2012 Conference

China and Inner Asia Session 319

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Revenue, Democratic Institutions, and Authoritarian Rule In China

Organizer: Hiroki Takeuchi, Southern Methodist University, USA

Chair: Martin Dimitrov, Tulane University, USA

Discussant: Hiroki Takeuchi, Southern Methodist University, USA

Like many of developing countries in the world, China’s authoritarian regime has given economic development the highest priority of the national goal while maximizing fiscal revenue that the regime can collect. Like many of authoritarian regimes in the world, it has established at least nominally democratic institutions to govern the nation. How do fiscal institutions and democratic institutions interact under China’s authoritarian regime? How do the central and local governments respond in the institutional constraints of the fiscal system and the political participation scheme when their interests contradict among the state actors (such as central-local inter-governmental relations) or among the different goals (such as economic development and political participation)? Each paper discusses the fundamental questions of revenue and rule that faces, and perhaps devils, China’s authoritarian regime. Yuen Yuen Ang examines an important puzzle in behavior of China’s local cadres: conducting predation while pursuing local economic development. Jing Vivian Zhan focuses on one of the fundamental issues in political economy—the resource course—and how natural resource endowment affects local governance and development in China’s institutional contexts. Tomoki Kamo and Hiroki Takeuchi discuss the functions and limitations of one of the major democratic institutions, local People’s Congresses and argue that the Prefectural People’s Congress that they analyze is the place the central and local interests interact. Finally, Martin Dimitrov discusses how China’s authoritarian regime has managed another major democratic institutions, the petition system (letters and visits system), for regime survival.

The Bureau-Contracting State: Incentives, Rents, and Development in Local China
Yuen Ang, University of Michigan, USA

A central puzzle in Chinese political economy has been the paradoxical economic behavior of local cadres: they appear to engage in growth-promoting efforts and petty predation simultaneously. How can we make sense of this paradox? If predatory activities were indeed widespread, then why had they not overwhelmed developmental efforts, at least thus far? This book identifies the micro fiscal incentives that drive local state actors’ economic behavior by focusing on the emergence of an informal public compensation system during the reform era. I show that local cadres are rewarded for both developmental and extractive strategies, but that the former pays off more than the latter in the long term. I also identify mechanisms devised to institutionalize rents extraction among local offices, part of a quasi-contracting system that distinguishes China from typical predatory bureaucracies. China’s institutional innovation suggests that, contrary to conventional wisdom, legal-rational but low-powered Weberian public bureaucracies may not be the only administrative ideal. At early stages of development, governments may choose to erect transitional administrative structures that, though risky and less-than-ideal, are economically and politically pragmatic. My findings are based on interviews with over 250 local cadres across regions and departments, as well as statistical analyses of previously unavailable data on sub-provincial public spending and cadre compensation in China. The paper I will present is the introduction chapter of my book manuscript.

Information Management and Regime Resilience in China
Martin Dimitrov, Tulane University, USA

How do communist regimes like China resolve the problem of information scarcity? Seminal theories in political science have argued that autocratic regimes that lack adequate information about popular preferences will be short-lived and unstable. But communist regimes are on average very resilient. This is especially true for China, where the communist party has been in power for more than six decades. Based on data obtained through fieldwork and archival research, this paper argues that China has developed elaborate systems for tracking public opinion. One avenue for doing so is the monitoring citizen complaints, which is the focus of this paper. In China, citizen complaints are handled by the letters and visits offices (xinfang ban) located at every level of the political system. By analyzing changes in the operation of the complaints system at three points in the development of the People’s Republic (during the Cultural Revolution; during the 1980s; and in the 2000s), this paper tracks how the leadership has fine-tuned the system to extract more information about popular preferences through it. The paper argues that the continued resilience of the Chinese regime depends not only on using the complaints system to track public opinion but also on responding to the redistributive preferences expressed by citizens through their complaints. In this light, recent trends that indicate diminished responsiveness to complaints have negative implications for regime stability.

Central-Local Relations in the Local People's Congresses in China
Tomoki Kamo, Keio University, Japan

As has been previously pointed out by a number of researchers, the People’s Congress, one of the major democratic institutions in China’s authoritarian regime, has become increasingly active, carrying out legislative activities and (supposedly) supervising state organizations. Based on the analysis of the bills submitted to one of the local People’s Congresses by the deputies, we find that along with the increased level of activity of the Congress, the deputies have increasingly represented interests and demands of the electoral districts from which they are elected, and the local People’s Congress has become a place to present and coordinate various competing interests from all electoral districts, which is often contradictory with interests of the local Communist Party Committee that represent the higher authority of the state. In other words, the local People’s Congress has become a place where two interests face each other: the “central” interests represented by the local Party Committee and the “local” interests represented by the local People’s Congress deputies.

The Effects of Resource Endowment on Local Governance in China: An Initial Assessment
Jing Vivian Zhan, Chinese University of Hong Kong, Hong Kong

Comparative studies suggest that the abundance of natural resources often contributes to underdevelopment and social conflicts in third-world countries. One major causal mechanism of resource curse, as some scholars point out, is that reliance on resources leads to bad governance and weak political institutions based on patronage that ignore the welfare and civil rights of the general public. However, others argue that resource endowment does not necessarily translate into weak institutions as political elites can invest windfall revenues from resource in building state capacity. How do natural resources affect the quality of local political institutions in China, a country that hosts a vast variety of resources? This paper explores the relationship between the endowment of mineral resources and local governance through case studies of selected localities in China. The findings suggest that under China’s peculiar political and fiscal systems, the presence of rich mineral resources does have adverse effects on local governance.