Who drives the formation and adoption of the "increasing versus decreasing balance policy"?-Evidence from a policy process analysis

The “increasing versus decreasing balance policy (IDB)” is an important land use innovation in China and it transfers developmental rights from less productive rural land to more productive urban construction land. Since its initiation in 2000, it was soon adopted in almost all provinces in China. In the process of transferring developmental rights, what roles do different levels of governments play and why? To answer these questions, this research conducts a policy process analysis by combing the methods of process tracing and multi-level event history analysis. It finds that the policy process of IDB is a bottom-up one. The prefectural level governments are the engine of the whole process for they gain direct benefit from the transfer of developmental right. Provincial governments, on the one hand, act as a hub connecting local to central; on the other hand, fail to regulate and supervise the implementation. Central government is pushed by the force from local to enact the policy of IDB but also shows lukewarm support to it with a concern that it might deviate from the Pareto increase and damaged peasants' wellbeing. This research explores the complicated inter-governmental relations in land policy-making process in China and also proposes policy implication on IDB's future implementation.