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| Farmers’ Resistance, the Punitive Policies and Intertemporal Choice of Local Government: the Contest in Homestead Expropriation |
| SUN Qiu-peng |
| Institute of Marxism, Chinese Academy of Social Sciences, Beijing, 100732 |
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Abstract When homesteads, especially suburban homesteads, are used for urban construction, their values increase significantly. To obtain the huge land value increment, local governments and farmers engage in fierce contests. The strategies adopted by local governments and farmers not only influence the benefit distribution of all parties involved, but also the amount of homestead expropriation and the conversion of rural construction land into urban construction land, thus affecting the efficiency of land resource allocation and social welfare. Analysis of the contests between local governments and farmers shows that when farmers are cooperative with local governments, local governments take advantage of their monopoly position in the market to gain huge benefits, while farmers do not share land value increment. When farmers resist, local governments reduce the amount of homestead expropriation. How strong the farmers’ resistance is depends on the difference between the land acquisition price and the transfer price, and the extent to which the local government’s punishment increases the cost of farmers. In the future, the higher the demand in the land market, the higher the discount rate will be, and the more inclined local governments are to hoard land in advance. The higher the financing cost, the more inclined local governments are to reduce the amount of land hoarded, or even not to hoard land.
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Received: 13 May 2020
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2020, Vol. 37 
