The Limits of Career Concerns in Federalism: Evidence from China

73 Pages Posted: 10 Feb 2015

See all articles by Petra Persson

Petra Persson

Stanford University; Research Institute of Industrial Economics (IFN)

Ekaterina Zhuravskaya

Paris School of Economics (PSE)

Multiple version iconThere are 2 versions of this paper

Date Written: February 2015

Abstract

Performance-based promotion schemes in administrative hierarchies have limitations. Chinese provincial leaders, despite facing strong career concerns, make different policy decisions depending on their career backgrounds. Provincial party secretaries who rose from low to high positions within the province they govern (locals) spend a higher share of budgetary resources on education and health care and invest less in construction infrastructure than party secretaries who made their most significant career advancements in other provinces (outsiders). Identification comes from variation in central leadership and term limits. As the promotion mechanism rewards infrastructure investments, locals are less likely to be promoted at the end of the term. We explore various mechanisms and provide evidence that the difference between locals and outsiders is not driven by knowledge or experience. Several pieces of evidence suggest that locals cater to low-level provincial elites, who helped them rise to power. Thus, local career trajectories limit the power of career concerns by fostering competing allegiances.

Keywords: autocracy, career concerns, China, federalism, hierarchies, public goods

JEL Classification: H11, H70, P26

Suggested Citation

Persson, Petra and Zhuravskaya, Ekaterina, The Limits of Career Concerns in Federalism: Evidence from China (February 2015). CEPR Discussion Paper No. DP10397. Available at SSRN: https://ssrn.com/abstract=2562922

Petra Persson (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Ekaterina Zhuravskaya

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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