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Rigidity with partial elasticity: Local government adaptation under the centralized land quota system in China

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  • Zhou, Tianxiao
  • Tan, Rong
  • Shu, Xianfan

Abstract

Under the rigid centralized land quota system in China, local governments actively adopt various strategies to achieve economic growth. This paper describes and evaluates a new local decentralized strategy in China called the flexible quota system, which is used to satisfy the land use requirements of key and uncertain projects. Using Zhejiang Province as an example, we find that the innovative aspect of this flexible quota system is that the upper-level government reserves a share of quotas for overall decision-making, and sub-level governments competitively apply for quotas based on project importance. Through the above mechanism, the flexible quota system smoothly guarantees unforeseeable land use arrangements in key projects and improves the overall land quota allocation performance. Furthermore, data from scenario simulations show that compared with the original system, this flexible quota system has a greater net benefit in land development and is almost twice as successful in dealing with land use for uncertain key projects. The paper may provide new knowledge for local innovation in land planning under the traditional centralized system.

Suggested Citation

  • Zhou, Tianxiao & Tan, Rong & Shu, Xianfan, 2022. "Rigidity with partial elasticity: Local government adaptation under the centralized land quota system in China," Land Use Policy, Elsevier, vol. 118(C).
    • Handle: RePEc:eee:lauspo:v:118:y:2022:i:c:s026483772200165x
    DOI: 10.1016/j.landusepol.2022.106138
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