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.