Promotion incentives for local officials and the expansion of urban construction land in China: Using the Yangtze River Delta as a case study

Land Use Policy 63 (2017) 214–225

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Land Use Policy journal homepage: www.elsevier.com/locate/landusepol

Promotion incentives for local officials and the expansion of urban construction land in China: Using the Yangtze River Delta as a case study Zhigang Chen a,b , Jing Tang a , Jiayu Wan a , Yi Chen a,b,∗ a b

School of Geographic and Oceanographic Sciences, Nanjing University, 163 Xianlin Avenue, Nanjing 210023, China Key Laboratory of Coastal Zone Exploitation and Protection, Ministry of Land & Resources of China, 58 Shuiximeng Road, Nanjing 210017, China

a r t i c l e

i n f o

Article history: Received 25 November 2016 Received in revised form 26 January 2017 Accepted 26 January 2017 Keywords: Promotion incentive Local officials Urban expansion Construction land China

a b s t r a c t China’s promotion incentive is the main motivation behind local officials’ decisions regarding the expansion of urban construction land, and is therefore crucial to understanding the mechanism behind the expansion of urban construction land. This paper discusses the promotion incentive’s theoretical influence on urban construction land expansion. Then, using 25 cities in the Yangtze River Delta region (including Shanghai and prefecture-level cities in the provinces of Jiangsu and Zhejiang) as samples, we estimate two econometric models that reflect the relationship between local officials’ characteristics and changes in the scale and efficiency of urban construction land to test the specific influence of different local officials on the expansion of urban construction land when driven by the promotion incentive. Our results show that the promotion sources of local officials and their terms in office significantly impact changes in the urban construction land scale and utilization efficiency. We also found that the ages of local officials significantly impact the efficiency of urban construction land use, but have an insignificant impact on the expansion of urban construction land. Considering China’s unique administrative system, the promotion incentive has a definite but divergent influence on mayors and municipal party secretaries regarding urban expansion. This paper concludes with policy proposals to improve the administrative management system and regulation on urban construction land expansion. © 2017 Elsevier Ltd. All rights reserved.

1. Introduction The rapid urbanization of China has become a worldwide research topic, spanning an extensive range of issues (Hsing, 2010; Wei and Ye, 2014; Bai et al., 2014). In the last 30 years, China’s urbanization rate (the proportion of urban residents to total population) increased from 23.01% in 1984 to 54.77% in 2014, an average increase of about one percentage point per year (NBSC, 2015). This continuous urbanization is clearly accompanied by a rapid expansion in urban construction land (Huang et al., 2015). According to the China City Statistical Yearbook, in 1984, the total construction land area in 295 cities across China was only 8,842 km2 (less than 30 km2 per city). However, by 2014, the number of cities had increased to 653 and the construction land area to 39,478 km2 (an average of over 60 km2 per city) (NBSC-USEID, 1986

∗ Corresponding author at: School of Geographic and Oceanographic Sciences, Nanjing University, 163 Xianlin Avenue, Nanjing 210023, China. E-mail addresses: [email protected] (Z. Chen), [email protected] (Y. Chen). http://dx.doi.org/10.1016/j.landusepol.2017.01.034 0264-8377/© 2017 Elsevier Ltd. All rights reserved.

and 2000–2015), indicating an annual growth rate as high as 16.3% (MURCEP-BF, 1985; MOHURDC, 2014–2015). It is widely recognized that land urbanization is much faster than population urbanization in China’s urbanization process (Liu et al., 2014). That said, it is odd that as a large number of rural residents have moved to cities over the past few years, both urban and rural construction land have increased (Tan and Li, 2013). China is a country with a large population but less arable land. As such, urbanization has raised a greater threat to food security and the ecological environment (Tan et al., 2005; Xie et al., 2015). This phenomenon is more prevalent in economically developed areas like the Yangtze River Delta. According to the official data, construction land in the two provinces and one city (Jiangsu Province, Zhejiang Province, and Shanghai) that make up the Yangtze River Delta accounted for more than 17% of the total land area in 2014, compared to only 13% 10 years ago (MLRC, 2016). It has been a major and pressing challenge for the Chinese government to effectively control the expansion of urban construction land, provide reasonable guidelines for urbanization, and improve the efficiency of urban construction land use.

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The key to a solution begins with an in-depth explanation of the trends and driving mechanisms of China’s recent expansion in urban construction land. Many scholars explored this, revealing the principal means of urban construction land expansion (Gao et al., 2013). These studies use remote sensing images or statistical data and deploy CA modeling, GIS technology, or statistical methods to explore the rate, intensity, spatial patterns, and evolution of Chinese urban construction land expansion (Xiao et al., 2006; Yue et al., 2013; Ye et al., 2013; Jiao, 2015; Tong and Hu, 2016). In general, research in this field investigates the expansion of urban construction land from the perspective of economic and social development and changes in institutional policies. It is generally accepted that the expansion of urban construction land in China is affected by economic growth, demographic changes, industrialization, industrial structure adjustments, and so on (Deng et al., 2008; Wu and Zhang, 2012; He et al., 2014). Regarding institutional policies, the development of the Chinese land market, land finance, taxation, and other factors are often deemed to play a significant role (Cao et al., 2008; Long et al., 2008; Chen et al., 2015). During China’s transitional stage, especially in the context of decentralization reform, local governments often regulate local economic developments by monopolizing the primary land market and setting limitations on the secondary land market. Land is not only a source of revenue for local governments, but also a major tool for attracting foreign investments and promoting economic growth (Lin and Ho, 2005; Tian and Ma, 2009; Tao et al., 2010; Ding and Lichtenberg, 2011; Huang et al., 2015). It can be concluded that previous research has provided enough theory and empirical evidence to understand the current rules of urban construction land expansion and its internal mechanisms. However, given China’s current transitional period, these are very complex issues and the motivations behind the expansion are more than superficial. We believe that population growth and economic development, for example, are only external factors driving the expansion of urban construction land and that the influence of local governments in light of these factors may be more important. The governance of Chinese cities dictates that local officials have a dominant influence in decision making regarding urban land development and utilization policies (Ding and Lichtenberg, 2011). They are therefore likely to establish these policies to further their own interests and career development. In China, the occupational development of local officials is generally confined to the administrative system, and it is difficult for them to seek better ways for development. In the pyramid-type bureaucracy organization of the cadre system, career development is usually equivalent to promotion to a higher position (Xu and Wang, 2011). Therefore, aspiring for promotions is one of the interests local officials pay the most attention to. To realize this objective, they usually cater to the preferences of and execute various commands of their superior government, referred to as the promotion incentive. It is therefore essential to systematically explore how the expansion of urban construction land is driven by local officials’ incentives towards promotion. The structure of this paper is as follows: In the second section of this paper, we provide a general introduction to and analysis of the theoretical logic behind the relationship between the promotion incentive for local officials and the expansion of China’s urban construction land1 during this transitional period. We explore the

1 The “urban construction land” herein mainly indicates the area of various lands except for water areas and agricultural lands among those in urban areas. In accordance with the definition in the China Urban Construction Statistical Yearbook, urban construction land includes land for residence, land for administration and public services, land for commercial and business facilities, land for industries, land for logistics and warehousing, land for road and transportation, land for municipal utilities, and land for green spaces and squares.

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correlation between local officials’ characteristics and behavioral differences and the expansion of urban construction land, concluding with three research hypotheses. In the third section, based on the theoretical framework and research hypotheses from Section 2, we establish two econometric models that reflect changes in two areas, namely the change in scale and utilization efficiency2 of urban construction land in relation to various characteristics of local officials motivated by the promotion incentive. In the fourth section, we use 25 important cities in the Yangtze River Delta (including Shanghai and other prefecture-level cities in the Jiangsu and Zhejiang provinces), all of which are undergoing rapid urban development, as research samples to conduct an empirical test of our hypotheses and analysis. The final section presents our conclusions and policy implications. 2. Theoretical analysis and research hypotheses 2.1. Theoretical logic The “growth machine” theory, presented by Logan and Molotch in Urban Fortunes: The Political Economy of Place (2007), describes cities as machines for increasing wealth, with politicians the key operators. During the decision making process, local officials always account for the interests of the merchants who support them, since this also benefits them. It is well known that local officials and merchants are the main members of the coalition that makes up the urban growth machine. The growth machine theory not only reflects urban development under Western political systems, it also to a certain extent explains the driving mechanisms of urban construction land expansion in China. In addition to benefiting “people with common interests” (e.g., industrial investors, real estate developers, etc.) (Logan and Molotch, 2007), the promotion incentive for government officers plays an important role in local officials’ decision making, encouraging them to pursue their own interests. This is consistent with the hypothesis of the “public choice theory,” which regards government as a “self-interested economic individual” (Tullock et al., 2002). This paper employs the same hypothesis. Of course, unlike in Western governments, Chinese local officials are more likely to be held “accountable to higher authorities,” rather than voter appeal. Although China’s economy has transformed from a centrally planned system to a market economy, the administration continues to operate under a top-down control model (Mertha, 2005). The appointment and promotion of local officials is still at the absolute discretion of higher-level government entities, which usually approve the political promotion of local officials based on an assessment in which economic performance plays a main role—the so-called “promotion tournament” (Bake et al., 1988; Yao and Zhang, 2013). It should be said that this system is an outcome of the combination of China’s traditional “centralism” and the objective of “taking economic construction as the center” since the reform and opening up (Xu et al., 2007). In the traditional centralized system, the superior has the right to decide the appointment and demission of inferior officials, and decides whether to promote inferior officials based on a set of assessment systems they developed. Therefore, considering their own career development, inferior officials pay much attention to the superior’s assessment and evaluation of them (Xu and Wang, 2011). After China’s development strategy turned to “taking economic construction as the center” since the 1980s, local economic performance has become a

2 Utilization efficiency (or land use efficiency) in this study is a concept in a narrow sense, indicating the economic output of urban construction land, and represented by “the GDP per urban construction land of research areas” in the model estimation section of this paper.

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preferential requirement and key point in the assessment of the superior government. According to a questionnaire on some of China’s prefecture-level leaders and cadres, among the detailed factors affecting job promotion, “administrative achievement” is listed as a prior factor (Xie and Qing, 1999). The Regulations on the Selection and Appointment of the Communist Party and Government Leaders and Cadres of China mentions multiple times that more attention will be focused on actual achievements among the basic conditions that the party and government leaders and cadres should meet. Therefore, under this system, economic development is generally prioritized and economic indicators (especially economic growth, investment attracted, and fiscal revenues, for example) are predominant factors (Liu et al., 2012). This system produces local officials who focus on economic growth and increasing fiscal revenue during their terms in office. Many relevant studies reveal that in contemporary China, local governments act as a land developer or build professional growth coalitions with enterprises, developers, and others for the purpose of economic development. The expansion of urban construction land provides opportunities for such officials to succeed in political performance assessments and thus acquire more opportunities for promotion (Lichtenberg and Ding, 2009; Han, 2010; Huang et al., 2015; Lin et al., 2015). Under China’s present model, wherein local economic development relies on investment, attracting more investors is a crucial part of economic development, especially to enhance GDP growth. Furthermore, foreign investments stimulate industrial development, which can also provide a stable source of revenue. Therefore, local governments at all levels often compete to lease land to attract more capital investment, even providing investors with land at low prices (Liu et al., 2008). The higher a city’s administrative level, the faster the construction land expansion (Li et al., 2015). Moreover, local officials at the city or county level often have more opportunities for promotion than those at the township level, and might pass their expansion goals to subordinate governments, who in turn attempt to attract investment by lowering land prices and over-transforming agricultural land (Yang and Wang, 2008). Excessive urban construction, pervasive “development zones,” and image projects are important means for local governments to attract foreign investment (Yew, 2012), which also leads to an excessive expansion of urban construction land. On the other hand, decentralization reform increases local governments’ reliance on land finance in cases where local governments centralize financial power but decentralize authority (i.e., the central government levies more major taxes while local governments take on more public service responsibilities). This means that local governments have to rely on leasing land for more revenue (Tsui and Wang, 2004; Deng, 2005; Su et al., 2012; Jia et al., 2014). The Provisional Management Regulations on Revenue Generated by Leasing State-owned Land Use Rights (1989) states that the lease of stateowned land must be paid to all levels of the financial department. Land lease transaction payments are shared by the central and local governments as follows: 20% must be used for urban land development and construction costs and of the balance, 40% of the rest is paid to the central finance department while the local government retains the remaining 60%. However, since 1992, the central finance department receives 5% from the local government, which retains the remaining 95% (Liu et al., 2012). It is thus obvious that local governments control the considerable income generated by land leases, and they can easily obtain large off-budget financial revenues via land lease (Lichtenberg and Ding, 2009). Today, many Chinese cities still have large areas of high-quality land occupied by the so-called “socialist land masters” (including central authorities and military agencies). It is difficult for local governments to obtain tax revenues from these organizations, and consequently there is a greater incentive to expand urban construc-

Attracting investment

Economic growth

Land finance

Fiscal revenue

Urban construction land expansion

Officials’ promotions

Fig. 1. The theoretical logic connecting officials’ promotions and the expansion of urban construction land.

tion land and urban territory to generate more financial income (Hsing, 2006). In general, because of decentralization reform and more intense regional competition, Chinese local governments are eager to convert land from rural to urban use. This is for two reasons, namely to obtain more land income and compete for more foreign investment (Ding and Lichtenberg, 2011; Gao et al., 2014). Such motivations have resulted in a shift in local governments’ position on urban development and become one of the driving forces behind China’s urban construction land expansion (Fig. 1). It should be pointed out that most studies that examine the relationship between local government behavior and urban construction land expansion consider local officials as an entirety with consistent behavioral motives and logic. However, local officials are different individuals; thus, there will be inconsistencies in their behavioral motives and decisions. In other words, different local officials might make different decisions on urban construction land expansion, even when encouraged by the same promotion incentives. To this end, we hypothesize a connection between different local officials’ behavior in response to promotion incentives and their decisions on urban construction land expansion. We expect that local officials facing more powerful promotion incentives will more likely prefer inefficient land development strategies. 2.2. Analytical framework and research hypothesis As mentioned above, in China, the promotion of local officials is largely related to their performance, including their ability to implement economic growth, attract investment, and improve infrastructure. It is widely understood that the pursuit of excellent performance to get a promotion (the so-called promotion tournament) is the main logic behind local officials’ decisions (Li and Zhou, 2005). As the land is also an important source of income and no land means no development (Cheung, 2009), leasing land can both generate revenue and attract investments and project development, resulting in local economic growth and increased tax revenue. This “one-step solution” stimulates local governments’ enthusiasm for these policies, and local officials inevitably leap at implementing policies regarding urban construction land expansion and development. Of course, as self-interested economic individuals, local officials’ decision making is inevitably affected by their own interests, and different individuals may have different interests. Therefore, decisions made regarding urban land development and utilization by local officials with different individual characteristics can be largely understood as their different behavioral responses to the promotion incentive. Fig. 2 illustrates an analytical framework that shows the influence of local officials’ personal characteristics on their decisions regarding construction land development in view of the promotion incentive. Generally, promotion incentives affect decisions made by local officials regarding the expansion of urban construction land in three ways: officials’ past governing experience, their performance during their current tenure, and their expectation of promotion in the future. These motives are closely related to other

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Past

Present

Future

The source of promotion

The tenure of local officials

The age of local officials

Governing experience

Governing performance

Expectation of promotion

Local officials’ decision making driven by the promotion incentive

Urban construction land expansion Fig. 2. Analytical framework.

factors such as the promotion’s source, tenure, and age. Local officials with different governing experiences make different decisions about development and may choose different regional and specific projects, which can be traced to their promotion path and experience in their current position. Different expectations for promotion lead to different decisions regarding the development and utilization of construction land. However, these expectations depend on an official’s age and current performance. In the pursuit of high performance during their tenure, the local official makes various decisions regarding the development and utilization of construction land use. Of course, local officials primarily judge performance based on their own values. On one hand, when a local official expects a greater chance of promotion, based on past experience, they make development and utilization decisions aimed at the performance level, which is helpful for the promotion. On the other, when local officials have little chance of promotion, they may make different decisions regarding land development and utilization in pursuit of other performance criteria (such as maximizing their own benefits and those of others with related interests). Based on the above analysis, we present the following hypotheses to explain why differences in individual characteristics among local officials may impact decisions regarding urban construction land expansion. (To simplify the analysis, we divide promotion sources into two categories, namely local city promotion and transfer to another city. The term of office and age of local officials is addressed by year.)

Hypothesis 2 (H2). The duration of a local official’s tenure influences urban construction land expansion in two ways. (1) The longer a local official’s tenure, the longer the initial development strategy will continue. The intensity of urban construction land expansion will slow to some extent, which is helpful for improving the efficiency of urban construction land use. (2) However, the longer a local official’s tenure, the more eagerly they will pursue promotion opportunities, which may stimulate short-term behaviors. Specifically, in the later stage of a term, the critical period for determining promotion (the third or fourth year after appointment),3 local officials will often increase investment to enhance economic growth, resulting in the rapid expansion of urban construction land and decreased land use efficiency.

Hypothesis 1 (H1). Compared to officials transferred from other cities, those promoted within their home city tend to continue implementing the city’s previous development strategy. This benefits the city, as construction land is expanded in a rational manner and there is intensive urban growth, including more efficient urban construction land use. In other words, transferred officials often initially try to adopt externally oriented strategies regarding urban construction land expansion to showcase their unique ideas and highlight their future performance, such as adjusting the plan to open new areas or investing in new projects. (As the saying goes, “a new broom sweeps clean.”)

3. Models and data

Hypothesis 3 (H3). The influence of local officials’ age on urban construction land expansion is mainly related to promotion expectations. The younger the official, the more they tend toward quicker results, choosing extensive expansion over a shorter timescale. On the other hand, those with more time on the job and more experience tend to slow urban expansion and build a more rational development strategy. Furthermore, as local officials grow older and sense less chance of promotion,4 they may also opt for an extensive, inefficient expansion strategy.

Based on the above theoretical analysis, this paper now examines the specific influence of promotion incentives on local officials and urban construction land expansion in two ways: the influence on the scale of urban construction land and the influence on land use efficiency. We built two econometric models as follows.

3 In a five-year term of office, most opportunities for promotion appear in the third or fourth year, which are also the key years for local officials to accelerate government spending and increase economic growth (Zhou and Zou, 2014). 4 According to He and Sun (2012), the older the mayor, the more likely the mayor is to be promoted. Most opportunities for promotion emerge between the ages of 48 and 52. However, after this age bracket, the older the mayor, the less is the likelihood of promotion.

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3.1. Model I: the promotion incentive for local officials and changes in the scale of urban construction land Many studies claim that economic development and population growth are the main factors affecting the scale of urban construction land expansion (Angel, 2012). The expansion of urban construction land is also related to investment and the land resources of a city (Seto and Kaufmann, 2003). Therefore, when it comes to the specific influence of local officials’ promotion incentives on urban construction land expansion, the above factors can be considered as control variables within the following basic model: DUCLit = C + ∝1 DPEOit + ∝2 PCGDPit + ∝3 INVit + ∝4 PCLit +∝5 LOPSit + ∝6 LOPTit + ∝7 LOPTit2 + ∝8 LOPSit ∗ LOPTit +∝9 LOAGEit + ∝10 LOAGEit2 + 

(1)

Wherein, DUCLit represents the added value of construction land in the period t of city i (Unit: km2 ). DPEOit represents the population increase (unit: 104 person) of city i during period t; PCGDPit and INVit denote the GDP per capita (unit: 104 yuan/person) and fixed asset investments (unit: 100 million yuan) of city i in period t; PCLit is the per capita construction land (unit: m2 /person) of city i in period t; LOPSit is the promotion sources of city i in period t (0 = local city promotion, 1 = transfer to another city); LOPTit is the current tenure of the local officials of city i in period t (unit: years); LOAGEit is the age of local officials of city i in period t (unit: year); and the interactive variable LOPS*LOPT is used to reflect the influence of the time taken by local officials transferred from other cities on the change of urban construction land scale. Considering that the impact of promotion factors on decision making behavior may change with an increase of tenure and age, these factors are included in the above model as quadratic terms. 3.2. Model II: the promotion incentive for local officials and changes in urban construction land use efficiency According to the theoretical analysis, local officials’ decisions under the promotion incentive regarding urban construction land expansion are not always inefficient. Therefore, for a more comprehensive evaluation of the impact of promotion incentives on urban construction land expansion, this paper also explores the specific influence of promotion incentives on construction land use efficiency, setting up the following models to reflect the relationship between local officials’ characteristics and urban construction land use efficiency: PLGDPit = C + ∝1 PLINVit + ∝2 PLLABit + ∝3 INDSit + ∝4 LOPSit +∝5 LOPTit + ∝6 LOPTit2 + ∝7 LOPSit ∗ LOPTit + ∝8 LOAGEit +∝9 LOAGEit2 + 

(2)

Wherein, PLGDPit represents the GDP per urban construction land of city i in period t (unit: 104 yuan/ha); PLINVit represents the investment in fixed assets per construction land of city i in period t (unit: 104 yuan/ha); PLLABit represents the labor input per construction land of city i in period t (unit: person/ha); INDSit indicates the proportion of the tertiary industry output value of city i in period t (Unit: %); and LOPSit , LOPTit , LOAGEit , and LOPSit *LOPTit have the same meaning as in model I. In China’s local political system, local officials include the mayor, who is in charge of administration, and the municipal party secretary, who manages party affairs. The mayor often serves as deputy secretary; therefore, to some extent, the municipal party secretary

may have more impact on decision making if he/she chooses to become involved. According to relevant research by He and Sun (2012), their different responsibilities mean that the mayor has more specific responsibility than the municipal party secretary on decisions regarding economic development and management. However, the absolute leadership of the Communist Party has determined that secretaries are more powerful than mayors, and the former has the final discretion in most matters. Therefore, both the mayor and municipal party secretary are likely to have a significant influence on urban construction land expansion. In view of this, the above models (Eqs. (1) and (2)) should include variables to account for the characters of both the mayor and municipal party secretary. More specifically, LOPSit is reflected in two variables, namely the promotion sources of the mayor (MYPSit ) and municipal party secretary (PSPSit ). LOPTit reflects both the mayor’s term in office (MYPTit ) and that of the municipal party secretary (PSPTit ). Further, LOAGEit reflects both the mayor’s age (MYAGEit ) and that of the municipal party secretary (PSAGEit ). 3.3. Research area and data sources The Yangtze River Delta area is undergoing rapid urbanization and contains one of China’s major urban agglomerations. The history and rules of urban construction land expansion in the Yangtze River Delta is a microcosm of the expansion of urban construction land since China’s reform. Based on the theoretical analysis above, this study uses the data of 25 prefecture-level cities in the Yangtze River Delta (including Shanghai and cities in Jiangsu and Zhejiang Provinces) from 1999 to 2014 to estimate the above models (Fig. 3). The required data sources are as follows: (1) The GDP, proportion of tertiary industry output value, investment in fixed assets, and population data come from the China City Statistical Yearbook 1999–2014 (NBSC-USEID, 2000–2015). (2) The labor force is derived from the China City Statistical Yearbook 1999–2014, and acquired by summing the numbers of employed and self-employed individuals in urban districts (NBSC-USEID, 2000–2015) (3) The amount of urban construction land comes from the Annual Statistical Report of Urban Construction 1999–2005 (MUCC, 2000–2006) and the China Urban Construction Statistical Yearbook 2006–2014 (MUCC, 2007–2008; MOHURDC, 2009–2013; MOHURDC, 2014–2015). (4) The data regarding local officials mainly comes from each official’s yearly resume (www.baidu.com). It should be noted that if the appointment date is before the end of June, the term of office is counted from the beginning of the year the officer is appointed. After that date, the term is calculated starting the following year. The local official with the longest tenure will be deemed the local official for that year if two or more officials served alternately during the same year. It should be clarified that some data is missing, since some information on local officials in some cities for some years is unavailable. The data we collected is shown in an unbalanced panel. Table 1 shows the descriptive statistics of the variables described above. 3.4. Changes in the scale expansion and utilization efficiency of urban construction land in the Yangtze River Delta region The years between 1999 and 2014 were a period of rapid and sustained economic development in the Yangtze River Delta region and consequently, of rapid expansion in urban construction land. This is in part due to the relatively stable economic development and legal environment during these years. According to China’s official statistics, among the cities of the Yangtze River Delta region,

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Fig. 3. The research area.

Table 1 Descriptive statistics of the variables used in the model. Variable

Number of observations

Minimum

Maximum

Mean

Std. deviation

DUCL DPEO PCGDP INV PCL PLGDP PLINV PLLAB INDS LOPS

400 400 400 400 400 400 400 400 400 391 400 395 400 385 398

–89.84 –9.68 0.6906 7.7234 15.9963 71.0033 23.1782 12.2667 27.05 0 0 1 1 28 30

604.52 209.85 20.9983 5877.619 213.7993 4342.965 2650.682 252.3793 64.9 1 1 10 10 70 73

13.7590 8.3557 5.4122 703.9044 83.9765 641.3604 359.2248 46.4139 42.8753 0.6650 0.4575 2.6481 3.0675 49.6156 51.8819

49.3910 26.4838 4.0236 1038.901 34.9956 412.8249 271.3552 21.6534 6.5725 0.4726 0.4988 1.7277 1.9137 4.8844 5.2749

LOPT LOAGE

MYPS PSPS MYPT PSPT MYAGE PSAGE

Notes: DUCL: added value of construction land, DPEO: the population increase, PCGDP: GDP per capita, INV: fixed asset investments, PCL: the per capita construction land, PLGDP: GDP per urban construction land, PLINV: investment in fixed assets per construction land, PLLAB: labor input per construction land, INDS: proportion of tertiary industry output value, MYPS: promotion sources of the mayor, PSPS: promotion sources of the municipal party secretary, MYPT: the mayor’s term in office, PSPT: the term in office of the municipal party secretary, MYAGE: the mayor’s age, PSAGE: the age of the municipal party secretary.

Shanghai has the largest urban construction land (2915.56 km2 ), while Lishui has the smallest (36.69 km2 ) (Fig. 4). Certainly, increasing the scale of urban construction land does not equate to more efficiency in construction land use. As shown in Fig. 5, the average annual output (GDP) per construction land in the cities of the Yangtze River Delta region from 1999 to 2014 indicates that

Changzhou has the highest and Lianyungang the lowest. It is noted in the comparison that Shanghai, Nanjing, and other large cities have fairly inefficient land use. Further analysis determined that from 1999 to 2014, the average increase in the scale of construction land in the cities studied was more than 215 km2 . The scale of construction land in Shang-

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Fig. 4. Construction land area in cities of the Yangtze River Delta region in 2014.

hai had the largest expansion, as high as 1762.52 km2 , whereas Lishui, the smallest, only added 28.79 km2 . The average expansion rate (defined as the ratio of the average annual expansion scale and average annual area of urban construction land) is 7.26%. Shaoxing has the highest expansion rate (13.70%) and Zhoushan the lowest (1.58%) (Fig. 6a). Alongside the rapid expansion of urban construction land, the construction land use efficiency of cities in the Yangtze River Delta region has also significantly improved. Compared to 1999, in 2014, the GDP output per construction land of each city increased by an average of 780.17 × 104 yuan/ha, with an average annual increase of 48.76 × 104 yuan/ha. Of course, there are considerable variations in the output efficiency of construction land for each city, and Changzhou is identified as having the highest increase in efficiency (1589.31 × 104 yuan/ha), while the lowest is Taizhou (Z) of Zhejiang Province (269.15 × 104 yuan/ha) (Fig. 6b). It is not difficult to discover from the analysis on the relationship between urban construction land expansion over these years and officials’ individual characteristics that in the period 1999–2014, the average expansion rate of urban construction land and average proportion of external promotion of local officials (including the mayor and municipal party secretary) presented a relatively

obvious positive correlation. Furthermore, the change in output efficiency of urban construction land and the average term of local officials presented a relatively obvious positive correlation as well. Of course, further model testing is required to more accurately analyze the relationship between urban construction land expansion and local officials’ individual characteristics.

4. Results We utilized STATA 13.0 software to estimate the random effects (RE) and fixed effects (FE) of Eqs. (1) and (2). The Hausman test was employed to determine whether the RE or FE model should be adopted. Although different combinations of independent variables were used to evaluate six specific models for Eq. (1) and five for Eq. (2), the results of the Hausman test showed the RE model to be more effective. The results of this estimation are listed in Tables 2 and 3. Table 2 shows the model estimation results regarding the influence of local officials’ promotion incentive on the scale of urban construction land. Table 3 shows the model estimation

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Fig. 5. The average annual output (GDP) per construction land in cities of the Yangtze River Delta region from 1999 to 2014.

results regarding the influence of local officials’ promotion incentive on urban construction land use efficiency.

4.1. Estimated results of Model I According to the results of the six specific models listed in Table 2, the influence of the four control variables (DPEO, PCGDP, INV, PCL) on the dependent variable is significant, consistent with the conclusion of existing research. Specifically, using the change in the current scale of urban construction land in the Yangtze River Delta region, we claim that population growth and increased investment both have significant positive effects on the expansion of urban construction land. The higher the level of economic development (GDP per capita) and the higher a city’s level of construction land development (construction land per capita, these are usually economically developed cities with a higher administrative rank), the lower the increase in the scale of construction land. Local officials’ individual characteristics have three discernible influences on the change of scale of urban construction land. (1) Generally, the promotion sources of local officials and their terms in

office have a significant impact on urban construction land expansion, while the age of local officials has an insignificant impact on the change of scale of urban construction land. (2) Compared to locally promoted officials, mayors and municipal party secretaries transferred from other cities prefer larger-scale expansion of urban construction land early during their term in office. This supports H1, namely that transferred officials will adopt externally oriented strategies on urban construction land expansion to highlight their future performance. However, over time, the overall trend of urban construction will be slower than that in cities with officials promoted locally. (3) The influence of local officials’ tenure on the expansion of urban construction land is relatively complex. On one hand, the tenure of municipal party secretaries has a positive impact on the expansion of urban construction land, indicating the further expansion of urban construction land over time. This is consistent with the anticipation judgments of H2. In China, promotion from municipal party secretary to the leadership cadre at the deputy provincial level is very attractive (the retirement benefits of the latter are significantly better); thus, the municipal party secretaries’ need for promotion will become more urgent

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Fig. 6. Changes in the scale and utilization efficiency of construction land in cities of the Yangtze River Delta region from 1999 to 2014.

over time. On the other, a mayor’s tenure has a negative impact on the expansion of urban construction land, but it is not statistically significant. It should be noted that the square term of a mayor’s tenure (MYPT2 ) has a significantly positive impact on urban construction land expansion, which means the increase of the mayor’s term of office (with an inflection point after about two years) will eventually lead to the further expansion of urban construction land. 4.2. Estimated results of Model II In Table 3, the results of the five specific models show the significant influence of the three control variables (PLINV, PLLAB, INDS) on the dependent variable, as well as a positive effect on the improvement of urban construction land use efficiency, which is aligned to our existing theoretical knowledge. Specifically, in view of current changes to urban construction land use efficiency in the Yangtze River Delta region, the average labor force and investment growth trigger a positive effect on output per land block. Furthermore, upgrades to industrial structures (the increasing proportion of the tertiary industry) also contribute to the improvement of urban construction land use efficiency. In terms of the influence of local officials’ individual characteristics on urban construction land use efficiency, we reached the following four conclusions. (1) Generally, promotion sources, tenure, and age of local officials significantly impact urban con-

struction land use efficiency in different ways. (2) Compared to locally promoted officials, mayors and municipal party secretaries transferred from other cities have comparatively low efficiency in the output of urban construction land (the influence of the mayor is insignificant, but the influence of the secretary is significant). This is consistent with the results of Model I, supporting H1 that local officials transferred from other cities are more inclined towards extensive expansion strategies regarding construction land. (3) Both the mayor and secretary’s increased time in office negatively influences the efficiency of construction land under their governance. This also supports H2. It should be noted that the square term of the mayor’s tenure has a positive impact: the mayor will focus more on increasing efficiency during his tenure (with inflection point after about three to four years). This is aligned to Zhou and Zou’s (2014) conclusion that during a five-year statutory term, an official’s third or fourth year offers the most opportunities for promotion and is thus a vital year for improving performance. (4) The increased age of local officials has a positive effect on the efficiency of urban construction land, but only the mayor’s age is statistically significant. Moreover, the square term of the mayor’s age has a distinctly negative influence on utilization efficiency. This suggests that with increasing age (the inflection point is likely to be around 52 years, after which the opportunity for promotion is much smaller), a mayor might have low expectations for promotion and

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Table 2 Estimated results of Model I. DUCL

Model I-1

Model I-2

Model I-3

Model I-4

Model I-5

Model I-6

C

70.8182 (162.0263) 0.4970*** (0.0936) –3.2491*** (0.9440) 0.0098*** (0.0038) 0.4504*** (0.0878) 19.8612** (9.7462) –5.4512 (5.8528) 1.5082** (0.6502) –6.7249** (3.0280) –5.7897 (5.3874) 0.0634 (0.0562) 21.0759** (9.3198) 3.8040 (5.2905) –0.0591 (0.5782) –5.6342** (2.7513) 1.4263 (3.6366) –0.0175 (0.0360) 381 0.2728 136.56

–26.9604 (38.4345) 0.5091*** (0.0928) –3.2046*** (0.9158) 0.0102*** (0.0036) 0.4402*** (0.0865) 19.0137** (9.6081) –5.4299 (5.5162) 1.5363** (0.6099) –6.7560** (2.9866) 0.2538 (0.6044)

119.6092 (127.3564) 0.4850*** (0.0925) –3.1288*** (0.9125) 0.0096*** (0.0036) 0.4003*** (0.0821) 18.1670** (9.3101) –3.2052 (5.4342) 1.2557** (0.6003) –6.2847** (2.9052) –6.3646 (5.2858) 0.0712 (0.0548)

–41.3883 (29.1251) 0.4978*** (0.0921) –3.1813*** (0.9125) 0.0104*** (0.0035) 0.3929*** (0.0819) 17.4168* (9.3007) –3.4409 (5.4362) 1.3374** (0.5976) –6.3406** (2.9076) 0.4573 (0.5819)

16.3317 (91.5539) 0.4700*** (0.0864) –3.3614*** (0.8823) 0.0140*** (0.0035) 0.4512*** (0.0857)

–21.9177 (24.1283) 0.4720*** (0.0860) –3.4136*** (0.8578) 0.0142*** (0.0034) 0.4568*** (0.0844)

16.6774* (8.7902) 0.8098 (4.7235) 0.2657 (0.5335) –3.3957 (2.5123) –1.5961 (3.5737) 0.0140 (0.0353) 398 0.2191 108.57

17.2196** (8.6974) 3.0724* (1.6305)

DPEO PCGDP INV PCL MYPS MYPT MYPT2 MYPS*MYPT MYAGE MYAGE2 PSPS PSPT PSPT2 PSPS*PSPT PSAGE PSAGE2 N R2 Wald chi2

21.1457** (9.1424) 3.5375* (1.9240)

–5.7253** (2.6209) –0.3390 (0.5155)

381 0.2697 135.54

383 0.2615 131.75

383 0.2582 129.82

–3.7348 (2.4414) –0.1966 (0.5115)

398 0.2182 108.60

Note: Standard errors are in parentheses. ***, **, * indicate significance at 1%, 5%, and 10% respectively.

prefer an extensive expansion strategy. This is consistent with the anticipation judgments of H3.

5. Conclusions This paper focused on a key factor driving the expansion of urban construction land, namely the promotion incentive for local officials. This is the primary driving force for decisions regarding urban construction land expansion. Therefore, it is vital to understand how this process works. Although many related studies resulted in the common recognition that local officials in China, driven by performance appraisals and promotion incentives, will implement a large-scale urban construction land expansion strategy to raise economic indicators and increase fiscal revenue, little attention has focused on the differential decisions on urban construction land expansion by individual local officials. As such, this study attempted to expand the theoretical understanding of this aspect. Based on a brief analysis of the logic behind the influence of promotion incentives on urban construction land expansion, this paper developed an analytical framework to explore the mechanism. Taking 25 cities in the Yangtze River Delta region as samples, we estimated two econometric models that reflect the relationship between the various characteristics of local officials and changes in the scale and utilization efficiency of urban construction land. We used these models to test the specific influence of different local officials, driven by the promotion incentive, on local urban construction land expansion. The results indicate that the promotion sources of local officials and their terms in office have significant but variable effects on urban construction land scale and land use

efficiency. The age of local officials has a significant impact on urban construction land use efficiency as well, but an insignificant impact on urban construction land expansion. Specifically, a mayor or municipal party secretary transferred from another city will prefer larger-scale expansion of urban construction land than a locally promoted official during an early term in office; however, over time, the expansion of urban construction land slows until it is slower than the rate of decision making by locally promoted officials. The influence of local officials’ tenure on the expansion of urban construction land is relatively complicated. The longer a municipal party secretary has served, the greater the rate of urban construction land expansion. The influence of a longer mayoral tenure on urban construction land expansion cannot be easily identified in the short-term, but becomes increasingly distinguishable over time. Regarding the influence of promotion incentives on urban construction land use efficiency, compared to locally promoted officials, mayors and municipal party secretaries transferred from other cities prefer low efficiency in the use of construction land. Longer tenure of either the mayor or the municipal party secretary negatively affects the efficiency of urban construction land use. The age of the mayor has a positive influence on the efficiency of urban construction land use; however, at later stage of governance, a mayor will prefer to implement an extensive expansion strategy for construction land. It should be noted that many factors that reflect the individual characteristics of local officials are not included in this paper—we focused on promotion sources, tenure, and age. Other definitive characteristics are left for future study. At present, many countries in the world, including China, advocate the smart growth

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Table 3 Estimated results of Model II. PLGDP

Model II-1

Model II-2

Model II-3

Model II-4

Model II-5

C

–1036.492 (399.2054) 1.0928*** (0.0316) 4.6709*** (0.4062) 2.2436* (1.2166) –24.6040 (21.0368) –29.8208** (12.2067) 4.2551*** (1.3718) 5.0758 (6.6236) 44.1451*** (12.2058) –0.4355*** (0.1279) –62.5850*** (20.0722) –6.4877 (11.1158) –0.1601 (1.2350) 5.1149 (5.8796) –3.4017 (8.7171) 0.0474 (0.0864) 381 0.8921 5377.40

–1179.274 (311.2007) 1.0913*** (0.0316) 4.6853*** (0.4059) 2.2659* (1.2094) –22.3743 (20.7914) –29.5653** (11.6163) 4.2916*** (1.2998) 4.4674 (6.5421) 45.0764*** (12.1095) –0.4445*** (0.1270) –62.8147*** (19.9223) –7.5569* (4.1377)

–1018.83 (305.0303) 1.1193*** (0.0310) 4.3709*** (0.4043) 2.1548* (1.2203) –16.0877 (20.9555) –34.4726*** (11.7910) 4.3208*** (1.3063) 4.7730 (6.6036) 39.2895*** (12.3146) –0.3766*** (0.1286)

186.005 (224.6143) 1.1134*** (0.0284) 4.3572*** (0.3804) 2.2625** (1.1412)

–91.6861 (80.1616) 1.1131*** (0.0284) 4.3323*** (0.3798) 2.3937** (1.1366)

–59.7497*** (19.4694) –11.9999 (10.1107) 0.5824 (1.1660) 7.5562 (5.4418) –9.4356 (8.5105) 0.1075 (0.0840) 398 0.8876 5253.63

–59.8128*** (19.4385) –6.8831** (3.5750)

PLINV PLLAB INDS MYPS MYPT MYPT2 MYPS*MYPT MYAGE MYAGE2 PSPS PSPT PSPT2 PSPS*PSPT PSAGE PSAGE2 N R2 Wald chi2

4.9507 (5.6684) 1.3546 (1.2704)

381 0.8926 5367.94

383 0.8923 5061.34

6.6391 (5.3375) 1.3387 (1.2399)

398 0.8877 5228.00

Note: Standard errors are in parentheses. ***, **, * indicate significance at 1%, 5%, and 10% respectively.

of cities. Smart growth is a scientifically planned development mode that protects agricultural lands, rejuvenates communities, maintains affordability for residences, and provides multiple traffic choices, amongst others.5 From this perspective, the effective urban construction land expansion stated herein still reflects content on social justice and environmental benefit, not only content on land economic output efficiency emphatically discussed in this paper. Therefore, it is necessary to make several stronger cases for further research, especially regarding social justice and ecological concerns. The conclusions of this study may provide governments with policy-making tools to improve the administrative system and regulate urban construction land expansion with higher efficiency. Changes should be made to the current appraising system for local officials, which focuses on economic development as the main performance indicator. The Chinese government should pay more attention to local economic and social development by considering regional economic growth, social development, and the ecological environment, and establish an appraisal system and incentive rules based on local circumstances for sustainable land use. Second, there are still possibilities for further improvement in terms of the appointment and tenure of local officials. The Chinese government has strict rules for the appointment and tenure of local officials at each level; for example, local officials at different levels are subject to different age limits, and appointing local officials from outside the local area is encouraged. However, considering the improvement of utilization efficiency of urban construction land, we believe

5 This definition is summarized and concluded from the Preface written by Professor Chengri Ding for the book Smart Growth: Form and Consequences (Chinese version) (Szold and Carbonell, 2007).

that local promotions and longer tenures should be encouraged. In addition, it is a good strategy to appoint young local officials (in line with the current situation, whereby an increasing number of young officials are appointed at all levels) and to improve supervision mechanisms to prevent improper urban expansion decisions made by officials ready to retire. Third, we must gradually dismantle the established interrelationship between the inefficient expansion of urban construction land and growth of the local economy and revenue. As mentioned, China’s local governments rely extensively on land finance since the decentralization reform, and one of the key solutions is to provide the local government with a stable income for the development of the local economy and public services. We believe that reforming the existing urban land use system, which aimed at long-term leasing for land finance, and establishing a property tax structure and system similar to that in Europe and the USA will not only encourage land users to improve land use efficiency, but also accelerate the decreasing dependency on land finance. Such a structure would be an effective tool to regulate and control urban construction land expansion and improve land use efficiency.

Acknowledgements This work was supported by the National Natural Science Foundation of China [grant numbers 41671171, 41571162 and 41501185]; The Research Project of Humanities and Social Sciences of the Ministry of Education in China [grant number 16YJC630122]; and the Priority Academic Program Development of Jiangsu Higher Education Institutions (PAPD).

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