A Transaction Cost Analysis Of The Land Conversion Process

The process of Land use conversion means land-use change, from the agricultural land to the others. The focus of the analysis is the institutions of the land-use, What is the appropriate role of the government and the market, it’s a debate for a long time. Transaction cost theory as branch of the New institutional economics, Transaction cost theory beyond the debates of’market versus the government’or’market versus the planning’, assumes that planning and development control and market can exist and not mutually exclusive at the same time, both are institutional arrangements. it is more consistent with reality, So it has been applied to the study of institutions of land-use planning and development control. During the Third Plenary Session of the18th CPC Central committee, the reform of the land system were put forward and became the major themes. The direction of the reform is to establish a unified land market, so the analysis of performance of the existing land institutional system and find the solution to improve the land institutional system.This study is based on the Transaction Cost Theory, to identify the transaction in the process of Land use conversion, then to establish the way of measure the transaction cost in the process of Land use conversion, last, to explain the alignment of alternative institutions, and to clarify the analytical framework of land use conversion. Then, Under the institutional environment of land development for commodity housing in China, to identify the transaction cost in the case of the city of B and X,by using the method of process analysis and case study. Confirm the transaction cost is result from centralized system of land use management and multiple conflicts of interest between the different participants in government and excessive administrative approval of residential development and over regulation of land property. to compare China、Britain、Netherland’s institutional framework and transaction cost, pointed out the institutions of land planning and control development should be change, it will reduce the transaction costs when making decentralization reform,etc.Finally, put forward proposals for reform, including to improve the planning system and to optimize the development mode and to improve the reform of administrative approval and to establish performance management and to clarity the rural collective property rights.