As an important input factor in economic development of country,land is rapidly transferring from the primary industry to the secondary and tertiary one with the acceleration and propulsion of industrialization and urbanization,as well as adjustment and promotion of industrial structure. This is an objective economic rule in the development of economy and society.In our country,land is implemented socialist public ownership. That means urban land belongs to the State and suburban and rural land is owned by village collectives. Land right of use is contracted out for household to operate by collective group. During the ongoing market economy transformation period,this dual structure of land property right in urban and rural produces duality in the land market,which are urban (state-owned) land market and rural land market.In order to achieve land elements'circulation from the first industry to the secondary and tertiary ones,the State converts collective land one-dimensionally and irreversibly into the State-owned land. Under the situation of complete monopoly of primary land market,the leased land is paid for compensating use right in the Stated-owned land market,which fulfills the connection of urban and rural land markets. Because the State discriminates against the law of collective land property and restricts on the act of principal parts,it results in the appearance of property'defects'in the meaning of Demsetz's and'public domain'produced by government. The latter domain effect is differentiated to the meaning of Barzel's.The thesis analyses from the classical assumption of neo-institutional economics that the State seeks for rent maximization and reducing transaction cost to achieve social output maximization. Land expropriation system which isn't a market-oriented institutional arrangement can economizes transaction cost. And non-public welfare expropriation is to be regarded as a kind of control actions on price or rent. Through evaluation and analysis,it indicates that under the system of tax distribution in the framework of public finance system, land expropriation and lease system has become an important resource of acquiring outside institutional income,which is land revenue. At the land expropriation period,famers and village collective's legal rights are seriously infringed. During the lease period,not only peasants and rural collective are excluded out of sharing benefit of land transition and increment,but also institutional rent value grabbed by local governments appears different extent of dissipation,which is a typical dual loss. Conclusion: collective land should be allowed to enter market and the State should establish a unified urban and rural construction land market in order to reduce rent setting and seeking space of all levels of governments and correlated interest groups,cut off conversion channel from property right rent to institutional rent and enlarge property right rent's share of farmers. |