Combining behavioral interventions with market forces in the implementation of land use planning in China: A theoretical framework embedded with nudge

Abstract

Land use planning has become an important topic for research in China and a critical public management means to restrain and regulate land use behavior. China's current land use planning can be divided into different levels of planning, that is, national planning and local planning. The central government designs land use planning that emphasizes control and longer-term goals; whilst local governments tend to have shorter planning time scales and more market-oriented goals. This government-led type of planning system often caused mismatches between supply and demand and planning failures. This is a challenge facing researchers and policy makers in China at all levels. In this paper we propose the use of nudges as a new approach of government interventions to tackle this problem. We develop a theoretical framework to embed nudges in land use planning, and use Zhejiang Province as a case study to demonstrate the empirical implementation of the framework. We argue that nudge-based government interventions are efficient and effective alternatives for conventional, direct administrative orders. It facilitates decisions that can both improve private welfare and protect public interests; it strikes a balance between government interventions and market forces while still preserves the freedom of choices. It is a promising direction for the research and practice of land use policy in China and beyond.