Publications

Under the 1995 Budget Law, land finance, rather than local government bonds (LGBs), played a critical role in bridging fiscal gaps for Chinese local governments. This paper examines the impact of the self-issuance (SI) reform of LGBs from 2011 on land leasing using county-level data from 2000 to 2019 combined with land parcel data and business registration databases of China. Findings reveal that, firstly, SI reforms initially reduce land leasing but increase it by 24.86% three years later, with a preference for commercial and residential land. Reforms also raise commercial and residential land leasing prices by 14.22% and do not compel lower prices for industrial land. Secondly, based on repayment obligations, the self-issuance and central-government-repayment (SICGR) mode alleviates fiscal pressure, favouring commercial and residential land leasing, while the self-issuance and self-repayment (SISR) pattern enhances fiscal sustainability and leads to more industrial land leasing. Thirdly, mechanism analysis suggests that SI reforms increase debt burden and decrease fiscal self-sufficiency, primarily through land tender, auction, and listing mechanisms, resulting in unbalanced regional development. This research highlights the need for sustainable development patterns under the New Budget Law of 2015, balancing fiscal revenues, the land market, and local government debts.

Environmental decentralization enhances local autonomy accountability and initiatives. However, some evidence suggests that it might foster a race to the bottom in environmental protection, exacerbating cross-border pollution. Consequently, certainareas in China initiated the vertical management reform of environmental protection agencies (VMR), characterized by centralization, in 1992. The relatively exogenous shock on firms helps to identify the causal effect of the VMR on pollution and production. Using the combined data of ASIF and ESR from 1998 to 2013, along with collected policy details at the county-level, we utilize the staggered DID design. Our findings demonstrate that the VMR significantly reduces approximately 22.94% of COD emissions from industrial firms. This reduction is achieved through passive approaches such as reducing production, decreasing the entry of firms, and increasing the rate of firms shutting down. Additionally, a proactive approach of increasing the wastewater treatment capacity of individual facilities contributes to this reduction. The impact of the VMR is significant in polluting industries, large-scale firms, and firms located at administrative boundaries, mainly driven by local officials with strong promotion incentives. The paper underscores the advantages of environmental centralization, particularly the role of the VMR in addressing environmental pollution, especially in the context of transboundary issues. However, due to information asymmetry within centralization, its implementation incurs high economic costs, necessitating more precise and sophisticated regulation.

Internal migrants account for over one-fourth of China’s population, and their saving behavior is important in explaining “the Chinese saving puzzle”. The relation between household savings and house prices has been studied, but this paper utilizes a quasi-experiment that removed home purchase restrictions to examine the causal effect of homeownership on migrant household savings through a difference-in-differences approach and instrumental variable estimation. We find that the migrant saving rate significantly decreases after migrants buy houses, falling below that of the local hukou population. Further analysis reveals that this effect of homeownership can be explained by the consumption effect rather than housing purchase or increased household income effects. Our findings imply that hukou-based policies, including the allocation of public goods and the right to buy private goods such as houses, will harm both migrant welfare and sustained economic growth.