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First in Command: Leaders, Political Institutions, and Economic Growth in China’S Counties

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First in Command: Leaders, Political Institutions, and Economic Growth in China’S Counties FIRST IN COMMAND: LEADERS, POLITICAL INSTITUTIONS, AND ECONOMIC GROWTH IN CHINA’S COUNTIES by David Janoff Bulman A dissertation submitted to Johns Hopkins University in conformity with the requirements for the degree of Doctor of Philosophy Baltimore, Maryland July 2014 © 2014 David J. Bulman All Rights Reserved David J. Bulman ABSTRACT In the mid-1990s, counties in China’s Anhui Province and the central and northern regions of Jiangsu Province had similar levels of development. Over the next two decades the Jiangsu counties grew much faster, becoming on average twice as rich as the Anhui counties. This dissertation develops a causal narrative explaining part of the regional variation in county outcomes by looking at the relationship between local leader economic roles, governance, and promotion incentives in an upwardly accountable political system. Relying on six in-depth county case studies as well as broader quantitative analyses, the dissertation seeks to answer three interrelated questions: What explains variation in China’s county-level economic outcomes? What is the role of County Party Secretaries in determining local growth outcomes? Why do County Party Secretaries emphasize particular developmental priorities? By selecting six counties that face each other across the Anhui/Jiangsu border, the study largely eliminates geographic, historical, and cultural explanations, focusing instead on divergent provincial institutions and policies. These mixed method approaches demonstrate the important economic roles played by County Party Secretaries in shaping the quality of local governance and the ability of counties to attract investment. Although this leadership role and the governance-growth relationship hold across provinces, the political promotion incentives given to county leaders vary. In Jiangsu, county leaders are promoted based on economic growth outcomes; these leaders have translated their personal promotion incentives into bolder and more creative local development ideas as well as stricter control over local cadres, all in an effort to improve local investment environments. In Anhui, authorities have been more concerned with maintaining social stability, leading to less courageous ii David J. Bulman and less innovative local approaches to governance and economic policy. Largely as a result of these contrasting provincial emphases, counties in Jiangsu have vastly outperformed their Anhui counterparts since the mid-1990s. These conclusions have important implications for the study of central-local relations in China and for the analysis of upwardly accountable political systems more broadly. Advisor David M. Lampton (Johns Hopkins School of Advanced International Studies) Committee members Pieter Bottelier (Johns Hopkins School of Advanced International Studies) Monica Martinez-Bravo (Centro de Estudios Monetarios y Financieros) Kellee S. Tsai (Hong Kong University of Science and Technology) Aart Kraay (The World Bank) iii David J. Bulman ACKNOWLEDGEMENTS While researching and writing this dissertation, many individuals and organizations have shaped my ideas, provided essential facilities and resources, and, most importantly, made the process rewarding and (dare I say?) downright enjoyable. First, I want to thank my dissertation committee members, Mike Lampton, Pieter Bottelier, Monica Martinez-Bravo, Aart Kraay, and Kellee Tsai, for their thoughtful comments and patience. Particular thanks go to Professor Lampton: in addition to molding my understanding of the Chinese political system, especially regarding central-local relations and the role of leaders, a student could not ask for a more helpful and gracious advisor. Professor Bottelier’s enthusiasm for sharing his unparalleled expertise and insights has made study of the Chinese economy both fascinating and enjoyable. Professor Martinez- Bravo helped generate the ideas in this dissertation through our original work on China’s county leaders. Along with helpful comments on the dissertation itself, Dr. Kraay has also been my mentor at the World Bank and, more than anyone, has influenced the way that I approach academic and policy questions. Along with my committee, several other individuals and institutions deserve my thanks. The Hopkins-Nanjing Center hosted me as a visiting scholar in Fall 2012, for which I am extremely grateful. Scholars at the Center and at Nanjing University, particularly Bu Maoliang and Qi Lingling, provided key insights as well as friendship. The University of Chicago and Ford Foundation New Generation China Scholars Program provided financial resources essential for my fieldwork. Bo Zhiyue and Zhang Xiaobo were extremely generous in sharing data. The librarians at the Library of Congress and research assistants at SAIS helped collect data on tenures of county leaders. iv David J. Bulman An early version of Chapter 6 was presented at the Association of Asian Studies 2013 conference, and I thank participants for their helpful questions. Additionally, the dissertation benefited from comments along the way from Carla Freeman, Dali Yang, William Parish, Tao Ran, Kyle Jaros, Travis Warner, and Amanda Kerrigan. Several individuals deserve credit from a more personal angle. During the long research process, discussions with fellow students Greg Fuller, Khalid Nadiri, John Gans, Ross Herbert, Amanda Kerrigan, and Selina Ho have provided an important camaraderie, albeit at the occasional expense of short-term productivity. My parents instilled in me a love of learning that made dissertation research interesting and rewarding. They have provided unwavering support throughout the dissertation process, and, more importantly, throughout my entire life, and I cannot thank them enough. Finally, the ideas and conclusions in this dissertation were generated over the course of months of fieldwork in Jiangsu and Anhui. To everyone who gave their time helping me understand economic and institutional development in your counties, thank you for everything you taught me, and more importantly for providing friendship that prevented fieldwork from becoming a lonely experience. While you remain anonymous, know that I am forever in your debt. v David J. Bulman CONTENTS Abstract ............................................................................................................................... ii Acknowledgements ............................................................................................................ iv Contents ............................................................................................................................. vi Tables and figures ............................................................................................................. vii 1 Introduction ................................................................................................................. 1 2 Literature review ........................................................................................................ 37 3 Understanding growth in China’s counties ............................................................... 81 4 Local governance and investment attraction ........................................................... 156 5 Leader impact on county development .................................................................... 204 6 Paths to promotion: Economic growth and meritocracy ......................................... 264 7 Growth versus stability: A new political economy of uneven development ........... 320 8 Summary and conclusions ....................................................................................... 362 Bibliography ................................................................................................................... 374 Curriculum Vitae ............................................................................................................ 414 vi David J. Bulman TABLES AND FIGURES Tables Table 1.1. Case county statistics versus provincial county averages, 2010 (except where noted) ................................................................................................................................ 22 Table 1.2. Biographical summary statistics ..................................................................... 28 Table 3.1. Preconditions and geography as determinants of income and growth.......... 122 Table 3.2. County-level correlates of GDP growth and TFP growth, 2000-2010 ......... 123 Table 3.3. Predictors of GDP growth in Jiangsu and Anhui counties ........................... 124 Table 3.4. Industrial taxation is an increasingly important source of revenue .............. 130 Table 3.5. Summary statistics for variables used in national growth accounting analysis ......................................................................................................................................... 151 Table 3.6. Robustness check of national growth accounting exercise ........................... 155 Table 4.1. Corruption and growth in Anhui and Jiangsu ............................................... 187 Table 4.2. Administrative expenditure and future growth ............................................. 199 Table 4.3. Government capacity and other correlates of economic success .................. 201 Table 5.1. Growth contributions of county leader personal effects (connected sample)222 Table 5.2. Correlation between growth outcomes in successive county posts .............. 223 Table 5.3. Leader characteristics influencing local economic outcomes
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