Local government competition and centralised urban growth management policy implementation: evidence from China

Chinese central government uses top-down land quotas as a key tool for limiting urban expansion. Faced with the benefits of land development, how will local governments respond to centralised quotas? We established a framework for multidimensional local government competition to explain quota implementation. This framework includes vertical competition for fiscal revenue and quotas, horizontal competition for economic growth and political promotion, competition between former and subsequent local leaders for recognition of their leadership and temporal distribution of land finance revenue and government debt and competition with landowners as well as developers for land appreciation income and tax revenue. We argue that these types of competition and their spill-over effects drive local governments to strengthen land-centred urbanisation, resulting in the failure of quotas to restrain urban expansion. Our findings help to improve the understanding of local governments' strategies for urban spatial development and centralised urban growth management.