China's local local governments breaking the land use planning quota: A strategic interaction perspective

In China, the planning quota, i.e., the binding target of construction land (BTCL) in land use planning for 15 years (2006-2020), was exhausted within only 7 years, which represents a very serious problem. This result not only nullifies the meaning of the plan itself but also threatens China's food and ecological security and poses great challenges to sustainable development. Here, we develop an analysis framework for local governments that break the BTCL in view of the strategic interactions of transferring newly increased construction land (NCL) among local governments and perform an empirical analysis of data on 262 prefecture-level cities from 2007 to 2016. The two main conclusions are as follows. First, adjacent local governments engage in positive strategic interactions regarding the quantity of NCL transferred. Second, positive strategic interactions regarding the quantity of NCL transferred are important reasons why local governments break the planning quota. In addition, we find that better economic development corresponds to more obvious positive strategic interactions. We also find that fiscal incentives and land misallocation play a significant role in promoting the increase in NCL, while strengthening land law enforcement can effectively constrain the increase in NCL. This paper enriches the literature on the reasons for planning failures, extending the research perspective to the level of interaction effects among local governments, and this paper provides new evidence regarding the strategic interaction among Chinese local governments. Moreover, this paper provides an important new path for the central government to constrain urban land expansion and to control the behavior of local governments that break the planning quota.