Free land, heavy burden: Industrial land administrative allocation and local fiscal imbalance in China

Using data from 285 Chinese cities for the years 2005–2018, this study analyzes the relationship between industrial land administrative allocation and local government fiscal imbalance in China. We find that the administrative allocation of industrial land significantly increases excessive fiscal ex...

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Bibliographic Details
Published in:Economics and politics 2024-03, Vol.36 (1), p.312-333
Main Authors: Huang, Bo, Li, Haitong, Lei, Jinghua, Wang, Yiqian
Format: Article
Language:English
Subjects:
administrative allocation
Allocation
China
Cities
excess fiscal expenditure
Expenditures
fiscal Imbalance
Imbalance
industrial land
Land
land policy
Local government
Public debt
Public finance
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Summary:Using data from 285 Chinese cities for the years 2005–2018, this study analyzes the relationship between industrial land administrative allocation and local government fiscal imbalance in China. We find that the administrative allocation of industrial land significantly increases excessive fiscal expenditures and exacerbated fiscal imbalances. The increases in relevant government investment and transportation construction cost are the mechanisms by which industrial land administrative allocation aggravate government's financial imbalance. Further analysis indicates that land administrative allocation in medium cities, highly industrialized cities, and highly marketized cities have more significant impacts on local government' fiscal excess expenditures and deficits.
ISSN:0954-1985
1468-0343
DOI:10.1111/ecpo.12239