[Paper Review] Anticorruption Enforcement and Sale Mechanism Choice in China's Land Market

Julia Manso|arXiv (Cornell University)|Feb 27, 2026

Land Rights and Reforms0 citations

TL;DR

The paper uses marginal structural models with fixed effects in IPTW to estimate causal effects of corruption indictments on land sale method choice (listing vs. auction) and on land prices in China, finding indictments reduce listings and increase prices.

ABSTRACT

Upon taking office in late 2012, Chinese President Xi Jinping launched one of the most intensive anticorruption campaigns in the history of the People's Republic of China. Prior to the campaign, China's land market suffered from corruption, particularly surrounding sale method selection (auction versus listing). Listing is a two-stage sale mechanism that prior research has identified as more susceptible to corruption, leading to lower prices. This paper examines the campaign's impact on land allocation, focusing on whether corruption influences the choice of sale method and, in turn, land sale prices. This paper is the first to utilize Blackwell and Yamauchi (2021, 2024)'s marginal structural model with fixed effects in the inverse probability of treatment weighting model; absorbing time-invariant unobserved confounding and utilizing a set of time-varying covariates as controls, this model can estimate causal effects in the land sale case. I find that indictments in a prefecture cause a statistically significant drop in the probability that land is sold via listing$\unicode{x2014}$an effect that is further compounded when indictments occur in consecutive months. Sensitivity analyses indicate that any violations of the identification assumptions would bias estimates towards zero, confirming the negative effect. A second marginal structural model shows that both mean and median land sale prices increase in the presence of indictments. Together, these results suggest that the anticorruption campaign not only deterred actual corrupt allocation practices, but also impacted the discretionary use of listings.

Motivation & Objective

• Assess whether corruption indictments affect the choice between listing (two-stage) and auction sale methods for land in China.
• Estimate how corruption indicators influence land sale prices (mean and median).
• Apply marginal structural models with fixed effects in inverse probability of treatment weighting to control time-varying confounders and unobserved time-invariant factors.
• Demonstrate robustness of findings through sensitivity analyses to the identification assumptions.

Proposed method

• Use corruption indictments at the prefecture level as the treatment and land sale method as the outcome (listing vs. auction).
• Employ marginal structural models (MSMs) with unit-level fixed effects in the IPTW framework to absorb time-invariant unobserved confounding.
• Construct weights using IPTW to estimate causal effects in the presence of time-varying covariates.
• Estimate both mean and median land sale prices as outcomes in a follow-up MSM.
• Perform sensitivity analyses to assess potential violations of identification assumptions.

Experimental results

Research questions

• RQ1 Do prefecture-level corruption indictments reduce the probability that land is sold via listing (two-stage auction) relative to other methods?
• RQ2 Do corruption indictments affect land sale prices (mean and median) when controlling for sale method and other covariates?
• RQ3 Are there cumulative or sequential-month effects of indictments on sale method and prices?
• RQ4 How robust are the findings to potential violations of the MSM identification assumptions?

Key findings

• Indictments in a prefecture cause a statistically significant drop in the probability that land is sold via listing, with a 1.16 percentage point decrease in the probability of any listings.
• The negative effect on listings accumulates when indictments occur in consecutive months, leading to a larger cumulative drop over a five-month window (7.78 percentage points).
• A separate MSM shows that mean and median land sale prices rise in the presence of indictments, with a prefecture indictment in a given month/year causing about a 6.78% increase in the mean price per square meter (and a similar increase for the median).
• Sensitivity analyses suggest that violations of identification assumptions would bias estimates toward zero, reinforcing the reported negative effect on listings and positive effect on prices.