Leader Networks and Interjurisdictional Contracting in Land Conversion Quotas

Abstract

Do network connections between government officials and administrative units facilitate efficient land use contracting across jurisdictions? This paper leverages data from a ground-breaking policy in China where a strict quota-bound land use policy was replaced by an alternative permitting between-county trade in land conversion quotas. We unpack the determinants of the boundary between trading and autarkic jurisdictions, and unveil leader-related drivers of transaction costs between jurisdictions in a gravity-style estimation. We catalogue entire personal and career histories of county-level leaders, and present evidence that leader networks derived from employment history are robustly trade facilitating but non-workplace links are not.