Balancing act: Economic incentives, administrative restrictions, and urban land expansion in China

Juan Feng, Erik Lichtenberg and Chengri Ding

China Economic Review, 2015, vol. 36, issue C, 184-197

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.

Keywords: Decentralization; Dynamic balance policy; Fiscal federalism; Land allocation; Farmland preservation (search for similar items in EconPapers)
JEL-codes: H77 O18 P35 Q15 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (16)

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Related works:
Working Paper: BALANCING ACT: ECONOMIC INCENTIVES, ADMINISTRATIVE RESTRICTIONS, AND URBAN LAND EXPANSION IN CHINA (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:36:y:2015:i:c:p:184-197

DOI: 10.1016/j.chieco.2015.09.004

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