IDEAS home Printed from
   My bibliography  Save this paper

Local Officials as Land Developers: Urban Spatial Expansion in China


  • Lichtenberg, Erik
  • Ding, Chengri


We investigate conceptually and empirically the role of economic incentives in the primary land allocation in China in recent years. A theoretical analysis demonstrates how recent fiscal and governance reforms give rise to land conversion decisions and long run urban spatial sizes much like those generated by competitive land markets with private land ownership. An econometric investigation of Shanghai and the provinces surrounding it demonstrates the presence of rent gradients, often used as an indication of the presence of land markets. It thus appears that economic forces have continued to exercise dominant influence over primary land allocations in spite of recent administrative restrictions on land conversion. These rent gradients are strongest in the most economically developed portions of the study region and weakest in the least economically developed. Urban land values exceed agricultural land values by a considerable margin, suggesting that rates of urbanization will continue to be rapid. The estimated rent gradients also suggest that much of this region will eventually become completely urbanized.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:umdrwp:6834

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    2. Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
    3. F. Deng, 2005. "Public land leasing and the changing roles of local government in urban china," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(2), pages 353-373, June.
    4. Zhihua Zhang & Jorge Martinez-Vazquez, 2003. "The System of Equalization Transfers in China," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0312, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. 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.
    6. Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
    7. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
    8. Peterson, George E., 2006. "Land leasing and land sale as an infrastructure-financing option," Policy Research Working Paper Series 4043, The World Bank.
    9. Hartwick, John M. & Van Long, Ngo & Tian, Huilan, 2001. "Deforestation and Development in a Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 235-251, May.
    10. 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.
    11. F Wu, 1998. "Polycentric urban development and land-use change in a transitional economy: the case of Guangzhou," Environment and Planning A, Pion Ltd, London, vol. 30(6), pages 1077-1100, June.
    12. F Wu, 1998. "Polycentric Urban Development and Land-Use Change in a Transitional Economy: The Case of Guangzhou," Environment and Planning A, , vol. 30(6), pages 1077-1100, June.
    13. 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.
    14. Zhang, Tao & Zou, Heng-fu, 1998. "Fiscal decentralization, public spending, and economic growth in China," Journal of Public Economics, Elsevier, vol. 67(2), pages 221-240, February.
    15. 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.
    16. Bertaud, Alain & Renaud, Bertrand, 1997. "Socialist Cities without Land Markets," Journal of Urban Economics, Elsevier, vol. 41(1), pages 137-151, January.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Community/Rural/Urban Development; Land Economics/Use; R5; R14; H11; O18;

    JEL classification:

    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:umdrwp:6834. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.