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Week 17 Reading Political Turnover And Economic Performance Notes

History And Economics Notes > Chinese Economic History Since 1850 Notes

This is an extract of our Week 17 Reading Political Turnover And Economic Performance document, which we sell as part of our Chinese Economic History Since 1850 Notes collection written by the top tier of London School Of Economics And Political Science students.

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Political turnover and economic performance: The incentive role of personnel control in China - (Li and Zhou, 2005)

Politcal turnover and economic performance: The incentve role of personnel control in China - (Li and Zhou, 2005) Introducton

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The strong pro-business role of Chinese local officials stands in stark contrast with the rent-seeking behavior ("the grabbing hand") of local officials in other transitional and developing countries (Krueger, 1974; Frye and Shleifer, 1997) "market-preserving federalism", argues that the pro-business incentives given to Chinese local officials are a result of a policy of fiscal decentralization and high-powered intergovernmental fiscal revenue-sharing contracts (Oi, 1992) Employing provincial-level data Jin et al., (2000) finds empirical evidence, which supports the fiscal decentralization view The role of political incentives or career concerns on the part of local officials in China is another explanation of why Chinese officials acted so differently o Readiness of the Chinese central government to reward and punish local officials on the basis of their economic performance motivates them to promote the local economy (Blanchard and Shleifer, 2001) o The multi-divisional form structure of the Chinese economic system allows a yardstick competition among local officials (Qian and Xu, 1993) Maskin et al. (2000) find that the political status of a Chinese province (measured by the number of Central Committee members) is correlated with the provincial economic ranking Besley and Case (1996) show that economic performance of a state relative to neighbouring states has a positive impact on the re-election prospects of US governors Groves et al. (1995): o In the 1980s, the Chinese industrial bureaus selected managers of stateowned enterprises (SOEs) on the basis of firm performance o Since Chinese SOE managers are semi-officials situated in the bureaucratic hierarchy, this manager selection rule reflects a general shift in personnel control since the late 1970s from the political criterion to the performance criterion

Internal career mobility and personnel control in China

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Five layers of the state administration: the centre, provinces, prefectures, counties and townships o The CCP acts as the HQ of this "multidivisional" system o Dual presence of the CCP and government organs at each level of China's political hierarchy

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