Study On The Innovation Of Land Requisition System From The Perspective Of New Institutional Economics

The current land expropriation system has become a focusamong the government, academia, ordinary people due to theexisting problems in such aspects as farmers’ rights and localfinance. This article reviews representative views among scholars;comments on these views from the perspective of the New Institutional Economics and proposes theoretical explanationsand some suggestions.Adopting tools of the New Institutional Economics, thethesis analyzes the current land expropriation system in terms ofits development, the present situation and its innovation from thefollowing perspectives: the system of property rights theory,transaction cost, rent-seeking, supply and demand and ideology.Qualitative analysis and normative analysis are adopted.This article reviews the development of the landexpropriation system in three aspects:(1)the formation of ruralcollective land property right system,(2)the nationalization ofurban land and (3)changes in land expropriation system. Afterreview, the author draws four conclusions:(1) Land propertyright has been heading towards its divorce from the government;(2) The relative price of the land(a production factor) greatlyinfluences the development of the system;(3) The development ofthe system is consistent with the reduction of transaction costs;(4)ideology is instrumental in the development of the system. Thecurrent land expropriation system is facing four major problems:farmers’ dissatisfaction due to low compensation, unsustainable “land finance”, low utilization of urban lands and seriouscorruption related to land rent-seeking.As for the innovation of the system, there are threeproposals:(1) to maintain the existing system and improve landrequisition compensation;(2) to impose restrictions on thegovernment’s power on land expropriation and commercializethe collective land;(3) to approve farmer’s right on rural land andallow the land be used by urban though market.The core of thesethree proposals is the government’s power on land expropriationand the collective property rights system of rural lands. In termsof the demand, the collective interests and individual interests offarmers who operate lands should be improved. But in terms ofsupply, the central government is constrained by finance,ideology and the costs resulting from the replacement of theexisting system with a new one. At present, imposing restrictionson the government’s power on land expropriation is conducive tosafeguarding the collective and individual interests, improvingthe market system and reducing land rent-seeking. In this way,the efficient allocation of land resources is realized and the socialefficiency is improved. Although the approval of rural lands isbeneficial to land circulation and scale operation, it increases thetransaction costs in land expropriation. In a word, at present, thegovernment’s power on land expropriation should be limitedrather than cancelled. The collective property rights should not beweakened but be innovated in terms of its implementation. Thecollective economy should be developed. Due attention should be paid to finance in the innovation ofthe land requisition system. Its innovation calls for that in othersystems such as compensating farmers for their lands accordinglyand making a list of land requisition, commercializing thecollective land while improving the land use planing,enrichinglocal finance by reforming the tax system, enhancing collectiveeconomy and encouraging local innovation,insuring the level oflift of farms who lost their land by building their records.