Grassland tenure in China: an economic analysis

The primary purpose of this paper is to make a contribution towards extending the coverage of this cropland tenure literature to China's extensive grasslands, which comprise some 40% of its territory.

The article finds that:

• there are two unique characteristics of grassland tenure in this territory: group tenure arrangements and 'fuzzy' boundaries
• in conventional microeconomic analysis, both of these characteristics raise efficiency concerns
• these concerns are only partly justified. By using a new institutional economics perspective and giving due consideration to the nature of resource endowments and the economic environment, 'hidden benefits' of group tenure and fuzzy boundaries are revealed
• benefits include facilitating the realization of economies of size with respect to herding labour, equitable household access to resources, and insurance against economic risk
• Chinese cropland tenure also facilitates the latter two, it does this through different tenure mechanisms and this reaffirms the role of natural resource endowments in shaping institutional arrangements