The impact of anti-corruption measures on land supply and the associated implications: The case of China. (June 2020)

• Record Type: Journal Article
• Authors: Zhao, Renjie; Chen, Jie; Feng, Chen; Zhong, Shihu
• Is Part Of: Land use policy. Volume 95(2020)
• Publication Date: 2020-06
• Subjects: H11 -- P26 -- P28; Anti-corruption -- Local government -- Land supply -- China -- Public governance; Land use -- Periodicals; Land use -- Government policy -- Periodicals; Sol, Utilisation du -- Périodiques; Sol, Utilisation du -- Politique gouvernementale -- Périodiques; Electronic journals; 333.7305
• DOI: 10.1016/j.landusepol.2020.104605
• Languages: English
• ISSNs: 0264-8377

Abstract

Highlights: This paper analyzes how land supply response to the ousting of local key officials in urban China due to corruption prosecution. Corruption crackdown is used as the exogenous shock to identify the relationship corruption and land supply. Both the volume and value of land sales dropped significantly after the local officials' ousting. The supply of commercial and residential land dropped but the supply of land for public use increased. The marketization level of land supply increased and cheap transfer of industrial land became less. The heterogeneity of the effect was investigated, and the long-term persistence of this effect was confirmed. Abstract: The allocation of land resources is a crucial issue in sustainable urban development, but it is subject to the vagaries of public governance. By using the prosecution of corrupt local leaders as the shock event, and exploring the data on sacked officials and land transfers in prefecture-level cities in China from 2006 to 2016, we analyse the changes in the supply of land in response to the ousting of key local officials for corruption. The estimations derived through the identification strategy of the DID framework show that both the volume and value of land sales dropped significantly after the local officials' ousting, with the value of total land sales reacting to a much greater extent. We also found the reduction of land supply was mainly from commercial and residential land but a greater supply of land for public use following the local leaders' ousting, accompanied with an increase in the level of marketisation in the supply of land and a reduction in cheap transfers of industrial land. In addition, the heterogeneity of the effect across the rank and type of official was investigated, and the long-term persistence of this effect was confirmed. By showing that anti-corruption measures have a persistent disciplinary effect on officials' subsequent land supply strategy, this paper underscores that the quality of public governance profoundly influences the functioning of the land market.