| Abstract: | This paper examines how power struggle among cliques within ruling parties shape public policies. We develop a simple model of bargaining among ruling elites to study government staffing and use it to explain why the number of subnational government staff in China has increased rapidly despite repeated government streamlining programs initiated by the central authority. Using provincial‐level panel data in China from 1992 to 2011, we show that the subnational government headed by a politically weaker party secretary, in terms of the size of the opposition of elites in the provincial standing committee, tends to have a larger number of senior cadres and public employees. Notably, the party secretary's power from the centre mitigates the tendency to expand government staff. We also provide suggestive evidence that the local government finances government expansion by selling more land. |
