Decentralization Dividends: Can Expanding Land Approval Autonomy Improve the Quality and Scale of Urban Land Use Efficiency?

According to the Sustainable Development Goals (SDGs), lower land use efficiency may pose challenges to achieving sustainable development. We exploit the reform of the construction land approval authority in China, which grants local governments greater autonomy in land use decisions. Using large‐scale socioeconomic, land transfer, and nighttime light data, we constructed two complementary indicators to measure the quality and scale of urban land use efficiency (ULUE): land output efficiency (LOE) and land scale efficiency (LSE). We draw the following main conclusions: expanded autonomy in land approval significantly improves ULUE. The policy effects of the reform on different types of ULUE vary in cities with different levels of land demand, land marketization development, and industrial agglomeration. The reform primarily improves ULUE, especially LOE, by reshaping land allocation strategies that promote the use of stock land and increase land value, and by encouraging industrial development strategies that facilitate the growth of producer services and digital industries. These findings highlight the importance of administrative decentralization and land approval reforms in shaping land allocation and suggest that policymakers should carefully consider how relaxing land regulations influences local government decisions.