Conference Agenda

This article investigates the unintended consequences of land use right restrictions on deforestation in Vietnam, shedding light on a crucial yet underexplored aspect of land tenure rights that applies to several contexts. While an extensive literature studies the economic and environmental impacts of tenure security and transfer rights, limited attention has been given to government-imposed restrictions on land use rights. The objective of this study is to understand how land use right restrictions affect the opportunity cost of forest clearing. The study focuses on Vietnam, where a significant portion of agricultural land is compulsorily dedicated to rice cultivation under the Rice Land Designation Policy (RLDP). This policy, enforced at the local level, sets specific targets for rice cultivation, effectively restricting land use rights. The analysis takes advantage of a unique two-wave panel dataset on land use at the commune level, obtained by merging two Vietnam rural censuses covering 56 million individuals with geospatial information on tree cover loss, and geospatial information on the exact land designed to be cultivated under rice according to the RLDP. Our findings reveal a strong nexus between cropland expansion and tree cover loss, with the relationship being more pronounced in communes subject to land use constraints imposed by RLDP. When cropland expansion occurs in areas with land use restrictions, the impact on tree cover loss is significantly higher. Access to markets appears to mitigate the detrimental effect of cropland expansion under these restrictions, suggesting that economic opportunities in urban areas may deter farmers from expanding cropland at the expense of forests. With Vietnam experiencing substantial deforestation, this research provides insights that can inform policies aimed at reducing deforestation levels.