Li和Zhou(2005)

Politicalturnoverandeconomicperformance:theincentiveroleofpersonnelcontrolinChinaHongbinLia,*,Li-AnZhoubaDepartmentofEconomics,TheChineseUniversityofHongKong,Shatin,N.T.,HongKong,P.R.ChinabGuanghuaSchoolofManagement,PekingUniversity,P.R.ChinaReceived14May2003;receivedinrevisedform23June2004;accepted23June2004Availableonline27September2004AbstractInthispaper,weprovideempiricalevidenceontheincentiveroleofpersonnelcontrolinpost-reformChina.EmployingtheturnoverdataoftopprovincialleadersinChinabetween1979and1995,wefindthatthelikelihoodofpromotionofprovincialleadersincreaseswiththeireconomicperformance,whilethelikelihoodofterminationdecreaseswiththeireconomicperformance.Thisfindingisrobusttovarioussensitivitytests.Wealsofindthattheturnoverofprovincialleadersismoresensitivetotheiraverageperformanceovertheirtenurethantotheirannualperformance.WeinterprettheseempiricalfindingsasevidencethatChinausespersonnelcontroltoinducedesirableeconomicoutcomes.Ourstudyaddssomebasicevidencetoagrowingtheoreticalliteratureemphasizingtheroleofpoliticalincentivesofgovernmentofficialsinpromotinglocaleconomicgrowth.D2004ElsevierB.V.Allrightsreserved.JEL:H11;H7;J63;P3Keywords:Politicalturnover;Economicperformance;Personnelcontrol1.IntroductionInthecourseofChina’sremarkableeconomicgrowthsincethelate1970s,localgovernmentofficialshavebeenplayinganactiveroleinbuildinglocalinfrastructure,0047-2727/$-seefrontmatterD2004ElsevierB.V.Allrightsreserved.doi:10.1016/j.jpubeco.2004.06.009*Correspondingauthor.Tel.:[phone];fax:[phone].E-mailaddress:[e-mail](H.Li).JournalofPublicEconomics89(2005)1743–1762(thebgrabbinghandQ)oflocalofficialsinothertransitionalanddevelopingcountries(Krueger,1974;FryeandShleifer,1997).TwoprincipalexplanationshavebeenputforwardforwhyChineseofficialsbehavesodifferently.Thefirst,basedonwhathascometobeknownasbmarket-preservingfederalismQ,arguesthatthepro-businessincentivesgiventoChineselocalofficialsarearesultofapolicyoffiscaldecentralizationandhigh-poweredintergovernmentalfiscalrevenue-sharingcontracts(Oi,1992;Montinolaetal.,1995;QianandWeingast,1997;Weingast,1995;Mckinnon,1997).1Employingprovincial-leveldata,Jinetal.(2000)findempiricalevidence,whichsupportsthefiscaldecentralizationview.However,amorerecentexplanationemphasizestheroleofpoliticalincentivesorcareerconcernsonthepartoflocalofficialsinChina.Accordingtothisview,thereadinessoftheChinesecentralgovernmenttorewardandpunishlocalofficialsonthebasisoftheireconomicperformancemotivatesthemtopromotethelocaleconomy(BlanchardandShleifer,2001).Therewardandpunishmentmechanismsaremadepossiblewithinthemultidivisional-form(M-form)structureoftheChineseeconomicsystem,whichallowsyardstickcompetitionamonglocalofficials(QianandXu,1993;Maskinetal.,2000).AlthoughanecdotalevidenceshowsthatChinesecadresareevaluatedinaccordancewiththeireconomicperformance(Whiting,2001),nosystematicbodyofempiricalevidencehasbeenpresentedontherelationshipbetweenthecareermobilityofChineselocalofficialsandtheireconomicperformance.Inthispaper,weprovideempiricalevidenceontherelationshipbetweentheturnoverofChineseprovincialleadersandtheireconomicperformanceinthepost-reformperiod.Usingtheorderedprobitmodel,wefindthatthelikelihoodofpromotionofprovincialleadersincreaseswiththeireconomicperformancewhilethelikelihoodofterminationdecreaseswiththeireconomicperformance.Thisfindingisrobusttovarioussensitivitytests.Wealsofindthattheturnoverofprovincialleadersismoresensitivetotheiraverageperformanceovertheirtenurethantotheirannualperformance.WeinterprettheseempiricalfindingsasevidencethatChinausespersonnelcontroltoinducedesirableeconomicoutcomes.OurpaperdrawsextensivelyonthegrowingempiricalliteratureonthepoliticalincentivesofgovernmentofficialsbothintheChinesecontextandingeneral.InastudyofthecomparativeadvantageofM-formvs.U-form,Maskinetal.(2000)findthatthepoliticalstatusofaChineseprovince(measuredbythenumberofCentralCommitteemembers)iscorrelatedwiththeprovincialeconomicranking.However,theydonotestablishadirectlinkbetweenthecareermobilityofprovincialleadersandtheireconomicperformance.2Inadifferentpoliticalsetting,BesleyandCase(1996)showthatthe1Somestudiesrelatethepositiveincentivesgiventolocalofficialstoanumberofothereconomicfactors,suchastheemergenceoflocalgovernmentownershipasacredibleinstitutionaldevicetoavoidstatepredation(CheandQian,1998)andinter-regionalcompetitionintheproductandcapitalmarkets(Lietal.,2000;QianandRoland,1998).2Also,theirsimpleregressionmaybesubjecttotheomittedvariablesbias.H.Li,L.-A.Zhou/JournalofPublicEconomics89(2005)1743–17621744economicperformanceofastaterelativetoneighboringstateshasapositiveimpactonthere-electionprospectsofUSgovernors.3Ourpaperisalsocloselyrelatedtotheempiricalliteratureonthecareerconcernsoffirmmanagers.Bothourmethodologyandfindingsaresimilartothoseofstudiesoncareerconcernsof