Collective Leadership, Career Concern, and the Housing Market in China: The Role of Standing Committees

13 Pages Posted: 29 Jan 2016

See all articles by Nan Gao

Nan Gao

Zhongnan University of Economics and Law

Cheryl Xiaoning Long

Xiamen University

Lixin Colin Xu

World Bank

Date Written: February 2016

Abstract

Despite an emerging literature on political determinants of economic performance, little is known about whether standing committees of the Communist Party, an institution of collective leadership, matter for economic development. Using Chinese provincialā€level panel data, we find that a higher ratio of new members in the standing committee of the local Communist Party is correlated with a higher housing sales/gross domestic product (GDP) ratio. Moreover, more new members in the standing committee are also associated with a lower level of GDP per capita and a lower manufacturing output growth rate. The results on the size of the real estate sector are robust to dealing with the endogeneity of the ratio of new standing committee members. Our findings suggest that career incentives of party leadership affected real estate development at the expense of manufacturing growth in the locality, and that the structure of collective leadership has important economic consequences.

Suggested Citation

Gao, Nan and Long, Cheryl Xiaoning and Xu, Lixin Colin, Collective Leadership, Career Concern, and the Housing Market in China: The Role of Standing Committees (February 2016). Review of Development Economics, Vol. 20, Issue 1, pp. 1-13, 2016, Available at SSRN: https://ssrn.com/abstract=2724278 or http://dx.doi.org/10.1111/rode.12202

Nan Gao (Contact Author)

Zhongnan University of Economics and Law

No.143, Wuluo Road
Wuhan, Hubei 430073
China

Cheryl Xiaoning Long

Xiamen University ( email )

Xiamen, Fujian 361005
China

Lixin Colin Xu

World Bank

1818 H Street, NW
Washington, DC 20433
United States

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