corruption

RANDJournalofEconomics

Vol.44,No.3,Fall2013

pp.488–521

China’slandmarketauctions:evidence

ofcorruption?

HongbinCai

∗

Henderson

∗∗

and

QinghuaZhang

∗

InChina,urbanlandisallocatedbyleaholdsalesbylocaloffitingtoend

widespreadcorruption,thegovernmentnowrequiressalestobeconductedpublicly,byeither

Englishor“two-stage”r,corruptionpersiststhroughthechoiceofauction

formatandpreauctionsidedealsbetweenfavoredbiddersandlocaloffi-stageauctions

haveafirststagewherefavoreddeveloperssignalthatauctionsare“taken,”deterringentryof

csshowthatbothsalespricesandcompetitionaresignificantlylessfor

iononunobrvedpropertycharacteristicsispositive:

officialsdiverthotterpropertiestotwo-stageauctions.