Land Finance And Supply Of Local Public Goods

In the context of the current system,local governments concurrently hold "dual identities",as both the suppliers of the primary market of land and the suppliers of public goods.By reviewing the facts and characteristics of related systems,this paper uses theoretical deduction and empirical methods to study the association mechanism between the two "identities".Since the reform of the tax sharing system in 1994,the local governments have assumed unmatched financial power and authority,which has been accompanied by two obvious changes in the fiscal structure of local governments.One is that at the end of fiscal revenue,the scale of land finance as extra-budgetary income has expanded rapidly to make up for the ever-increasing fiscal gap.The second is the end of fiscal expenditure.Local governments clearly attach importance to economic public goods and ignore the supply of non-economic public goods.Firstly,a series of feature facts point to the link between land finance and public goods supply of local government.After 1990,local government infrastructure construction began to advance by leaps and bounds,and local basic education investment fell about 10-15 years after the 1990s,and it was during the same period that the local government's land sales revenue grew at its fastest pace.Because land transfer payments are used in a large proportion for construction-type expenditures,and a large amount of infrastructure construction is capitalized into land to increase land transfer revenue,this constitutes a "positive feedback loop" for land financing and urban infrastructure.The concept of fiscal expenditure on "construction of extrabudgetary protection and budget protection"also made non-economic public goods such as education and medical care not benefit from the increase in local government revenue.In addition,the local government's land transfer strategy also has the difference between "creating wealth with land" and "inviting investment",and the heterogeneity of strategy may also affect its public goods supply preferences.Based on the panel empirical analysis of 287 prefecture-level cities from 2007 to 2015,it is shown that:Firstly,the expansion of land transfer scale has significantly increased the supply of infrastructure and reduced the supply of local basic education;secondly,the "investment promotion"type of transfer.The strategy will significantly enhance the local government's supply of infrastructure;Thirdly,if the local government's strategy is a mix of "creating wealth with the land"and "inviting investment," it will also use its two strategies:"high price" and "low price".The more adequate the level,the level of supply of basic education will increase.Robustness tests based on GMM estimation and measurement of transformation variables validate the robustness of the above conclusions.The innovations of this paper are:1)Perspective innovation,this paper cuts into the structural imbalance of fiscal expenditure from the novel perspective of land finance,and enriches the existing research;2)Data innovation,this paper adopts the micro-data aggregation of China's land market network.The resulting dataset makes the research in this paper have a solid microscopic foundation;3)The depth of the development,the paper further examines the impact of heterogeneous land transfer strategies on the supply of public goods.