“Busting the “Princelings”: The Campaign Against Corruption in China’s Primary Land Market”

“Busting the “Princelings”: The Campaign Against Corruption in China’s Primary Land Market”

Ting Chen and James Kai-sing Kung

In: The Quarterly Journal of Economics, Volume 134, Issue 1, Pages 185–226

Using data on over a million land transactions during 2004–2016 where local governments are the sole seller, the authors find that firms linked to members of China’s supreme political elites—the Politburo—obtained a price discount ranging from 55.4% to 59.9% compared with those without the same connections. These firms also purchased slightly more land. In return, the provincial party secretaries who provided the discount to these “princeling” firms are 23.4% more likely to be promoted to positions of national leadership. To curb corruption, President Xi Jinping stepped up investigations and strengthened personnel control at the province level. Using a spatially matched sample (e.g., within a 500-meter radius), Chen and Kung find a reduction in corruption of between 42.6% and 31.5% in the provinces either targeted by the central inspection teams or whose party