Property Rights, Land Values and Urban Development
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Property Rights, Land Values and Urban Development

Betterment and Compensation in China

Li Tian

This book presents an analysis of betterment and compensation issues under the Land Use Rights (LURs) System in China since 1988. The topic originates from the observation of widening inequity and increasing uncertainty associated with the failure of government to adequately address betterment and compensation issues. An analytical framework of institutions and property rights is employed to examine socio-economic impacts under the LURs system, in particular, the role of the state is analyzed to explore the effects of government intervention in land markets.
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Chapter 4: Assessing and addressing betterment and compensation: international experiences

Li Tian


Given the lack of experience of China in addressing betterment and compensation, it is highly desirable to gain an understanding of international experiences. The purposes of this chapter are to highlight some techniques adopted in other countries and to explore their potential applicability in China. In reading about national experiences from different countries, the author has been struck by the differences in national responses and the diversity of approaches. Britain has played the leading role in land value capture across the world, and it is well known for its volatile policies and various attempts to deal with compensation and betterment. While the whole emphasis of the Labour government was on preventing landowners benefiting from the ‘unearned increment’ in land by means of national taxes, the Conservative Party went to the other extreme and simply abolished them during the 1960s and 1970s (Hallett, 1985). In the USA, by the end of the 1960s, ‘unearned increment’seemed to arouse no concern at all, and correspondingly, no compensation was payable to owners whose property lost value as the result of a planning decision (Delafons, 1969).

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