Embedded Interests and the Managerial Local State: Methanol Fuel-Switching in China

Journal of Contemporary China, Volume 22, No. 80, 204-218.

26 Pages Posted: 27 Jan 2011 Last revised: 23 Feb 2014

See all articles by Genia Kostka

Genia Kostka

Freie Universität, Berlin

William R. Hobbs

Cornell University

Date Written: March 1, 2013

Abstract

This paper analyzes the determinants of alternative automobile fuel regulation and development support with a particular focus on methanol fuel. We find that embedded interests, bureaucratic reforms, and political circumstances in the Chinese national, provincial, and municipal governments have all shaped policy outcomes in this area. The paper seeks to explain why at, the national level, support for alternative fuels has waned and finds that the concerns of state oil majors and disorganization during the process of national bureaucratic restructuring have been the deciding factors. Interestingly, at the sub-national level promotion of methanol continues unabated in some places. At the local level, business relationships as well as the embedded economic and personal interests of local leaders help to explain managerial local government behavior and sheds light on why government officials actively create and manage methanol fuel business opportunities through local standardization, subsidies, and hands-on management of SOE opposition. The switch towards methanol fuel was more successful in localities where individuals, either government officials or enterprise managers, formed an alliance and made this their ‘pet projects’. The analysis draws on 55 interviews conducted between June and October 2010 in Shanxi, a major coal-producing province which has supported methanol fuel-switching programs for over ten years. The findings contribute to debates about the condition of the local state in China. The argument put forward in this paper is that because of limited state capacity at the central level and insufficient concerns for the development of alternative fuels in the short-term, some sub-national governments with strong embedded interests promote certain alternative fuels by taking on active managerial roles, adopting creative and ad-hoc strategies to fill in the national level policy gap at the local level.

Keywords: China, local state, policy implementation, energy policy, governance, alternative fuel

JEL Classification: D73, D78, O18, R58, Q48, Q58, Q42

Suggested Citation

Kostka, Genia and Hobbs, William R., Embedded Interests and the Managerial Local State: Methanol Fuel-Switching in China (March 1, 2013). Journal of Contemporary China, Volume 22, No. 80, 204-218., Available at SSRN: https://ssrn.com/abstract=1748924 or http://dx.doi.org/10.2139/ssrn.1748924

Genia Kostka (Contact Author)

Freie Universität, Berlin ( email )

Boltzmannstr. 3
Berlin, 14195
Germany

William R. Hobbs

Cornell University

Ithaca, NY 14853
United States

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