“Land Taking, Windfall Revenue, and Social Unrest: Evidence from China” by Xiaobo Lü, Lynette Ong, & Wenhui Yang
March 31, 2021 @ 9:00 am – 10:00 am JST
Abstract: Land expropriation is a highly contentious issue in any society, yet existing research primarily focuses on land related conflicts and scholars have paid little attention to the broader state-society relations. Furthermore, identifying the causal effects of land expropriation is challenging due to the endogeneity issue, and the net effects of land exploitation were rarely explored. We employed a Geographical-Regression-Discontinuity within a Differences-in-Differences framework to evaluate the impact of land expropriation on social unrests in China. In particular, we focus our inquiry through the lens of windfall revenues generated by local governments’ land expropriation and investigate their net effects. Contrary to the existing arguments of resource curse, we find that cities with fewer land revenues are more likely to experience unrest. We investigate various mechanisms, and find suggestive evidence that windfall revenues lead to less direct tax burden, thus reducing the likelihood of social unrest.