Land Primary Market Monopoly and the Provision of Local Public Goods
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| Title | Land Primary Market Monopoly and the Provision of Local Public Goods
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| Author | Zuo Xiang Yin Xingmin |
| Organization | Shanghai Institute of Foreign Trade,CCES Fudan University; |
| Email | david067@live.cn,zuoxiang@shift.edu.cn |
| Key Words | Land primary market monopoly; Economic public goods; Non-economic public goods |
| Abstract | Under current institution system, local government is not only the provider of public goods, but also a monopoly of the land transaction market and the "entrepreneur" running the state-owned land. This paper studies the impact of "Land Finance" on the provision of local public goods. We build a simple model showing that despite controlling more land resources will relax the financial constraints, it also increases the marginal revenue of economic public goods and opportunity cost of non-economic public goods, local governments will invest more financial resources to the economic public goods which can increase land value and future fiscal revenue, education, health and other public services is not necessarily beneficiaries of well-off fiscal income. Using the 282 city-level panel data from 2003 to 2008, we found that local governments controlling more land will decrease economic public goods provision significantly. Therefore, factor market reform and the formal management of land value increment is important to improve local public services. |
| Serial Number | WP201 |
| Time | 2012-02-15 |
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