Voice and Exit as Accountability Mechanisms: Can Foot-Voting Be Made Safe for the Chinese Communist Party?

Abstract

According to Albert O. Hirschman’s famous dichotomy, citizens can express their preferences with their “voice” (by voting with ballots to elect better representatives) and “exit” (by voting with their feet to choose better places to live). Suppose, however, that ballot-voting is ineffective: Can exit not merely aid but also replace voice? Using as a case study the People’s Republic of China, a party state without elective democracy, we argue that exit is not a substitute for, but rather a complement to, voice. China’s bureaucratic promotion system plays the role of local elections in the United States, promoting or replacing local officials based on their performance in office. In either regime, however, it is costly for local voters (in the United States) or the Chinese Communist Party (in China) to monitor and assess local officials. Attention to foot-voting in the legal design of local government can help reduce these costs. By evaluating cadres who run the lower levels of China’s local governments on the basis of how successfully they attract mobile households, the central CCP authorities could reduce the costs of monitoring these local officials and thereby reproduce, by bureaucratic means, some of the benefits of electoral democracy. Success in attracting foot-voters can be most cheaply measured by the Party’s evaluating cadres primarily on the basis of local land values which, because they are a product of foot-voters’ decisions about where to live, function like ballots insofar as they reflect the popularity of local cadres’ policy decisions with mobile Chinese households. For foot-voting to improve governmental accountability, however, the Chinese system of local government law requires some basic but politically feasible reforms ― in particular, the introduction of a local property tax system, the creation of a federated city system that grants power and autonomy to sub-city units, and the liberalization of China’s household registration system to make the population fully mobile across different jurisdictions.

Keywords: Inter-Jurisdictional Competition, Land Value, Democracy, Foot-Voting, Government Accountability, Property Tax, Federated City, Household Registration System (Hukou), Cadre Evaluation, Chinese Communist Party

JEL Classification: K11, H11, H23, H70, H41, R12, R14, R30