The Study On The Effect Of The Chinese Style Decentralization On Local Government Behaviors Of Land Granting

Chinese style decentralization, which combining the fiscal decentralization and the political centralization, is considered as the one of the most important reasons for local government promoting economic growth:Central government induced local governments to increase incomes and share fruits of economic growth through fiscal decentralization while forcing local governments to compete for economic growth trough political centralization. Meanwhile, Chinese style decentralization influenced local government behaviors of land granting:on the one hand, local governments raised local finance by land granting; on the other hand, local governments sold industrial land at a low price to compete for capitals and FDIs, and sold commercial and residential land at a high price to maximize the land granting fee by means of unsaturated land supply and land auctions and bids. The phenomena above were summarized as land finance and deviation of land granting price.Against on such background, this paper will analyze behaviors logistics of local government under the influence of fiscal decentralization and political centralization, and make an empirical research on Jiangsu, Zhejiang and Shanghai, which will reveal the deep reason of land finance and deviation of land granting price. The construction of paper is as follows:Firstly, based on the review of interrelated literature at home and abroad, this paper will conclude incentive mechanism of local government under Chinese style decentralization and institutional reasons of land finance and price deviation, to form a framework which describes logical relationship of local governments’ behaviors of land granting under fiscal decentralization and political centralization.Secondly, this paper will separately demonstrate function mechanism of local government behaviors of land granting under fiscal decentralization and political centralization, and then summarize the conclusion that land finance and deviation of land granting price are the best strategy for local government. Thirdly, this paper will make an empirical analysis with panel data from Jiangsu, Zhejiang and Shanghai province, such results are concluded:Fiscal decentralization expanded the scale of land finance and had positive effect on deviation of industrial and commercial and residential land price; political centralization had negative effect on deviation of industrial land price and positive effect on deviation of commercial and residential land price, which caused more dependence on land finance.Finally, based on basis of analysis above, such workable policy recommendations are conclude:promote farmland rights institutions; launch financial system and political performance evaluation system reform; strengthen the regulation and monitoring of land granting.