Land-locked development: The local political economy of institutional change in China

Despite rapid economic growth, China has not embraced neoliberal economic prescriptions. Land reform is no exception: private land ownership continues to be outlawed; land use is restricted by administratively distributed land quotas; the land market (for transferring land use rights) is extremely segmented, with urban and rural land governed by significantly different systems of property rights. How has this land property rights regime impacted the political economy of development in China?;I argue that land property rights arrangements create new untapped revenue sources, motivating local politicians to expropriate rural land. This expropriation is constrained, however, by the land quota system, imposed by the central state to preserve shrinking arable land. Variation in land endowment, interacting with the level of local economic development, produces variation in the cost of fulfilling land quota requirements. This in turn induces revenue-maximizing local officials to develop new forms of land-centered development strategies. Local governments develop cooperative relationships with one another to facilitate transferring land quotas from localities with land abundance to localities with land scarcity; they rationally allocate land quotas across economic sectors; and they provide social welfare benefits to villagers, particularly those who lose land, to ease land expropriation. These new development strategies promote land use efficiency, despite public land ownership. Even so, they disproportionally benefit the state vis-a-vis villagers, motivating the former to resist reforms that promote private land ownership. Consequently, the local state's dependence on land to generate revenue and intervene in the economy persists, creating land-locked development.;I develop these arguments using a multiple-method strategy. Comparative case studies draw on in-depth political elite interviews and local government documents collected through substantial fieldwork. Statistical analysis exploits three datasets: the existing China Survey of individual households across China and two original datasets I constructed for samples of municipalities. Through an investigation of the relationship between land, revenues, and economic development strategies, this dissertation advances our understanding of Chinese political economy and challenges conventional wisdom that associates public ownership with inefficiency.