Local Political Chief Turnover and Economic Growth: Evidence from China

36 Pages Posted: 15 Aug 2018

See all articles by Hao Li

Hao Li

Tsinghua University - Hang Lung Center for Real Estate

Keyang Li

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Date Written: July 31, 2018

Abstract

It is widely believed that the rotation and promotion system of local political chiefs plays an important role in China’s economic miracle. In this paper, however, we focus on the potential cost of the inherent frequent turnovers of local chiefs. Based on a new manually-collected dataset on prefectural-level local chiefs between 1983 and 2012, our empirical results suggest that Chinese Communist Party (CCP) chief turnover would lead to a 0.35 percentage points decrease of local GDP growth rate in the current year, and 0.23 percentage points decrease in the following year. This effect especially concentrates on government-controlled fields, such as investment, fiscal revenue and expenditure. We also provide evidences that the organization friction, especially the successor CCP chiefs’ unfamiliarity with the city and the colleagues, is a major reason of such negative turnover effect.

Keywords: Local Official Turnover, Economic Growth, Organization Friction, China

JEL Classification: J63, O43, R50

Suggested Citation

Li, Hao and Li, Keyang and Wu, Jing, Local Political Chief Turnover and Economic Growth: Evidence from China (July 31, 2018). Available at SSRN: https://ssrn.com/abstract=3223280 or http://dx.doi.org/10.2139/ssrn.3223280

Hao Li

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

Keyang Li

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

Jing Wu (Contact Author)

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

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