Tonglong Zhang, SCAU
This paper examines how the preferences of leaders affect their policy choices. Using data of plot-level transaction records and the regression discontinuity design approach, we investigate the impact of the preference of municipal party secretaries(MPS) shaped by their early-life experience, the unpredictable widespread famine occurred in exact 1959-1961, on their land market decisions in China. Our results show that MPSs with early famine experience significantly increase the prices of industrial and residential land. We further find that MPSs with early famine experience place greater more emphasis on agricultural production and thus expropriate less agricultural land, leading to dramatically decreased supply of residential land and thus higher prices. Moreover, they are more inclined to supply industrial land through market rather than non-market, resulting in higher prices pushed up by relatively higher market demand. We propose that the differences in land market decisions among local governments in China may be attributed to local leaders’ different preferences for resource allocation, which are induced by their early-life experiences. This paper contributes to comprehend the land market, policy preferences of leaders and the interaction of the two in some contexts of developing countries.
Presented in Session 76. The State and Disaster