Does Environmental Decentralization Affect the Supply of Urban Construction Land? Evidence from China

Abstract

Against the background of Chinese decentralization, the preferences and choices of local governments significantly affect the scale and structure of urban construction land supply. Due to the shortage of financial funds and the political performance pursuit of local governments, environmental decentralization gives local governments greater autonomy in environmental management, and increases the possibility for local governments relying on land transfer income to make up for the financial gap and provide public goods and services. This paper analyses the impact of environmental decentralization on the construction land supply scale of local government based on the panel data of 30 provinces in China from 2003 to 2015. The results indicate that: (1) environmental decentralization has a positive effect on the increase in urban construction land supply scale; (2) environmental decentralization affects urban construction land supply by strengthening land financial dependence and distorting land resources misallocation; (3) there are regional disparities in the effect of environmental decentralization on urban construction land supply. The impact is greater in regions with high financial pressure, high economic growth pressure, and low environmental protection pressure. In summary, some policy suggestions are put forward to reasonably supply urban construction land against the background of Chinese decentralization.