed private ownership to community ownership by ChuJiShe, GaoJiShe and the people's commune movement. Land ownership's change requires rural collective to provide social security for farmers. Therefore, collective security is the salient features of the rural social security in this period. March 20th,1963 the central issued "The notice about some supplementary regulations of homestead"; first used the concept of "homestead use right"; and build application, examination and approval procedures; established free, non-circulation, non-ended and identity system framework. However, the collective ownership reform makes rural land ownership fuzzy, it means no one has the power to reject others using rural land, everyone does their best to use rural land. The result is homestead overuse and appearing "tragedy of the Commons".Since 2000, judging from the state laws and regulations, homestead still owned by collectives and is strictly limited to transfer to other organizations. But, with the advancement of industrialization and urbanization, land demand has increased dramatically; the existing state-owned land has been unable to meet the development of industrialization and urbanization. So land resources became more scarce, land relative price increase. And all this increases external profit in homestead circulation. In order to pursue these external profits, some farmers despite legal risk and gain earnings through homestead invisible circulation. Some local governments get more land index through the "three concentrations" and "double replacement".Review homestead system change course since the founding, we summed up the two laws:first, the trend of land's relative price change and homestead privatisation change is consistent on the whole. Second, because of the existence of interest group, the speed of land's relative price change and homestead privatisation change is not consistent. This means that, we should consider change of homestead's relative price, and let homestead system innovation fit change of homestead's relative price. At the same time, we should consider the preference and influence of various interest groups. On the one hand, system arrangement will accord with preference of various interest groups and coordinate the interest conflict. On the other hand, we should make use of interest groups to promote and strengthen homestead institutional transition. Second, Chinese social transformation produces significant influence on China's rural social, economic and cultural. Especially in recent years, the impeccable rural market economy, the rapid industrialization and urbanization, the development of urban and rural produces significant influence on rural land system. The requirement of market is to admit land assets attributes, to admit compensated use of land, and to promote land circulation by market means. Industrialization and urbanization need to occupy a lot of land, the land become more and more scarce. The development of urban and rural promotes the urban and rural population flow, changes the proportion of people and their land. From the above, the needs of land, the appearing of land assets attributes and change of proportion of people and their land together improve land's relative price.In the current legal system framework, homestead dispositions are free, non-circulation, non-ended and identity. These dispositions cann't make change of land's relative price to change benefit pattern between homestead owners, users and administrators. If reforming homestead system by market can add land appreciation income, land scale use effect and land configuration optimization effect. It can also reduce the transaction cost during execution of homestead system. All those can be called external profits.In the current legal system framework, homestead dispositions are free, non-circulation, non-ended and identity. These dispositions cann't make change of land's relative price to change benefit pattern between homestead owners, users and administrators. If reforming homestead system by market can add land appreciation income, land scale use effect and land configuration optimization effect. It can also reduce the transaction cost during execution of homestead system. All those can be called external profits. The external profits stimulate farmers, collective economic organizations and government to internalize external profits. When various objective conditions have been met, parties design system device, promote system innovation.Third, in our country rural homestead system constituting and innovation practice, the central government, local government and farmers are the main interest group. The central government wants to use the existing system to maintain stability of rural society, speed up the rural land marketization, and increase farmers' land property income. In order to increase the fiscal revenue, local governments have the high enthusiasm to promote homestead system innovation, especially the local governments that land resources are scarce, economic development faster. Farmers are the most direct stakeholders in homestead system innovation. The system arrangement that is scientific, considering with the interests of farmers, is able to protecting farmers'rights.In order to reflect the inner relationship between various interest groups, the paper using set theory of Wayne figure to build corresponding logical model. In Wayne figure logic evolution process, we found that the central government's strategy action is the intersection of resources optimal allocation, farmers' needs and social stability. Local government's strategy action is the intersection of law system framework, superior government requirements, economic development needs and farmers demand. Farmers' strategy action is the intersection of government control, farmers' action ability and resources controls. If each intersection is larger, the space of each strategy action is larger. If three represents' intersection are larger, their will more easily reach a consensus on homestead system innovation.Of course, the central government, local government and farmers' strategy action is not always perfectly. There exist efficiency losses in system arrangements under the force. Therefore, in order to improve the efficiency of homestead system innovation, we will coordination interest conflicts between central government, local government and farmers. Of course, the central government, local government and farmers' strategy action is not always perfectly. The system arrangements under the force exists efficiency loss. Therefore, in order to improve the efficiency of homestead system innovation, we will coordination interest conflicts between central government, local government and farmers. And we will make their action anastomosis. Therefore, we must support farmer interest groups formation and development, inhibit strong interest groups to excessive permeate in public policy, change government role. These can coordinates each action and ensure the formation of the reasonable equilibrium.Fourth, on the base of above theoretical analysis, the paper constructed the model to checkout the relationship between land's relative price variations, benefit game and homestead system innovation using least squares method and the random effects model with 30 villages investigation. It is found that, there exists an inherent logic connection between changes of land's relative price, benefit game and homestead system innovation. Shortage of rural land resources, land utilization, geographic conditions, economic condition, human capital and policies are the important factors which influence homestead system's innovation. Among them, the per capita area of homestead, per capita net income of farmers and policy are the significant factors influencing homestead ystem innovation. Finally, the paper summarizes and concludes the research content, and put forward some suggestions and policys to promote homestead system innovation. The suggestions include two requirements and four policy measures. The two requirements are considering change of homestead's relative price to let homestead system innovation fit change of homestead's relative price, leading and managing interest group to ensure the formation of the reasonable equilibrium. The four policy measures arc property rights system reform, land market construction, collective economic organization transformation and rural social security system completing.