Land Resource Allocation and local government debt: a perspective based on Rural land reform and Urban Change

Abstract

This study examines the interrelationship between land resource allocation and local government debt, aiming to reveal the importance of both in China’s urbanization process and their impact mechanisms. The study reveals, upon examining the nature of land resource distribution and its effects on local government income that while land transfer revenues, a primary provider of local government finance and short-term debt relief, excessive dependence on land financing could elevate the debt risk. Concurrently, judicious handling of municipal debt may invert the efficient distribution of land assets, fostering the development of infrastructure and enhancement of public services. However, the increased debt burden may lead to short-term behaviors and exacerbate the inefficient use of land resources. Through typical case analysis, This paper reveals how local governments can adjust the structure of land resource utilization in debt management, and discusses the challenges and risks faced in the process. Drawing from these studies, the research suggests strategies to enhance the distribution of land resources, bolster the management of local government debt, and foster sustainable growth. This study’s findings offer not just a theoretical framework for grasping the intricate interplay between land resource distribution and municipal debt, but also bear significant practical consequences for urban development, economic growth, and policy development. However, the study still suffers from limitations such as insufficient regional coverage and lack of quantitative analyses, and a wider range of cases and quantitative models can be further explored in the future to deepen the understanding of the field.