Institutional Transitions Of Rural Collectives Property Rights Under Urbanization

Non-agriculture industries have developed very rapidly in Wuxi since 1979. The structure of labour force changed greatly, the proportion of non-agriculture labour force increased from 44 percent in 1978 to about 80 percent in 2003. the proportion of nonagri-industries production increased from 85.7 percent to 96 percent during the same time. Per capita GDP increased from $636 in 1978 to $5200 in 2003 just because the rising of the proportion of nonagri-labour force. But the proportion of non-agriculture population only increased from 19.3 percent to 41.3 percent during the same time. The ratio of NU, which reflects the level of urbanization, is about 2, which is 2 times of normal value 1. The level of urbanization of Wuxi is higher than that of national average, but it relatively lagged behind Wuxi's economic development and the level of nonagriculture. The main effect factors on the lag of Wuxi's urbanization level are the dual-resident system, the benefit and the opportunity cost of migration. The dual-resident system was abolished. It is difficult for the institutional arrangements between urban and rural be consistent for the lag of urbanization of Wuxi. The marketing arrangement of productive factors in large region meets a lot of obstacles from laws and economy. The aggregate effect of urban on industries cannot work well. In order to promote rural urbanization, improve the aggregate effect of urban on industries and enforce regional economic competition, Wuxi municipal issued "Three Centralizations" policy (A Centralization of Industries to Industries Zone, A Centralization of Land to Scale Farming, A Centralization of Resident to Residential Zone). One of the essences of the Three Centralization is to realize rural urbanization.Rural urbanization needs a lot of institutions innovation, and the basic of that is the rural collectives institutional innovation, since rural urbanization includes not only the simple change of status of villager and shift of geography position of residence, but also modernizations of production, life and management system, and improvement of life. Theregional closure of rural collectives conflicts with the economic opening of free shift of capital and labor, which rural urbanization needs; the "cadre economy" of rural collectives conflicts with democratic management which urbanization needs. If urbanization were realized by regionalism and rural collectives kept its original system, you will see the images of "villages in urban" and "modern industries" in rural area, and will find two models of "urban" and "rural" in management system and mechanism.Rural urbanization need clarify the relationship of collectives asset and its member, in order to decrease the opportunity cost of member's migration and avoid the loss of member's share of collectives asset when they migrate. Otherwise member has no enthusiasm for migration for worrying about loss of his share of collectives asset and income from it.Rural collectives property rights are vague and rural collectives have on their own organizations and framework in rural collectives now. TVGs(Town-Village Government) hold the control rights and residual claimant of collectives asset. When members leave their rural collectives, the TVGs deprive their membership and their benefit of collective assets. When villager residences combine, the collectives assets combine simply. When someone migrates to the village, he becomes collectives membership and share collectives benefit. In order to protect his share of collectives assets, he doesn't leave his village and prevent newcomer from moving in their village. The management system and mechanism conflict with what urbanization need.In order to fit rural urbanization and protect their benefit, Chenxian village governors took the lead in transferring collectives into cooperatives by admeasure collectives assets in stock according villager's desirability with the supports of town, county and municipal government. It opened up an efficient path for reforming rural basic system rapidly and pushing urban...