The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program

24 Pages Posted: 30 Jan 2017 Last revised: 9 Feb 2017

See all articles by Raymond J. Fisman

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Yongxiang Wang

University of Southern California - Marshall School of Business

Date Written: January 2017

Abstract

We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of ‘death ceilings’ that, if exceeded, would impede government officials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths, suggesting complementarities between incentives at different levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet effects in the setting of death ceilings.

Suggested Citation

Fisman, Raymond and Wang, Yongxiang, The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program (January 2017). NBER Working Paper No. w23098, Available at SSRN: https://ssrn.com/abstract=2907901

Raymond Fisman (Contact Author)

National Bureau of Economic Research (NBER)

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Boston University ( email )

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Yongxiang Wang

University of Southern California - Marshall School of Business ( email )

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Los Angeles, CA 90089
United States

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