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TitleThe Politics of Social Spending in China: The Role of Career Incentives
AuthorLiu, Ta-wei
UniversityU.C. San Diego
Thesis typePh.D
DisciplinePolitical science
Number of pages182
AbstractHow does an authoritarian regime like China’s ensure social welfare provision at
the local level when there is no democratic accountability? Moreover, when local
politicians are granted discretion to administer social policy, why do some follow the
Center and increase social spending, while others ignore the central directive and spend
money on other types of programs instead? Based on quantitative and qualitative data
collected during 14 months of field research, I find that there is still accountability in
China, but it works indirectly through the Center based on politicians’ career ambitions.

Ambitious provincial officials—those who seek to advance their careers at the central
level—comply with central government mandates with respect to social welfare provision
in order to impress Beijing and increase their chances for promotion. The evidence also
suggests that politicians in China provide social goods in response to the demands of
labor and to prevent labor unrest. Local officials would rather provide social security and
welfare than education or health because “almost all protests are triggered by laborers
unhappy about social security and welfare” (city official). Finally, contrary to what we
expect, a province does not necessarily increase social welfare provision as the resources
available to the province increases. Data shows that a 10% annual growth rate only
results in a 0.6% increase in the province’s social spending (as a share of total budget),
while a 10% increase in provincial tax revenue actually reduces the provincial social
spending by 7.4%. But when there is an ambitious provincial leader in the province,
he/she increases the social spending (as a share of total budget) by at least 12.5%. As a
sharp comparison, the demography and unemployment rate in a province do not explain
how much the province spends on social policy. These findings show that the decision on
social spending is not based on the people’s need or the economic capability of the
government, but the career incentives of the politicians.

Keywords (en)China;social welfare;tax;marketization;demography;reform;health;pension;education;unemployment;social benefits;career;incentive;Guangdong;policy;Liaoning;time-series;Henan
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