Theory Of Reservoir Resettlement Compensation Contract

Reservoir resettlement can be regarded as property transactions. A perspective of contract and a conception of transaction cost are used in this dissertation to study the compensation contract of reservoir resettlement.Reservoir resettlement is a kind of contract that is used when the transaction cost of free market exchange is too high. With the support of state power, this kind of contract can reduce the cost of property transaction to facilitate social improvement.The cost of reaching agreement and the cost of implementation are the main factors the state neads to consider when choosing contract. As the state protects the private property rights, the transaction cost that determines the choice of compesation contract is constrained by information cost. According to this research, when information cost is relatively low, the transaction cost of the contract determined by negotiation can be low. When information cost is relatively high, the government would determine the price, to ensure the transaction cost can be reduced, additional contract would be applied.Additional contract not only helps to reduce the cost of compensation, but also helps to reduce the cost of maintaining the definition of property right. According to this research, the variation of the cost of maintaining the definition of property right is the result of the alteration of the transaction cost when different kinds of assets are used to provide income for immigrants. The increase of transaction cost could reduce the income of the immigrants and increase the cost of maintaining the definition of property right of the state. As the enforcer of property right system, the state would try to reduce this cost. For the immigrants, the income could decrease as the transaction cost increases, so the additional contract could be accepted relatively easy. This can explain of'compensation for security', or'compensation as investment fund'.As one part of the property transaction, the state has'the only legitimate violence', the state may not protect the private property right all the time. This means the compensation contract may not be perfect, so acts of state should be constrained in some circumstances to ensure the private property right. According to the case study of the reservoir resettlement compensation in china, the transaction cost is one of the most important causes in the compensation contract change. Transaction cost can be used as both the way of protecting property right and the way of modify property right system. The transaction cost is determined by the results of the implementation of reservoir resettlement compensation contract, as the feedbacks of results could change the evaluation of the cost-benefit of new reservoir immigrants.