CHINESE POLITICAL LEADERSHIP AND ECONOMIC DEVELOPMENT
2018/2019, Semester 1
Lee Kuan Yew School of Public Policy (Lee Kuan Yew School Of Public Policy)
Modular Credits: 4
This course seeks to explore the role of political leadership in economic policy and performance. It starts with a discussion of politics at the central level and introduces the merits and problems in the Chinese economic context. Students will be exposed to two major debates about control mechanisms in managing central-local relations: fiscal decentralization and promotion tournament. They will critically engage these two theories by examining some recent empirical works. This course concludes with four important issues facing today’s Chinese economy: urbanization, pollution, financial policy and corruption. Students will gain insights about policies that are crucial to China’s future growth.
PP5198 Chinese Political Leadership and Economic Development
2108/2019 SEMESTER 1
Tuesdays, 2:00-5:00 pm, SR 2-3
Lecturer: Dr. Xi Lu
Office: Tower Block 10-01G
Office hour: Wednesdays 1:00-3:00 pm, or by appointment
In order to understand economic policy and performance, scholars have become increasingly interested in the role of political leadership. Some scholars discovered high-quality political leaders increase economic performance while low competence results in economic disasters. Students of Chinese political economy have also turned toward to this mode of thinking to explain the miracle of Chinese economy in the past decades. This module seeks to explore this burgeoning literature. We start with a discussion of politics at the central level. We introduce the concept of factionalism in the Chinese political context and debate the merit and problems with this analytical tool. The discussion will be followed by historical examples such as the Great Leap Famine and the Cultural Revolution. In the next segment, students will be exposed to two major debates about control mechanisms in managing central-local relations. One school of thought claims that local officials are revenue maximizers, therefore, the central government shapes the local officials’ incentive for growth by adjusting the revenue formula. The other group, however, insists that local leaders are first and foremost political maximizers. As a result, the central government uses career promotion to stimulate local economic performance. We critically engage these two arguments by examining some recent empirical works. Finally, we conclude the course with four important issues facing today’s Chinese economy: regional inequality, urbanization, pollution and corruption. These cases provide a rich context to apply the previous theories to specific issue areas. In addition to evaluating the merits and deficiency of those theories, students gain insights about policies that are crucial to China’s future growth.
This course has a narrower theoretical focus. Instead of treating Chinese transition and reform as a historical process, we dive into one analytical angle and fully explore political officials’ economic and political incentives. This angle allows students to look at Chinese economic development from a fresh perspective. In a way, we complement the standard economic approach to Chinese economy that is the basis of PP5176.
1. Students will become familiar with
literature in politics of economic growth and development. China is an excellent case for engaging this.
2. Through class discussion, students will gain a fresh perspective
the Chinese market transition and economic growth. In addition to market factors, they will appreciate the political logic behind various policy changes and understand how China marched on this political path of development.
3. Students will get familiar with some basic quantitative analytic tools and learn how to apply them to the research of political economy.
4. Students will carry out their own research project, identify a research question, formulate an argument and collect empirical evidence.
5. Students will present their work and learn how to take the advantage of constructive comments to improve their own research.
Lecture + Seminar/Reading group-style
There is no required textbook for this module. Readings will be posted onto the course website (IVLE).
In-class presentation (30%)
Term project presentation (20%)
Final Project Essay (40%)
Students are responsible for attending each class and actively participating in class discussions. Please come to class prepared, i.e. having done the assigned readings, and contributing to the discussion and debate in class. No need to worry about your first two absences which will be exempted. Be sure to notify me by email before you have to miss any of the classes.
Our module works in a way like a seminar or a reading group. Each student has to present an article from our required readings once a semester. Each presentation will last for an hour. You are expected to summarize the article, go over all the important details, make necessary comments and lead your classmates in a brief discussion. I will help you prepare for the presentation if necessary. You are welcome to discuss with me by appointment. Presentations should use PowerPoint or equivalent.
Term project (presentation & essay)
As a substitution of in-class exams, each student is required to finish a research project which includes a term essay as well as a presentation. The essay could be a criticism, comment or re-examination to any paper discussed in the class; or it could be a new topic as long as the topic is related to our module. A good essay should reflect not only a critical understanding of the selected issue, but more importantly your own analysis based on original thinking. Both the methods – quantitative and qualitative – will be treated equally. Be sure to determinate your topic in consultation with me.
To avoid the heavy workload in the end of each semester, I highly recommend starting your project as early as you can. Each student is required to make a presentation of his/her own project in the last week’s class. Though you do not have to finish the essay at that time, but you are expected to present your idea and your progress clearly. For example, if you chose to finish an empirical work, it should be the time to have your basic data description prepared.
The final essay is due on Friday, Nov 30, not to exceed 10 pages with normal margins, Times New Roman size 12 font, double spaced.
Politics at Central Level I: Factionalism and the Great Leap Famine
Yang, Dali L., and Fubing Su. "The politics of famine and reform in rural China."
China Economic Review
9.2 (1998): 141-155.
Frank Dikotter. 2010.
Mao’s Great Famine: The History of China’s Most Devastating Catastrophe
Arcand, Jean-Louis, Ran Tao, Huayu Xu and Dali Yang. 2016. “Autocracy, Political Loyalty and the Causes of the Great Leap Famine.”
Nathan, Andrew J., 1973. “A Factionalism Model for CCP Politics.”
The China Quarterly
Politics at Central Level II: Deng Xiaoping’s Gradual Reform
WuDunn, Sheryl. 1995. “Chen Yun, a Chinese Communist Patriarch Who Helped Slow Reforms, Is Dead at 89.”
The New York Times
Xie, Yinxi, Yang Xie. 2017. “Machiavellian Experimentation.”
Journal of Comparative Economics
Gregory C. Chow,
China’s Economic Transformation
edition, Wiley, 2015.Chapter 3.
Leong H.Liew, 1995. “Gradualism in China’s Economic Reform and the Role for a Strong Central State.”
Journal of Economic Issues
Central-Local Relations I: Federalism and Decentralization
Montinola, Gabriella, Yingyi Qian, and Barry R. Weingast. 1995. “Federalism, Chinese style: the political basis for economic success in China.”
Jin, Hehui, Yingyi Qian, and Barry R. Weingast. 2005. “Regional decentralization and fiscal incentives: Federalism, Chinese style.”
Journal of public economics
Huang, Yasheng. 1996. “Central-local relations in China during the reform era: the economic and institutional dimensions.”
Central-Local Relations II: Recentralization and A Tournament Hypothesis
Wong, Christine PW. 2000. “Central-local relations revisited the 1994 tax-sharing reform and public expenditure management in China.”
Li, Hongbin, and Li-An Zhou. 2005. "Political turnover and economic performance: the incentive role of personnel control in China."
Journal of public economics
Qian, Yingyi and Chenggang Xu. 1993. “Why China's economic reforms differ: the M-form hierarchy and entry/expansion of the non-state sector.”
Economics of Transition
Elite Politics in China
Maria Edin. 2003. “State Capacity and Local Agent Control in China: CCP Cadre Management from a township Perspective”.
Shih, Victor, Christopher Adolph and Mingxing Liu. 2012. “Getting Ahead in the Communist Party: Explaining the Advancement of Central Committee Members in China”.
American Political Science Review
, 106: 166-187.
Debate: Factionalism or Tournament?
Kung, James and Shuo Chen, 2011, “The Tragedy of the Nomenklatura: Career Incentives and Political Radicalism during China’s Great Leap Famine”.
American Political Science Review
, 105(1): 27-45
Yang, Dali, Huayu Xu and Ran Tao, 2014. “A Tragedy of the Nomenklatura? Career Incentives, Political Loyalty and Political Radicalism during China's Great Leap Forward”.
Journal of Contemporary China,
Su, Fubing, et al. 2012. “Local officials’ incentives and China’s economic growth: tournament thesis reexamined and alternative explanatory framework.”
China & World Economy,
Guo, Gang. 2009. “China's local political budget cycles.”
American Journal of Political Science
Regional Competition and Inequality
Cai, Hongbin, and Daniel Treisman. 2005. “Does competition for capital discipline governments? Decentralization, globalization, and public policy.”
The American Economic Review
, 95(3): 817-830.
Zhang, Xiaobo. 2006. “Fiscal decentralization and political centralization in China: Implications for growth and inequality.”
Journal of comparative economics
, 34(4): 713-726.
Tsui, Kai-yuen. 2005. “Local tax system, intergovernmental transfers and China’s local fiscal disparities.”
Journal of Comparative Economics
, 33(1): 173-196.
Urbanization and the Chinese Land Market
Tao, Ran, et al. 2010. “Land leasing and local public finance in China’s regional development: Evidence from prefecture-level cities.”
Chen, T. and James Kung. 2016. “Do Land Revenue Windfalls Create a Political Resource Curse? Evidence from China.”
Journal of Development Economics
Ong, Lynette H. 2014. “State-led urbanization in China: Skyscrapers, land revenue and ‘concentrated villages’.”
The China Quarterly
Environment and Pollution
Jia, Ruixue. 2012. “Pollution for promotion.”
University of California, San Diego, Working paper
Zheng, Siqi, et al. 2014. “Incentives for China’s urban mayors to mitigate pollution externalities: The role of the central government and public environmentalism.”
Regional Science and Urban Economics
Chen, Yuyu, et al. 2012. “Gaming in air pollution data? Lessons from China.”
The BE Journal of Economic Analysis & Policy
Corruption and Anti-corruption
Taking China's Anticorruption Campaign Seriously.
Lu, Xi and Lorentzen, Peter L., 2016. “Rescuing Autocracy from Itself: China's Anti-Corruption Campaign”.
Svolik, M. 2012.
The Politics of Authoritarian Rule
. Cambridge University Press. Chapter6.
Wedeman, Andrew. 2012.
Double paradox: Rapid growth and rising corruption in China
. Cornell University Press.
Summary: The China Model
Xu, Chenggang. 2011. “The fundamental institutions of China's reforms and development.”
Journal of Economic Literature
, 49(4): 1076-1151.
Jia, Ruixue, Masayuki Kudamatsu, and David Seim. 2015. “Political selection in China: The complementary roles of connections and performance.”
Journal of the European Economic Association
Bell, Daniel A. 2016.
The China model: Political meritocracy and the limits of democracy
. Princeton University Press.
Term Project Final Presentation
Workload Components : A-B-C-D-E
A: no. of lecture hours per week
B: no. of tutorial hours per week
C: no. of lab hours per week
D: no. of hours for projects, assignments, fieldwork etc per week
E: no. of hours for preparatory work by a student per week