Public land sales and the political cycle in China

Hao Liu, Xiao-Hang Guo, Li-Chen Chou, Helen Cai and Xi-Xi Ye

Economic Research-Ekonomska Istraživanja, 2023, vol. 36, issue 3, 2288127

Abstract: This study analyzed the influence of the political cycle on public land transfer. In this paper, the Party Congress is taken as a political cycle, and we construct a model to discuss the relationship between public land sales and the political cycle. The empirical analysis is based on the land transfer panel data of prefecture-level cities from 2002 to 2018. The main results show that the land transfer area and land transfer income show a downward trend in the early stage of the Party Congress, while the land transfer area and land transfer income show an upward trend after the Party Congress. We believe that the political cycle has a significant impact on the supply of public land. The reason is that the political uncertainty in the early stage of the Party Congress is very high, and the impact of the land transfer on tax revenue and economic growth lags behind. Officials reduce the valuation of future income and thus reduce land transfer. As political uncertainty abated after the party congress, local officials joined the promotion race, offering land to attract investment and boost economic growth.

Date: 2023
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DOI: 10.1080/1331677X.2023.2288127

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