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Balancing Act: Economic Incentives, Administrative Restrictions, And Urban Land Expansion In China

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  • Feng, Juan
  • Lichtenberg, Erik
  • Ding, Chengri

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 no effect on rates of farmland loss but did limit urban spatial growth rates in some regions. Our econometric evidence suggests very limited enforcement of those legal limits on farmland conversion.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 149669.

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Date of creation: 2013
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Handle: RePEc:ags:aaea13:149669

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Keywords: China; urbanization; land development; farmland conversion; land use; decentralization; fiscal federalism; Community/Rural/Urban Development; International Development; Land Economics/Use; Public Economics; R52; R14; Q15; H77;

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  1. Xiangzheng Deng & Jikun Huang & Scott Rozelle & Emi Uchida, 2010. "Economic Growth and the Expansion of Urban Land in China," Urban Studies, Urban Studies Journal Limited, vol. 47(4), pages 813-843, April.
  2. Hehui Jin & Yingyi Qian & Barry Weingast, 1999. "Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style," Working Papers 99013, Stanford University, Department of Economics.
  3. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
  4. Yuming Fu & Tsur Somerville & Mengdi Gu & Tongcheng Huang, 1999. "Land Use Rights, Government Land Supply, and the Pattern of Redevelopment in Shanghai," International Real Estate Review, Asian Real Estate Society, vol. 2(1), pages 49-78.
  5. Christopher F Baum, 2001. "Residual diagnostics for cross-section time series regression models," Stata Journal, StataCorp LP, vol. 1(1), pages 101-104, November.
  6. Deng, Xiangzheng & Huang, Jikun & Rozelle, Scott & Uchida, Emi, 2008. "Growth, population and industrialization, and urban land expansion of China," Journal of Urban Economics, Elsevier, vol. 63(1), pages 96-115, January.
  7. Richard Podpiera, 2006. "Progress in China'S Banking Sector Reform," IMF Working Papers 06/71, International Monetary Fund.
  8. Hongbin Cai & J. Vernon Henderson & Qinghua Zhang, 2013. "China's land market auctions: evidence of corruption?," RAND Journal of Economics, RAND Corporation, vol. 44(3), pages 488-521, 09.
  9. Lichtenberg, Erik & Ding, Chengri, 2008. "Local Officials as Land Developers: Urban Spatial Expansion in China," Working Papers 6834, University of Maryland, Department of Agricultural and Resource Economics.
  10. Head, Keith & Ries, John, 1996. "Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive Areas," Journal of Urban Economics, Elsevier, vol. 40(1), pages 38-60, July.
  11. World Bank, 2011. "World Development Indicators 2011," World Bank Publications, The World Bank, number 2315, October.
  12. Chengri Ding & Erik Lichtenberg, 2011. "Land And Urban Economic Growth In China," Journal of Regional Science, Wiley Blackwell, vol. 51(2), pages 299-317, 05.
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