Networked Leaders in the Shadow of the Market – A Chinese Experiment in Allocating Land Conversion Rights
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Concerns over the loss of cultivated land in China have motivated a system of centrally mandated annual land use quotas effective from provincial down to township levels. To facilitate efficient land allocation, a ground-breaking policy in the Zhejiang Province permitted sub-provincial units to trade land conversion quotas. We theoretically model and empirically estimate the drivers of local government participation in this program to shed light more broadly on the drivers of local government decision-making. We find robust support for three sets of factors at the sub-provincial level: market forces, administrative autonomy, and prior network connections of local government leaders.