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ID: 143368

Balancing act: economic incentives, administrative restrictions, and urban land expansion in China / Feng, Juan; Lichtenberg, Erik ; Ding, Chengri

Ding, Chengri	Article
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Summary/Abstract

We examine how the system of “federalism, Chinese style” functions in the context of land allocation. China's land laws give provision of land a central role in local officials' growth promotion strategies. Requisitions of farmland by local authorities have engendered significant rural unrest. In response, the central government has attempted to re-establish control over the pace of urban land expansion by enacting regulations limiting conversion of rural land to urban uses. We derive theoretically the conditions under which non-compliance with such regulations is optimal. An econometric investigation shows that legal restrictions on farmland conversion had little or no effect on rates of farmland loss but did limit urban spatial growth. Our econometric evidence is consistent with limited enforcement of those legal limits on farmland conversion.

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Decentralization ; Fiscal Federalism ; Dynamic Balance Policy ; Land Allocation ; Farmland Preservation

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ID: 136268

Spending preferences of local officials with off-budget land revenues of Chinese cities / Ding, Chengri; Niu, Yi ; Lichtenberg, Erik

Ding, Chengri	Article
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The paper examines the spending preferences of local governments on land revenues by developing an indirect approach in which public sector outcomes are regressed with land revenues, the most dominant source for off-budget incomes. By doing so, we are able to overcome the issue of unavailable itemized spending data on land revenues. The behavioral foundation of leading local officials on land revenues is that they may be treated as discretionary funds that will be spent on projects that can benefit local officials' political advancements. Thus it is hypothesized that Chinese local officials intend to channel land revenues more toward growth-oriented infrastructure such as urban roads, more toward image projects such as public squares and open space, and more toward projects that help to boost public impression of local economic success on which cadre evaluation weighs heavily. We test those hypotheses using a panel data of Chinese prefecture cities from 1999 to 2006. Econometric estimates confirm those hypotheses.

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