Enthusiastic Policy Implementation and Its Aftermath: The Sudden Expansion and Contraction of China's Microfinance for Women Program

China Quarterly, No. 234 (June 2018): 506-26

34 Pages Posted: 25 Jun 2018

See all articles by Yanhua Deng

Yanhua Deng

Department of Sociology, Nanjing Universtiy

Kevin J. O'Brien

University of California, Berkeley - Charles and Louise Travers Department of Political Science

Jiajian Chen

Southwestern University of Finance and Economics (SWUFE)

Date Written: June 22, 2018

Abstract

China scholars have explored shirking by local officials and “effective implementation,” but fewer have examined polices that are implemented with great enthusiasm. The Microfinance for Women Program fits in this last category. Especially in Sichuan, targets for lending were set by the province, exceeded, raised by cities and counties, and then exceeded again. The immediate reason that loan-making took off in 2012 was the relaxation of collateral requirements that shifted the risk of defaults away from local authorities. But the surge in lending also had deeper roots in the policy’s vagueness, institutional incentives, bureaucratic pressure, and local fiscal and organizational interests. Although enthusiastic implementation occurred (and generated much-needed revenues for local governments), the history of the program also shows that it can be halted, as the authorities did when instability loomed and they reversed bureaucratic pressure by calling for local cost-sharing and introducing uncertainty over whether interest subsidies would continue.

Keywords: Microfinance, Policy Implementation, Policy Vagueness, Career Incentives, Bureaucratic Pressure, Organizational Interests, Women’s Federation, China

JEL Classification: G23, O38, O53, O43, O17, P30, G38, E65, D10

Suggested Citation

Deng, Yanhua and O'Brien, Kevin J. and Chen, Jiajian, Enthusiastic Policy Implementation and Its Aftermath: The Sudden Expansion and Contraction of China's Microfinance for Women Program (June 22, 2018). China Quarterly, No. 234 (June 2018): 506-26, Available at SSRN: https://ssrn.com/abstract=3201218

Yanhua Deng

Department of Sociology, Nanjing Universtiy ( email )

No. 163, Xianlin Avenue, Qixia
Nanjing, Jiangsu 210023
China

Kevin J. O'Brien (Contact Author)

University of California, Berkeley - Charles and Louise Travers Department of Political Science ( email )

210 Barrows Hall
Berkeley, CA 94720
United States

Jiajian Chen

Southwestern University of Finance and Economics (SWUFE) ( email )

Zhizhi Zone 236, 555 Liutai Avenue
Wenjiang District
Chengdu, Sichuan 611130
China

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