Rethinking local government perceptions of Land Value Capture in land marketization: The lens of dominant consideration(s) in interest-balancing acts

Abstract

Understanding the perceptions of local governments around the Land Value Capture (LVC) changes resulting from land marketization is crucial for urban development, urban politics, urban planning, and institutional land reform. While the perceptions of local governments should reflect the delicate acts of balancing interests such as between economic, social, and political considerations, the economic concerns have generally taken precedence. In addition, local governments tend to have negative attitudes if LVC declines economically. Yet local government perceptions cannot be explained adequately if additional considerations are not taken into account. This paper contributes in two main ways. Theoretically, the literature is extended by exploring the dominant considerations of local governments in interest-balancing acts. Empirically, it contributes divergent evidence from China's latest rural land reform in terms of local government scales, inland-coastal regions, and urban-rural areas. Data were collected through 119 semi-structured interviews from 430 rural land transactions in five Chinese counties as well as from the literature and other secondary sources. Qualitative analysis was predominantly adopted for empirical analysis. In sharp contrast to existing understanding, the results generally indicate that local governments hold positive perceptions of declining LVC caused by land marketization reform. Specifically, 1) Provincial governments hold positive attitudes although they no longer capture adjusting fee; 2) Inland governments express positive perceptions despite reduced adjusting fee; 3) Local governments show positive attitudes even after losing economic benefits in terms of rural land transactions that took place in remote rural areas. This is because social and political considerations explicitly dominate interest-balancing acts. This research sheds new light on ongoing debates about the perceptions of local governments.