Does land reserve system improve quality of urbanization? Evidence from China

Abstract

Within its function of controlling urban development and regulating land use (particularly housing provision), land reserve systems impact urbanization processes. In China, the land reserve system has played a complex role in the rapid urbanization over the past years, as one of the most significant land use policies in land system reform and land resource administration. However, there are as yet few quantitative studies on the role of the land reserve system, particularly its impact on quality of urbanization on the basis of the people-oriented principle. To examine the relationship between the land reserve system and the quality of urbanization, including how land reserve financing impacts urbanization, this paper first develops an index system for quality of urbanization on the basis of the people-oriented principle, and measures the quality of urbanization from the perspective of accommodating human needs. Then, taking China as an example, it analyzes the impact of the government's land reserve system on the quality of urbanization and its conduction mechanism, using municipal panel data from 2008 to 2014. The results show that the land reserve system had a positive impact on the quality of urbanization; the mediatory effects of urban development space, urban construction expenditure, and housing price are verified in the influence process. Further, although some negative impacts are observed due to higher land prices, etcetera, it is through the land reserve system that local governments are able to acquire space and funding for urban construction and development, which are used to invest in infrastructure and provide public services for accommodating multilevel human needs, including physiological, safety, self-esteem, and self-improvement needs in the long run. Therefore, this paper provides evidence that the land reserve system has improved the quality of urbanization to a certain extent in China. The study is also of great significance in the quest to understand the differences of urbanization in different regions, and the findings have implications for other countries and regions in similar contexts.