Violation of land laws has been a repeated emergence problem in China for a long time. From the perspective of efficiency losses resulting from the constraint of examination and approval, this paper analyzes the cause of violation of land laws which is named as encroachment of land without approval. Through the theoretical analysis, we analyze the system of investment project examination and approval, & the system of land use, and conclude the unreasonableness in the system design. Then we review the linkage between the constraint of examination and approval, efficiency losses and violation of land laws, and infer that violation of land laws can be considered as a strategy by hook or by crook to offset the efficiency losses. On this basis, we raise the working hypothesis: the behavior encroachment of land without approval, which breaks through the examination and approval system, can make up the efficiency losses because of the constraint of the examination and approval system. So the behavior encroachment of land without approval can be described as a strategy by hook or by crook to offset the efficiency losses. In the empirical part, this paper uses the panel data from 1999 to 2013 at provincial level and stochastic frontier model to complete the empirical test. And the result of the stochastic frontier model shows that the size of the encroachment of land without approval is negatively correlated with efficiency losses, which is significant at the 1% level. It means the size of the encroachment of land without approval can reduce efficiency losses. So we can confirm the working hypothesis. Then we can draw the conclusion: at the situation that the examination and approval procedures about the construction project are too tedious and time-consuming, a breakthrough in the overly strict examination and approval system by the encroachment of land without approval, can make up efficiency losses resulting from the examination and approval system. Because of the existence of this kind of the earnings from the violation of land laws, we can understand why the behaviors of the violation of land laws are so hard to be wiped out. Therefore, current examination and approval system not only harms the efficiency, but also promotes the behaviors of the violation of land laws. What’s the most important, we should declare that the purpose of this paper is, of course, not to defend behaviors of the violation of land laws. The key point of this paper focuses on the excessive and strict examination and approval system and the efficiency losses because of the examination and approval system. The behaviors of the violation of land laws can solve the efficiency losses partly, but illegal way is not an option, and they obviously do not obey the basic idea of " law-based governance”. Therefore, countermeasures should be taken to continue to push forward current administrative examination and approval system reform in China, and reform the unreasonable system design. So the conclusions of this paper have the powerful policy meanings: as we can see, China’s examination and approval system is facing the institutional crisis. Whether at efficiency level or at the rule-of-law level, we must persist in the relevant reformation of the examination and approval system. On the one hand, we should advance the streamline administration and delegate power to the lower levels; on the other hand, we should aim at the examination and approval procedures which are necessary, and the institutional innovation which can make the whole procedure become more flexible.