How local leaders matter: Inter-provincial leadership transfers and land transactions in China

We study how local leaders matter for economic growth by examining the impacts of exogenous transfers of leaders across China’s provinces on land transactions in the primary market. We find that new provincial leaders attract investment in industrial land from the provinces of their previous positions. The leaders’ impacts are greater when their freedom to deploy their business connections in the land market is greater. More importantly, we find evidence of positive impacts of land transactions on economic growth, which should bode well for the careers of the local leaders, albeit there is some evidence of rent seeking among officials especially when they are too old for further promotion.     

Familiarity breeds growth: The impact of factional ties on local cadres’ economic performance in China

Some attribute China's rapid economic growth to a cadre promotion system that rewards economic performance. Others argue that political promotion in China hinges on factionalism. Extant empirical studies often assume that performance can be measured independently from the effect of factionalism. We test the validity of this assumption by examining whether local cadres’ economic performance would change as a result of losing vertical ties to a higher authority. We find an immediate increase in the growth rates of local GDP and government revenue. However, the performance change is mediated by the type of succeeding leaders, as it occurs only under locally promoted leaders who have existing ties with the local cadres. We further examine various channels through which a leader's insider status may affect local economic performance and find that newly appointed outsider leaders would cut fiscal transfers to the local level, which may explain the drop in their short‐term performance.     

Pro‐social leadership under authoritarianism

Authoritarianism is regarded as being unaccountable for people's needs, but few studies have documented how authoritarian countries balance their policy goals. China is known to use a promotion system to incentivize local leaders to develop the economy, while neglecting social spending. This paper documents that more leaders having a liberal arts background have been promoted as top provincial leaders. After carefully ruling out other channels, we provide evidence that the shift of top provincial leaders’ college educational backgrounds from science/technology to liberal arts/social science has increased fiscal expenditure shares on science, education, culture and public health and cut economic construction expenditures accordingly. The finding is mainly driven by the post‐1994 period, when local leaders had stronger incentives for economic growth. This indicates that Chinese top authorities are promoting more pro‐social local leaders when providing pro‐growth incentives in general.     

地方官员更替与经济增长

改革开放以来,中国的省长、省委书记更替成为一种常态,现有文献忽视了其对辖区经济增长的影响,本文对此进行了探讨。在理论上,我们讨论了多种地方官员更替影响短期经济增长的机制,强调省长、省委书记更替会对辖区经济增长带来短期的负面影响。在实证上,我们采用1979—2006年间我国29个省区的官员更替样本进行检验。结果发现,省长省委书记更替对辖区经济增长有显著的负面影响;这种影响的程度因地方官员更替频率、更替的地方官员的年龄等因素的不同而不同;地方官员更替主要影响辖区的短期经济增长波动,并非长期经济增长趋势。本文的发现是稳健的,能够增进对如何现实省区经济平稳增长的理解。     

Crony capitalism,the party-state,and the political boundaries of corruption

We build a model that puts together crony capitalism, the hierarchy of the Chinese communist party-state, and the decision-making process inside the Party Center. We show that inefficient economic institutions create local corruption that raises realized productivity, while generating rents that flow along the party-state hierarchy up to the provincial level, threatening the Center’s control in potential crises. Although both stronger crisis control and higher economic performance help the Center’s goal to stay in power, we show that given a general fat-tailed risk of crisis, the Center will maximize crisis control at the expense of the economy when choosing its tolerance of local corruption. Power structure and corruption within the Center and reciprocal accountability between central and provincial leaders are also analyzed. Our analysis suggests conditions under which China’s communist regime will or will not deal with the existential threat presented by corruption.     

Rich or alive? Political (in)stability,political leader selection and economic growth

We develop a model that studies the incentives of the ruling elite regarding the selection of the political leader. We show that it is optimal for the ruling elite to choose leaders with more military experience in a politically unstable regime while more educated leaders are preferred in politically stable regimes. Using a dataset that includes 1569 national leaders from 177 countries over the period 1946–2011, we find empirical evidence that political stability contributes to the selection of more educated leaders, while the reverse holds for leaders with high military ranks. The empirical findings are robust to different subsamples, various proxies for educational and military attainment, and different measures for political stability. Our results suggest that leader selection is another reason why political instability is harmful for economic growth.     

The logic of hereditary rule: theory and evidence

Hereditary leadership has been an important feature of the political landscape throughout history. This paper argues that hereditary leadership is like a relational contract which improves policy incentives. We assemble a unique dataset on leaders between 1874 and 2004 in which we classify them as hereditary leaders based on their family history. The core empirical finding is that economic growth is higher in polities with hereditary leaders but only if executive constraints are weak. Moreover, this holds across of a range of specifications. The finding is also mirrored in policy outcomes which affect growth. In addition, we find that hereditary leadership is more likely to come to an end when the growth performance under the incumbent leader is poor.     

Incentive contracts and bank performance

This paper, using unique survey data from the banking industry in rural China, investigates the effect of incentive contracts on performance. In the context of China's economic transition, we find that the incentive contracts have a positive effect on the bank manager's performance in deposit taking and non‐performing loan reduction. This finding is robust when we control for the endogeneity of incentive contracts. Our empirical results present evidence on the positive effects of incentive‐based banking reforms in rural China.     

地方官员引领产业结构变动

新结构经济学在理论上揭示了发展中国家政府引领产业结构变动的可能性。本文构造了中国省级官员与四位数制造业产业结构变动相匹配的面板数据,系统分析省级官员对辖区产业结构变动的影响,结果发现,在1998-2007年间,平均而言,省委书记省长在短期内能引领辖区产业结构变动;其引领效应随任期增加而下降。本文的发现是相当稳健的,揭示了产业结构变动在短期可以靠官员,在长期主要靠市场。     

ON THE CONFLICT–POVERTY NEXUS

We develop a model to explore the inter-relationships between conflict and economic activity. We construct a simple two-period model where consumption and investment decisions are made in the presence of governments who consider initiating diversionary conflict to raise their chances of remaining in power. Economies with selfish leaders and lower gains from capital formation may fall prey to engaging in avoidable conflicts thereby lowering investment and hence future growth. Using panel data for over 152 countries from 1950 to 2000, we find evidence for conflict lowering economic growth and, after conditioning on the initial conditions of geography, private, public, and human capital investment, lower growth raising the likelihood of conflict. These results are broadly consistent with our model.     

中国省际经济增长的空间关联网络结构--基于非线性Granger因果检验方法的再考察

文章基于经济增长空间传导的非线性趋势,利用最新发展起来的非线性Granger因果检验技术,对中国省际经济增长的空间溢出关系进行了识别,并在社会网络分析框架下揭示了其网络结构特征。研究发现：（1）线性 Granger因果检验方法严重低估了中国省际经济增长的空间关联性,而采用非线性Granger因果检验方法不仅可以揭示出更多的空间关联关系,而且能够识别出更多可能的空间溢出渠道,这为提升中国经济增长的空间协同效应提供了更多的实证支持。（2）中国省际经济增长从整体上呈现出更紧密的、更稳定的网络结构形态,在中国省际经济增长的最大可能性网络（ML-Network）中没有任何一个省份能够“孤立”于整体网络。“不谋全局者,不能谋一域”,必须从全局的、整体的视角重新审视中国区域经济的协调发展,探寻并创造出更多的空间溢出渠道,发挥经济增长不同板块的不同功能,实现区域经济空间的协同发展。     

Fresh Cadres bring Fresh Air? Personnel Turnover,Institutions, and China's Water Pollutions

Weak law enforcement is usually blamed for the dramatic deterioration of the environment in China. Using a panel data covering 287 Chinese prefecture‐cities during 2004–2011, we investigate the role of personnel turnover and institutions in water pollution. We show that water pollution deteriorates with the tenure of incumbent mayors. Mayor turnover and institutional quality are associated with lower pollution. Furthermore, personnel turnover and institutions complement each other in mitigating pollution: the influence of mayor turnover on pollution reduction is larger in the cities endowed with stronger executive constraints. We also suggest some channels through which personnel turnover affects water pollution. In general, we illustrate that the turnover of cadres has only limited and temporary effects in mitigating pollution.     

Home Bias,Border Effect and Internal Market Integration in China: Evidence from Inter‐provincial Value‐added Tax Statistics

This paper examines the home bias in regional trade and the integration of the internal market in China using inter‐provincial value‐added tax statistics. The administrative border between regions is an important trade barrier that results in home bias. Using a border effect model, we find evidence of home bias in provincial trade and relatively low border effects in domestic‐products trade in China. Moreover, the multilateral resistance model, based on a microeconomic foundation, also has strong power in explaining border effects in provincial trade. The empirical results imply that in accordance with some developed economies, China's market integration appears to have reached a high level.     

What drags and drives mobility? Explaining Canada's aggregate migration patterns

Understanding the factors that determine the migration of labour between regions is crucial for assessing the response of the economy to macroeconomic shocks and identifying policies that will encourage an efficient reallocation of labour. Using a gravity model, Poisson pseudo‐maximum likelihood specifications and Census data for 69 economic regions, this article examines the determinants of aggregate migration within Canada from 1991 to 2006. Our results suggest that migration tends to increase with differences in labour market performance. We also find that provincial borders have the strongest impact on migration involving low‐populated regions and that distance is most important across provincial borders.     

地方官员引领产业结构变动

新结构经济学在理论上揭示了发展中国家政府引领产业结构变动的可能性。本文构造了中国省级官员与四位数制造业产业结构变动相匹配的面板数据,系统分析省级官员对辖区产业结构变动的影响,结果发现,在1998—2007年间,平均而言,省委书记省长在短期内能引领辖区产业结构变动;其引领效应随任期增加而下降。本文的发现是相当稳健的,揭示了产业结构变动在短期可以靠官员,在长期主要靠市场。     

中国财政分权、金融发展、 工业化与经济增长的省际差异

本文采用1978-2006年中国28个地区的省际面板数据建立了检验财政分权、金融发展、工业化与经济增长之间长期关系的协整模型（co integration model）,并采用完全修正的最小二乘法（FMOLS）对模型进行估计。本文把地方政府官员参与政治晋升锦标赛竞争的行为影响经济绩效的假设引入对分权化改革过程的分析,对中国改革开放以来地方政府之间的竞争何以在促成经济总量高速增长的同时又导致各地区在财政分权、金融发展、工业化和经济增长方面呈现出差异的原因进行了分析,进而得出本文的分析结论并对其政策含义进行了讨论。     

地方官员与经济增长——来自中国省长、省委书记交流的证据

通常认为地方官员在我国经济发展中扮演着积极角色,近来国家也有意通过干部交流促进省区平衡发展,但国内还没有定量识别地方官员影响经济增长的文献。本文基于1978—2005年间省长(书记)交流样本构造了省长(书记)与省区相匹配的面板数据,系统地实证分析省长(书记)交流对流入省区经济增长的影响(即省长交流效应),结果发现,整体而言,省长交流能够使流入地的经济增长速度提高1个百分点左右;这种省长交流效应是通过在流入地采取大力发展二产、重视一产、忽视三产的产业发展取向实现的。本文的发现是稳健的,有助于增进对加强干部交流破解省区发展不平衡的理解。     

The effects of trade,aid, and investment on China's image in Latin America

Using repeated cross-sectional survey data, we analyze whether China's growing economic engagement in Latin America has an effect on citizens’ perceptions of China within 18 Latin American countries over the 2002–2013 period. Our instrumental-variables regressions exploit exogenous variation in the supply of Chinese exports, aid, and investment. Specifically, we use China's market penetration of developing countries outside of Latin America as the instrumental variable. In contrast to the widespread criticism, we do not find evidence that China's growing economic activities in the respective countries diminish average attitudes towards China—neither at the national nor at the provincial level. However, China's economic engagement appears to contribute to more polarized opinions on China: more individuals develop either very positive or very negative opinions on China. We interpret this as suggestive evidence that China's economic engagement creates winners and losers.     

对外经济开放、区域市场整合与全要素生产率

本文在新增长理论的框架下,构建了一个对外经济开放和区域市场整合内生化全要素生产率的模型。在此基础上,利用中国1985—2008年的省际面板数据,采用工具变量两阶段最小二乘法(2SLS)实证检验了对外经济开放和区域市场整合对省际全要素生产率的影响。研究结果表明,对外经济开放和区域市场整合对中国省际全要素生产率都产生了显著的正向影响效应,而且二者存在替代关系。进一步的分析指出,在对外经济开放水平较高的沿海地区,区域市场整合对省际全要素生产率的影响效应较低,而在内陆地区则恰好相反。本文为理解中国省际全要素生产率的变化提供了新的视角,对后金融危机时代如何提升地区技术水平、转变经济增长方式也具有一定的启发意义。     

Has economic freedom fostered bank performance? Panel evidence from China

The impact of economic freedom on the well-being of the economy has been widely documented. Noticeably absent from the literature is empirical evidence on the impact of economic freedom on the banking sector. This article employs data on the Chinese banking sector and provides for the first time empirical evidence on the impact of economic freedom. We find evidence supporting far greater freedom for entrepreneurs to start businesses. The empirical findings seem to suggest that greater freedom of trade positively influences the performance of banks operating in the Chinese banking sector. However, the impact of the different dimensions of economic freedom is not uniform across Chinese banks with different ownership structures.