Land revenue and government myopia: Evidence from Chinese cities

While the impact of land revenue has been widely analyzed, there is little empirical research on the impact of land revenue on government planning horizon, especially government myopia. In response, this study investigates the effects of land revenue on local government myopia within the context of the land leasing system in China. Measuring government myopia with textual analysis and machine learning, we empirically test the hypothesis based on a two-way fixed effects model and a series of robustness checks with instrumental variables (IV) in addressing endogeneity. Our results indicate that local governments with larger land revenue tend to be more myopic, and the greater uncertainty of land revenue increases the likelihood of government myopia, with the evidence that local governments prioritize short-term economic growth over long-term investments in social welfare.