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Determinants of Land Finance in China: A Study Based on Provincial‐level Panel Data (中国土地财政的决定因素：基于省级面板数据的研究)
Author(s) -
Ye 香港城市大学 Fangzhi,
Wang 印第安纳大学－普渡大学印第安纳波里斯联合分校 Wen
Publication year - 2013
Publication title -
australian journal of public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.524
H-Index - 41
eISSN - 1467-8500
pISSN - 0313-6647
DOI - 10.1111/1467-8500.12029
Subject(s) - china , revenue , finance , panel data , public finance , exploit , economics , politics , business , economic policy , macroeconomics , political science , computer security , computer science , law , econometrics
Tapping land values to raise extra‐budgetary funds for local coffers has been a prominent fiscal phenomenon in many developing countries. This article, based on a provincial‐level panel dataset for the period 1999‐2009, examines the factors behind Chinese local governments’ reliance on land finance. Our analysis shows that intergovernmental fiscal arrangements, such as the central‐provincial fiscal imbalance, and the lack of adequate revenue capacity of sub‐provincial governments, have encouraged local governments to exploit land leasing. There is also evidence suggesting that political factors might have a significant impact on land finance arrangements, but these tentative results need further investigation. This research contributes to the body of literature on intergovernmental fiscal relations, and improves our understanding of the dynamics and complexity of land finance arrangements in China. Policy implications are drawn from this analysis for further reforms of land management and intergovernmental financing in China and other developing countries facing similar challenges .