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Rethinking China's underurbanization: An evaluation of its county-to-city upgrading policy

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  • Fan, Shenggen
  • Li, Lixing
  • Zhang, Xiaobo

Abstract

"It has been argued in the literature that China is underurbanized in large part because of restrictions on migration. While the presence of migration barriers can help explain why existing cities fail to achieve their optimal size, it cannot explain the lack of cities. Although migration has become much easier over time, the number of cities in China has been rather stagnant. In this paper, we argue that lack of appropriate mechanisms for creating new cities is another reason for underurbanization. Under China's hierarchical governance structure, the only way to create new cities is through the centralized policy of upgrading existing counties or prefectures into cities. However, in practice the implementation of the county-to-city upgrading policy was more complicated than expected. Based on a county-level panel dataset, this paper shows that jurisdictions that were upgraded to cities prior to 1998 do not perform better relative to their counterparts that remain to be counties in terms of both economic growth and providing public services. The policy was retracted in 1997, freezing the number of county-level cities since then. This, in turn, contributes to the observed underurbanization." from authors' abstract

Suggested Citation

  • Fan, Shenggen & Li, Lixing & Zhang, Xiaobo, 2009. "Rethinking China's underurbanization: An evaluation of its county-to-city upgrading policy," IFPRI discussion papers 875, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:875
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    File URL: http://www.ifpri.org/sites/default/files/publications/ifpridp00875.pdf
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    Cited by:

    1. Han, Li & Kung, James Kai-Sing, 2015. "Fiscal incentives and policy choices of local governments: Evidence from China," Journal of Development Economics, Elsevier, vol. 116(C), pages 89-104.

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    Keywords

    Urbanization; City creation; Governance structure; Political centralization; Development strategies;

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