Thisprovision,intendedtorestrictpartialrepossessionoflandbythelandowner,wasapparentlydraftedfromthebriefexperienceofsharerestrictionconductedearlierinmainlandChina.However,thepromisedlimitationwasnotimposeduntiltheLand-to-the-Tillerprogrambeganin1953.Furthermore,when,inApril1949,thegovernmenturgedtherenegotiationofcontractstolowerrentalpercentagesthelandownerscouldhavereducedlandsizefortenantfarmsatwill.Finally,thelandownercouldincreasetenantinputswithoutreducinglandsizetoattainthesameresult.
Toconclude,itisevidentthatthetheoryofsharetenancyimpliesincreasedfarmingintensityasaresultofthesharerestriction'sbeingenforcedin1949.Becauseofthenewlegislation'singintoeffectin1952,thehypothesistestinginthefollowingchapterswillbeconfinedmainlytofouryears.Theyear1948willbeusedasthebaseyearbeforethelegalshareconstraint,andthethreeyearsfrom1949to1951willrepresenttheyearsafter.Itisinthesethreeyearsthattheenforcementofthesharerestrictionwasstrongandevident,thatpensatingpaymentsandrighttransfersdidnottakeplacetoanysignificantextenttorestoretheinitialresourceuseunderfarmtenancy,andthatwearecertainthatadjustmentsoffarmingintensitywerenotrestricted.
[1].Withoutpensatingpaymentsorotherdevicessuchaslicensingtherighttoleaseland,theequilibriumofthisfixedrentcontrolwouldbeunclear;andthepossibleouteswouldbeseveralandsovariedthatwecouldbecertainofnone.
[2].SeeSidneyKlein,ThePatternofLandTenureReforminEastAsiaafterWorldWarII(NewYork:BookmanAssociates,1958),p.77.
[3].SeeChengChen,AnApproachtoChina'sLandReform(Taipei:ChengChungBookCompany,1951),pp.24-25.
[4].SeeSino-AmericanJointCommissiononRuralReconstruction,"JCRRAnnualReportsonLandReformintheRepublicofChina,"mimeographed(Taipei:Farmers'ServiceDivision,1965),p.9.Italicsadded.SeealsoJCRR,GeneralReport,vols.1and2(Taipei:1950and1952).
[5].Seechapter5ofthisstudy.
[6].Art.2,inHui-sunTang,LandReforminFreeChina(Taipei:JCRR,1954),p.221.InTang'stranslation,oneerrorofsubstancehasbeenfoundandcorrectedbythepresentauthor,thatis,"maincrop"shouldread"maincrops."InChinese,whentheexactnumberisnotspecified,pluralisimplied,andthereisnonumericalspecificationintheoriginalversion.Aswillbeeclearlater,thelawmakermeanttosayone"main"cropperacreoflandperperiodoftime.
[7].SeeJCRR,"AnnualReports,"p.20-26.
[8].Chen,AnApproachtoChina'sLandReform,p.14.Inothersourcesitisevidentthattheprocedureof"reporting"theactualyieldwasfrequentlyomittedifsharedisputesdidnotarise.
[9].Seechapter5ofthisstudy.
[10].Perhapsthetranslationfromthecrops"chieflywanted"to"main"issomewhatmisleading.
[11].ChengChen,RecordsofTaiwanLandReform(Taipei:ChungHwaBookCompany,1961),p.181.
[12].SeeChen,AnApproachtoChina'sLandReform,p.29.
[13].SeeChengChen,LandReforminTaiwan(Taipei:ChinaPublishingCo.,1961),p.309.
[14].Art.2,inTang,LandReforminFreeChina,p.222.Notethatthisarticlewaslaterdeletedintheactof1951.
D.ADigressiononPropertyRightAssignmentandResourceAllocation
InthissectionIseektodiscussmorefundamentallythetheoreticalresultsoftherentalsharerestrictionintermsofpropertyrights.
Letmeintroduceanoperationalconceptforthepresentdiscussion:anindividual'srighttousearesourceexclusivelyandhisrighttoderiveunattenuatedine(orrentalannuity)fromtheusearemutuallyimplied.Inotherwords,givenanexclusiverighttousearesource(thatis,thepropertyrightheldbyanindividualisindependentofotherpeople'saction),therighttoderiveinetherefromisalsoexclusive."Ine"ishereusedasaprehensivetermtoincludetheflowsofbothpecuniaryandnonpecuniarybenefits.Transferabilityofthepropertyrightinthemarketplaceisessentialinordertorealizethemaximumvalueoftheresource.Assumeawaytransactioncostproblems,andpetitionfortheownershiprightwillrevealthatmaximumvalue.
Anattenuationoftherighttoobtaininefromaprivatepropertyresourcebyalegalauthoritymaybeenforcedonapercentagebasisoronafixedpricebasis.Inthelattercase,availableeconomictheoryyieldsanequilibrium(andhenceasetofpredictablebehaviorwithrespecttoresourceuse)onlyifthereareotherassociateddevicessuchaslicensingorrationing.Ontheotherhand,ineattenuationonapercentagebasisusuallyyieldsaspecifiablesetofconstraintswhichpermitsatheoreticalsolution,becausethedimensionsrestrictedallowchangesinchoicesamongoptionspredictablebythetheoryofchoice.
Attenuatingtherighttoderiveinefromresourceuseonapercentagebasis,withthediminishingportionofineunappropriatedandunassignedtosomespecificindividual(s),willproducethesameeffectsasattenuatingtheexclusiverighttousetheresource.[1]ConsidertherentalsharerestrictioninTaiwan.Underafreemarket,alandownerisentitledtoreceiveaportion,r,oftheannualyieldasineforhisexclusiverightovertheuseofhisland.Undertheshareconstraint,
,andwithoutinputadjustment,thelandowner'sinefromhisresourceownershipisreducedby(r—
)/rpercent.Weask:towhomisassignedtherighttocollectthisportionofrent,thatis,(r—
)/rpercentoftherentunderafreemarket?InasmuchaswecaninterprettheexistingprovisionsandenforcementoflawinTaiwan,underthesharerestrictiontherighttothisportionwasnotassignedexclusivelytoanindividualtenant.Thisunassignedportionofinefromlandbecamearesidual,andallpotentialtenantswereallowedtopeteforit.
Consideranalternative.If,underthesharerestriction,the(r—