Between Statism and Capitalism: Land Allocation in Chinese Cities

• In Event: Poster Session: Division 13 Politics of (former) Communist Societies

Abstract

How do authoritarian governments allocate land on their path toward modernization? Under what conditions do they grant land to their trusted partners for free and under what conditions do they prefer selling it in markets for capital? This paper aims to answer these questions by studying land allocation in Chinese cities, where local governments take charge of rezoning land from rural to urban areas and allocating land to users through administrative or market-oriented competition processes.

In an analysis of land allocation patterns in 294 prefectural-level, this paper finds that, contrary to the conventional wisdom about Chinese local governments as frantic land sellers, a substantial amount of land tiles were directly given away by administrative command, along with land sales through competitive market practices such as tenders and auctions which never constituted 50% of the total deals in the past decade. Meanwhile, local governments in more developed cities tend to be more statist, less inclined to market practices. Such tendency is also more salient when the mayor has stayed in office for a longer period and when a local government has fewer peers to compete with in its province.

The paper links this finding to the balance of bargaining power between the local state and market actors. Specifically, in cities where the fiscal strength of bureaucracy is strong and the power of officials is entrenched, local governments tend to increase their intervention. In cities where the state is relatively weak and capitalists have high exit ability, partly due to economic competition between cities, local governments have to rely more on market mechanism.

Author

• Jianzi He, The Ohio State University