Chinese Decentralization and Urban Sprawl: Second Explanation under the Tragedy of the Commons
中国式分权与城市扩张——基于公地悲剧的再解释

Theoretical analysis and empirical research were employed to verify the tragedy of the commons hypothesis. The behaviors of local governments affecting urban sprawl under the Chinese decentralization system were analyzed from the perspective of different periods. The package of current land institutions considers the rural land as commons and this is the reason local governments can easily expropriate rural land. Pooled OLS, random effects and fixed effects methods were used for the static panel data model, while system-GMM methods were used for dynamic panel data modeling. The results show that the impact of decentralization to urban sprawl is different at different stages. The first policy implication arising from our data is that local governments who earn income from urban sprawl are affected by the current tax sharing system. In order to change the directions of local government, central government can adjust the system of sharing taxes, and improve budget management and land transfer fees. The second policy implication is that a tax differentiation strategy that guides local governments to adopt a different industry strategy should be developed. In conclusion, the amount of urban sprawl was affected by itself and land market development will be useful when attempting to slow the speed of urban expansion.