The Band or the Baton: What Drives China’s Local Governments to Pursue Growth?
摘要
China’s local governments are often considered the keys to its economic success. Scholars’ answers vary significantly, however, regarding local governments’ motivations towards growth. The dominant explanation, promotion tournament, stresses pressure from above while the alternative view, fiscal federalism, highlights the local level’s own aspirations. The debate resists resolution because growth impulses could originate from either or both external and internal sources. This longstanding debate could be addressed with the new empirical leverage provided when China’s State Council announced the National Project of Main Function-Based Zoning in 2011, stipulating that local governments are to be evaluated based on their assigned main functions. Cadres of diverse locales thus face divergent performance criteria: some are still held accountable for growth; others are now responsible for environmental preservation. Confronting this quasi-natural experimental setting, this study first affirms the alignment of performance criteria and assigned functions. Then, using a staggered differences-in-differences (DID) model, it finds that even in regions no longer pressured to maximize growth, growth rates have not significantly slowed down. In contrast to the expectations of promotion tournament, this finding suggests China’s local governments have intrinsic aspirations for growth. The grassroots level band is at least a strong complement to the bandleader’s baton and deserves further investigation.