The Spatial Optimization Effect of Urban Areas Resulting from the Expansion of Local Government Special Debt
HAN Ning1, LIU Peixian2
1. Center for China Fiscal Development, Central University of Finance and Economics, Beijing 102206, China; 2. Economics and Management School, Wuhan University, Wuhan 430072, China
Abstract Based on the panel data of 286 prefecture-level cities from 2015 to 2023, this study examines the impact of local government’s expansion of special debts on the urban spatial structure. The study shows that the expansion of local government special bonds can effectively optimize the urban spatial structure and promote the balanced polycentric development of cities. Mechanism analysis indicates that the expansion of the scale of special bonds optimizes the urban spatial structure through two pathways: improving urban infrastructure construction and advancing the upgrading of urban industrial structure. Heterogeneity analysis reveals that the spatial structure optimization effect of special debt expansion is more pronounced in cities closer to provincial capitals, those under lower fiscal pressure, cities located within urban clusters, non-central cities, smaller cities and cities with more abundant resources. Further analysis suggests that the allocation of special debt limits also has a significant effect on optimizing the urban spatial structure. Moreover, the expansion of the special debt scale has significantly promoted the multi-center balanced development of cities with a larger allocation of debt limits. The conclusions contribute to a deeper comprehension of the role played by fiscal policy instruments, such as local government special bonds and in optimizing urban spatial structure. The results hold important implications for leveraging proactive fiscal policy tools, facilitating new-type urbanization, and fostering regionally coordinated development.
HAN Ning,LIU Peixian. The Spatial Optimization Effect of Urban Areas Resulting from the Expansion of Local Government Special Debt. Economic Survey, 2026, 43(2): 0131.
2026, Vol. 43 
