Incentive adjustments and land leasing behavior shifts: A quasi-natural experiment of off-office audits

Abstract

Incentive adjustments to promote the rational utilization of natural resources by local governments, China has proposed a new policy called Off-Office Audit of Natural Resource Assets (OANRA) targeting local leaders. However, how this policy affects incentives for land use behavior remains understudied. Treating the policy pilot as a quasi-natural experiment, based on the staggered DID method and micro-level land leasing data, we investigate how OANRA changes local government land leasing behavior. The study finds that after the implementation of OANRA, the scale of local land leasing significantly decreased, with a further acceleration nearing the end of the term. This may be attributed to OANRA alleviating fiscal and political incentives that drive land leasing impulses. More directly, the regulatory effect of OANRA reduces non-compliant land leasing by local officials. Interestingly, OANRA also unexpectedly induces officials to become lazy, deterring some compliant land leasing. Our findings provide insights into understanding incentives for land use behavior and better incentivizing local officials to properly utilize and protect land resources.