Township Governance and Institutionalization in China

TOWNSHIP GOVERNANCE AND INSTITUTIONALIZATION IN CHINA

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Vol. 35 Township Governance and Institutionalization in China by Shukai Zhao

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TOWNSHIP GOVERNANCE AND INSTITUTIONALIZATION IN CHINA

Zhao Shukai Development Research Center of the State Council, China

World Scientific

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Library of Congress Cataloging-in-Publication Data Zhao, Shukai. Township governance and institutionalization in China / Shukai Zhao. pages cm. -- (Series on contemporary China ; volume 35) Includes bibliographical references and index. ISBN 978-9814405911 (hc) 1. Municipal government--China. 2. Political participation--China. 3. Local government--China. 4. Cities and towns--China. 5. China--Politics and government. I. Title. JS7357.A15Z433 2013 320.8'50951--dc23 2013028390

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Printed in Singapore b1513 Township Governance and Institutionalization in China b1513_FM 12 Aug 2013 7:01 PM [Monday]

Contents

Introduction 1 Chapter 1 Progress of Township Governance Studies 20 Chapter 2 Organizational and Personnel Structure 84 Chapter 3 Fiscal Standing and Debt Crisis 116 Chapter 4 Power and Accountability 148 Chapter 5 Control Systems 177 Chapter 6 Public Services of Township Governments 208 Chapter 7 Township Government in Prospect 239 Chapter 8 Government Functions and Alienation of Institutions 263 Chapter 9 Institutionalization of Governments and Reforms 295 Bibliography 322 Postscript 333 Appendix I: Interview Outline of Town Leaders 336 Appendix II: Interview Outline of the Village Leaders 352

Index 371

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Introduction

This book is an empirical study of the grassroots government and governance in contemporary China. The author focuses on the township level among the three levels such as county, township and village, and the first 5 years of 21st century. The Chinese government abolished the agricultural tax in 2005 which tremendously influenced the daily activities and works of grassroots government. However, the author argues that the institutional environment and the behavior of grassroots government have not changed. Therefore, in the coming decades, this book and its arguments are of great importance for the Chinese government and its reform.

1. Background and Questions The township government, below the county level, is the lowest level of administrative apparatus of the state on the countryside. There are two reasons that the author picks township government as the research objective. On the one hand, the vast rural China is divided into numerous units of township as the indispensable entity to explore and study the issues of rural area. When the township government deals with the rural issues, its role is as a stakeholder rather than an outsider. Sometimes, the township government acts as a manager to respond and solve problems, but sometimes it is the problem. On the

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other hand, as the lowest administrative level of the state, the township government directly interacts with the society, and provides public services. It is clear that the township government adds a very crucial dimension in understanding and observing the state and society relationships in contemporary China. As an important part of political regime, the township government is not only the extension and miniature of Chinese government and political institution, but also represents the dynamics of rural development in China and the transforming state and society relationships. That is, the township government is too important to neglect when studying Chinese government and politics. This book studies the township government because of its unique position among the Chinese society, politics, and rural development.

1.1. Township government and “sannong issues” In the mid and late 1990s, unprecedented severe issues had occurred in rural China, and the officers of grassroots attributed these issues into three categories: “poverty of village, hardship of peasants’ life, and danger of agriculture” (Li, 2002). Meanwhile, the growth of agricultural production and rural economy was slow, peasants’ income

Governmental Institution Central–Local Relationship Township Government Relationship between Upper and Lower Levels

Embeddedness Peasants Interaction Rural Areas State–Society Agriculture Relationship Three Rural Issues

Figure 1: Township Government Interconnected with all Issues.

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Introduction 3

was unable to increase, and the social development of villages was completely stagnant. The problems of education, culture, public health, and social security were severe, which reflected in the shortage of public services at the grassroots. Consequently, the peasants’ political trust in the grassroots government decreased, and conflicts between the peasants and grassroots government also grew to unprecedented levels. Though the central government acknowledged the top priority of agricultural and rural governance, in realty, propaganda rather than effective works were conducted. Especially in the late 1990s, the government was not only unable to solve the heavy financial burden of the peasants and change the local harsh policies, but also discriminated the peasants in many policies and oppressed the immigration of the peasants. All these actions made the peasants’ life very tough. These phenomena drew the attention of domestic and international observers who started to study the issue of “governing crises” in China (Pei, 2002; Shirk, 2007). After the Party’s 16th National Congress in 2002, the central government adopted the solution of “sannong issues” as its priority. Its policy orientation was “to give but not to prey”, and the principle was “industry supports agriculture and city reciprocation to villages”. On the one hand, the government adopted several schemes to develop the agricultural production, medical improvement, and villagers’ education. On the other hand, abolition of agricultural taxes and subsidizing grain production increased the peasants’ income. It is clear that these policies have not only promoted the economic development of villages, but also boosted the coordinated development between economy and society. Moreover, the government also highlighted the protection of peasants’ rights such as abolishment of “custody- and-repatriation regulation” which seriously retarded the mobility of peasants to the city, relaxed the policy of limitation and discrimination on the migrant workers, and adopted strict rules to prevent land acquisition that infringed peasants’ rights. By such innovations, the rural economy was restored, and effectively resolved or removed some conflicts and potential crises on the countryside.

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Nevertheless, the policy shift toward rural areas does not mean achieving a final solution to the “three rural issues”. The central government’s bad rural and agriculture policies are part of the problem of rural governance crisis, where the grassroots government played an important role. As matter of fact, intensification of agricultural issues was reflected by the conflict between grassroots governments and peasants. This is why it is necessary to analyze the important role played by the township government when we study the sannong issues. Though the policies are originally created by the central government, the grassroots government implements these policies and enjoys certain discretional power. In China, the grassroots-level government is composed of the county and township governments, where governments of these two levels work closely with each other. In most cases, the township government just implements orders from county government. However, we have good reasons to doubt the grassroots government’s capacity to implement policies. As some members of Chinese People’s Political Consultative Conference have directly complained in front of Premier Wen Jiabao at the national conference: “the village (committee) cheats the township government, the township cheats the county (government), and they do not stop cheating until to the State Council; the State Council issues the document, read it from higher level to the lower level, working staff go to the restaurant after they read the document, and this document never gets implemented.”1 The statement shows that the operation of grassroots government has very serious institutional design problems. How to reform the government is still an unanswered basic and most important question for China’s further reform. This is well reflected by the operation of township government. Contrary to this, the problem of township government is only the tip of iceberg, therefore, we need to comprehensively study the township in order to appreciate the origins of sannong issues (the rural, agriculture and peasant issues) and explore the path to solve these issues.

1 See Ma (2002).

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Introduction 5

1.2. Township government in the governmental system Apparently, it is not fair to attribute the rural governance crisis to the grassroots government because the deeper cause is the government or political system. That is why we need to clarify the question from two different levels. First, the township government could not be simply treated as the reliable agent of the central government because the central government or “state” is hard to directly control the township. The township with strong autonomy not only “selectively” implements the policies and may evade the monitoring and audit from upper-level government in many ways, but also frequently gets directly involved in many social issues to maximize its own interests. Sometimes, the township government shows strong self-service orientation and even directly competes with masses for interests. Thus, the central government’s policy shift is neither able to bring fundamental changes in the operations of grassroots government nor implement the basic solution to the sannong issues. Recently, the gap between improvement of policy and dilemma of grassroots governance has provided a new argument for above problem. Secondly, the township is supposed to be responsible for the grassroots governance, however, this is beyond its power and resources. The township government is strictly limited by its structure of organization, institution of management, configuration of function and operation of mechanism of the whole government system. Hence, we need to retrospect and review the system of government for exploring the problems of government at the grassroots level. The rules in paper seem to regulate the function and distribution of power of grassroots government well. However, the practice is quite different. On the one hand, many grassroots government’s behaviors, especially the interaction between state and society does not have any institutionalized norm to operate. The abusing power of grassroots government generates rampant conflicts. On the other hand, many institutional norms remain in paper instead of being implemented. The practical operation of grassroots government must be understood from the perspective of fulfillment and dynamic process. A superficial investigation would show the full implementation

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of official rules, the smooth operation of grassroots-level government, where the lower level passes the audit and examination from upper level, but the main bodies and objects (the public and social organizations) that involve the institutions do not often draw into the operation of institutions. For example, the central government demands to “make the governmental affairs public” to guarantee information among the public and places emphasis on the monitoring of the grassroots government by the public. That is, the public takes supervision very seriously because its interests are directly related. Actually, which governmental affairs should require public monitoring depends on the preference of local government rather than demand of the public. Finally, the grassroots government sometimes publicizes the governmental affairs with high-profile in order to deal with the examinations and reports of upper level, but this is irrelevant to the public monitoring. In summary, making governmental affairs public fails to achieve its goals. “Lower level” and “upper level” are two relative concepts in the governmental system. My fieldwork discovers that both the lower and upper levels often “cooperate” or conspire with each other to cheat their supervisor, even build “alliance” against the outside pressure. The operation of township government reflects the characteristics and deficiencies of the government system, and we need to incorporate an analysis of the governmental system to exploit the role and function of the township government in the grassroots governance.

1.3. Township government and “ state–society relationship” “The sannong issues” include dimensions of agriculture, peasants, and rural areas, deeply involving the problems of rural economy, society and politics. Development of agricultural production and increase in peasants’ income is one of important problems, but it is not the entire problem. The growth of production and increase in income are not necessarily bringing stability to rural society to lead the peasants’ political trust in the government to rise. The basic challenge for rural governance is to build a stable community. To reach this goal, the tasks of township are not only to maintain the public order of grassroots

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Introduction 7

society and provide the public goods and services required by the grassroots society, but also to set up a channel for the public demand, coordinate and arrange the political participant through institution, and achieve the positive relationship between state and society. From the perspective of state–society relationship, the township is the administrative district of rural area. The rural China is divided by over 30,000 townships, and each township is a community with governmental institution. Theoretically, the township government, as the proxy institution of state at the township level, should implement every national institutional arrangement and policy in order to assist in the penetration of the state’s power into grassroots society through the operation of township government. However, it is a controversy whether the power of state effectively penetrated and controlled the society or not. Some scholars point out that the power of the state had penetrated and controlled the society before the reform, but the decentralized policy had brought about the rising of localism (Andres Walder, 1986). Contrary to this, other scholars argue that the power of central government was hard to penetrate and dominate local area because of honey comb-structure, and state power had extended into local area through the market power during the reform era (Shue, 1988). What is the major role of township government in the state and society relationships? Is it an agent of central government to represent the central level and rule the people in the regions, or turn into the agent of region it rules and protect its residents against the coercive power of the central government? It is paradoxical that the township government does not become the authentic agent of the state but maintains strong autonomy. However, the township government’s interest is not congruent with the society. Furthermore, scholars find that the township government not only refrained from implementing state policies and penetrate into the society, but also alienated the state from the society. As a result, the township government has turned into an autonomous organization with strong self-interests. The grassroots regime uses the title of state to erode the public interest at local areas, and thus separates itself from the local society. Consequently, this phenomenon initiates the disorder of rural society (Zhang, 2000).

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The township government faces very limited social constraints. As matter of fact, the capacity of government at grassroots level is so limited on the siphoning off resources extraction and wining support from the rural society. Moreover, its limited ability also reflects on its penetration into the grassroots society and effective implementation of national policies. Moreover, the government of grassroots which lacks the character of embeddedness does not win the trust and identity of social member through the participation in daily life of grassroots society. On the other hand, the different groups in grassroots society have different influences on the grassroots government, however, these characteristic influences are uncertain and are constrained by non-institutional factors. Therefore, the government at grassroots level is easily influenced by the special interests, and does not have any neutral position. Scholars, studying China’s economic development, point out the presence of mutual embeddedness between local government and enterprises (Oi, 1998). The local government is openly sided with special interests, and formed a scenario of competing benefits with people among the interest conflict of grassroots society. It is an important factor to initiate the paradox of grassroots society. Recently, grassroots governments have been found to be playing a significant role in more and more conflicts of land expropriation. The question worthy to further discussion is: Why does the township government deviates from the norm of legal institution?

2. The Analytical Framework of Institution of Township Government The township government, the administrative organ of People’s Congress at township level, “implements the resolution of People’s Congress, decision-making and orders from the state”, and manages the administrative works within the district. This shows that the state is taking an effort to establish the township government to be an administrative body with the ability to effectively implement the policies of central government and upper level, and to receive the trust and support of grassroots society. As a matter of fact, the practical role of township government is not congruent with pubic interest of

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Introduction 9

society, nor obeys the policy orientation and demands of the central government. Migdal argues, “When we talk about the state autonomy, we should ask which level is autonomous because different levels face different pressures” (Migdal, 1988). We need to clarify several basic questions when we explore the autonomy of township government. What are the real functions of the township government? How do township governments operate? Especially, how the township government takes the action to evade orders and demands of upper level, and how the township government deals with the examination and audit of upper level?

2.1. The institutional dissimilation of grassroots government To explain the rapid development of Chinese economy and rural society, scholars who emphasize the role of township government employ the term of “local state corporatism” to describe the effect of local government on the economic development (Oi, 1992; Lin, 1995). In fact, the function and behavior of grassroots government are more and more similar to corporates that actively seek the profit such as the GDP, fiscal revenue, or other specifically economic profit. This is why researchers treat the local government as the “manager of regime” (Duara, 1988; Zhang, 2000). Under the operation of “corporatism”, the administrative function of daily life and orders of uppers level are no longer the primary concern of local government. For winning the recognition of upper level, the township government often launches a “campaign” to implement policies with fanfare at all costs, especially during the period of upper level’s examination and evaluation. Once the township government concentrates on the “central tasks”, it accelerates the other continuous professional works and functions. The end of examination and evaluation process terminates the governing mode of “campaign”, which is unable to sustain. A deeper investigation suggests that the “corporatism” and “campaign” styles played by the grassroots government are closely intertwined with the “fragmented authority” of grassroots government. The institution and policy

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fragmentation of government is not only reflected in the discontinuity on the authority and value, but also on the system and institution. The grassroots government is hard to be effectively integrated with upper level, other departments, and society, resulting in disorder of grassroots governance. The function, structure and operation of township government clearly deviate from the formal institution, and we call this phenomenon as “institutional alienation”. This alienation not only reflects on the public regime’s authority and values of grassroots’ government, but also upon the relationship between actual operation of grassroots government and society. Without implementing the function of public regime, the operation of grassroots government will find it hard to win the support and trust of grassroots society and “legitimacy”. The original function of grassroots government is to satisfy the management and service, which are demanded by the grassroots society. However, in reality, the grassroots government has dissimilated its function to deal with the evaluation of upper level. For dealing with the demand of upper level regarding the management, the township government mobilized the people to participate in its movement. That is, the institutional arrangement of grassroots regime is to deal with the demands of the society, but the actual operation stands aloof the social environment, and is independent from the external demand by society. The problem of dissimilation is rooted in the internal mechanism of grassroots government. How did the institutional alienation of grassroots government happen? That is, why the institution has not been implemented and actual behaviors have not been constrained by the institution? We can explain this phenomenon from the following dimensions. The first one is the “deficiencies of institution”. Without the support of a concrete institution, the goals and values, projected by the grassroots government, are hard to implement. As a result, the value and authority of the government has been alienated. The shortage of institutional constraint on the activities of management and service operated by the grassroots government has produced the lacking mandated norm on the governmental behavior. Especially, the incomplete rules and procedures are unable to effectively resolve the numerous

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Introduction 11

conflicts at grassroots level, and the society has no concrete rules to follow when it wants to express its demands and to exploit the solutions. The second is the “suspension of institution”. The running process of grassroots government has accumulated a large number of documents where some are directives of the upper government, and some are from the formulations of same level. These documents are not only publicized via various notifications, addresses of leadership, working projects, but also put on bulletin boards. On the one hand, officials of upper level frequently check the completeness of these norms. If we carefully observe the public activities of grassroots, we can easily find some documents with fictitious character, and yet nobody pay attention to them. The third one is the “institutional dislocation”. The rules of institution do exist in the running process of grassroots governments, but different institutions do not have any coordination due to conflicts among different institutions, or the institutional system over-emphasizes the importance of one side and breaks the balance of different institutions or ignores the other side. The fourth one is the “institutional inverter”. That is, the results of institutional implementation conflict with the original ideas of designation. Moreover, the process of fulfillment is toward to the opposite direction of goal. For example, some rules relating to law of birth plan have caused the violations. Some institutions involved in managing land have expropriated rights of arable land, and some regulations in information management have produced fake numbers.

2.2. Reform and governmental involution The problem of “governmental involution” at grassroots level has two dimensions. On the one hand, politics, economy and society of grassroots has changed dramatically in past three decades, institutional norms are unable to catch up with the tempo of change, and the original designation of institution is not able to satisfy the demand of society. The production and accumulation of numerous problems have spread to the central government and challenged the current political order. On the other hand, the government of grassroots has transformed from the political structure of high concentration, which

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continued the inertia of original system. What is more, the grassroots government is influenced by self-reliance, which does have any intention to institutionalize, and even resist the institutionalization. Since 1978, the township government has tried to reform in many aspects, such as structure, responsibility, authority, institutional environment and so on. Why is the township maintaining the currently running system and not influenced by the above reforms? As a matter of fact, as the other orders of policies, the request of upper level to grassroots government for carrying out the institutional and administrative reforms is only a formality. The reform of government is only a movement without any record. These reforms are not often focused on the operative institution of township government, and its endogenous institutions are not transformed by these reforms. It seems that the operation of grassroots government is about “locking” status. Whatever its function or power, the authority or running system is positioned on the specified mechanism such as the function of corporatism, running system of movement, and authoritarianism structure of fragmentation. Under this specified path dependence, the fundamental innovation is hard to occur on the endogenous institution. This research argues that this status is the “involution” of grassroots government. The fixed way and mechanism repeatedly happen and are reluctantly maintained, which have produced obstacles in governmental functions and made it hard to achieve normal political development (Figure 2). Where should the grassroots government go? Under an increasingly complicated structure of grassroots society, how should the grassroots government act as an agent of state on the grassroots society and implement the national policies and institutions? How does the grassroots government satisfy the demands of public goods and services by grassroots society, coordinate and deal with the gradually escalating conflicts among grassroots society, and win the support and trust of grassroots society? The only way for the grassroots government to get out of the trap is reform, which is a historical challenge. Reform may bring political stability, but may also lead to instability. We do not have adequate knowledge about political consequences of instability that may arise

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Introduction 13

Function of Fragmentary Movement of Corporation of Structure Behavior

Governmental Involution

Deficiency of Dislocation of Suspension of Inversion of Institution Institution Institution Institution

Figure 2: The Chart of Grassroots Government Dissimilation.

as a result of reform. The market reform has benefited most people, and has improved the political legitimacy of government. However, the reform so far has been unable to constrain the abuse of power, and inequity has weakened the government legitimacy. When economic depression takes place, perhaps the inequity and corruption among officials will lead to political discontent. We also do not know whether the gradual reform is strengthening the existing institution or leading to further significant changes. Perhaps a successful reform is harder to achieve than a comprehensive revolution, because the former needs more sophisticated political skills. The results of grassroots reform, which is likely to produce dramatic revolution or more extensive and influential political change, depends on the administrative skill of top leaders. Perhaps the reform reshuffles the local politics in an unexpected way.

2.3. Institutionalization of government If we view the “comprehensive reform of village” as a systematic reform, the change of organization and structure regarding the grassroots government must be treated as a part of such reform. For example, scholars view that the self-rule of village, advocated by the state,

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is to set up a stable cooperative relationship between central reform- ists and peasants. The upper level has constrained the power of local government by empowering the democratic rights of peasants (Xu, 2003). However, if the system is unable to influence the current operation pattern of local government, these reforms will hardly produce any effect. To solve the current problem of institutional alienation, it is necessary to comprehensively think of the system and power structure of government; of the government and society of grassroots; and even the division of internal work and integration of departments. Hence, it is necessary to fulfill the objectives of governmental institution, use the institution of government to adapt the high division of work and complicated political and social environment, and set up the professional structure to implement every work. The government not only needs to form the standardized operational procedure internally, but also needs to response to the changes in environment and new external demand and adjust to new values. The institutionalization of government includes the following aspects. The first one is the fairness. It is necessary to guarantee that the procedures of the organization, institution are fair and publicized. The local government acts as the state’s branch that directly faces grassroots society. The institution’s fairness is indispensable to achieve social order, and it is the premise to make the institution trustworthy by the public. The second one is the adaptability of the institution. The main aim of the institution is to deal with specified environment and demands of society; therefore, the institutions must response to different problems of the grassroots society and resolve their social conflict. Because the environment is not inactive, especially the current modernization process in China, the economic and social change among the grassroots is rapid and multidimensional. Hence, the institution must adapt itself to these changes. In addition to maintaining stability, the institution may adjust and involve itself in the proper process and maintain its interactions with the institutional environment. The third one is the coordination of institution. Institutionalization refers to coordination among different organizations, institutions, procedures and policies. Otherwise, the conflict would influence the institution’s operations directly. The

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Introduction 15

coordination is not only to help the implementation of the policy fully, but also assisting in the maintenance of coherence between every part of government and different levels which is helpful to increase the efficiency of government. The fourth one is the effectiveness of the institution. The institutionalization that involves the organizations, procedures, and institutional norms must be implemented and operated. Once the ineffective institution emerges, the grassroots government certainly has the option to evade. As the result, the arbitrary power of government is above the norm of the institution, which weakens the binding power of the institution. From this perspective, we must pay attention on the limitation of government. In fact, the paradox has existed between government power and capacity. That is, when the government’s power is limited, its capacity is weaker (Li, 1998, 2003). The effectiveness of governmental institution is the result of the institutionalization of “limited government”. The actors who are related to grassroots government include the upper-level government, village committees, lower-level government, rural society and others organizations or groups (local enterprise, self- rule organization of community). The related institutions include not only the bureaucratic system, but also grassroots democracy, financial institutions, personnel institutions and so on. From this perspective, the direction of a national regime establishment is to enable the township government to simultaneously satisfy the demands of state and grassroots society. I believe that the only way for the reform of grassroots government is through autonomous governance and democracy, and building the rule of law. The arrangements of these institutions will enable the management and services of grassroots government to satisfy the demands of the grassroots society and to embed itself more effectively with the interest structure of grassroots society through the establishment of forums to express public opinions, democratic negotiation, and popular monitoring mechanism. The nation, which provides the rule of law and feasible arrangement of institution, guarantees the work of interests’ expression and coordination, and makes the governance if grassroots government agrees to obtain the “legality”.

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16 Township Governance and Institutionalization in China

3. Structure of the Book Government operation is a process. To completely describe the actual operation of township government means to choose a view of points. As the western scholars describe the reform of grassroots government in contemporary China, “the local election has played a certain effect on restrain the local authority, but the other institutions and implementations such as the accountability, the transparency of budget, the fiscal reform, the legal aid service, and the pressure of non- governmental organization have the same effect as well.”2 Numerous institutions and practices are involved in the township governance. What are the key components that control the actual operation of the township government? This book analyzes the township government from multiple dimensions, which include the organization of township government, the finance of township government, accountability of township government authority, the relationship between township and upper-level government, and the relationship between township government and grassroots society. From perspectives of different questions, I attempt to observe and describe the actual activities of township government in a dynamic way, especially the interaction between government and institutional environment. My starting point is to observe and discuss the related theories. The introduction concentrates on the principal questions and analytic framework of this research. My core concerns the operation of grassroots government that is not only limited to the government but also involves the rural society government institution and relationship between state and society. Chapter 1 briefly examines the history of township government during the reform era and analyzes the current literatures and theories since the historical process of reform has reshaped the current township government. Through the evolution process of explanation, we can understand the current status of township government, where a comparison of original intention of reform and status quo is a major

2 See Perry and Goldman (2007, pp. 1–2).

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Introduction 17

dimension to analyze the operation of grassroots government. I not only place the exploration of this book in an academic context, but also place a greater effort on the important discussion of realistic questions. Chapter 2 describes the organization and personnel of current township government, and reviews the former reform of the institutions and organizations. I try to explain: Have the great efforts of reform affected the streamlined organization? How did the mechanism of internal expansion happen? Especially, how to set up the cornerstone for the grassroots government? Chapter 3 explores township governments’ financial issues and debt problems. These problems have arisen only as a result of the drawbacks of grassroots government, also from the defects of the whole government system. I try to combine the specific status quo of township government for further discussion: What is the proper budgetary and fiscal institution needed by modern government? Chapter 4 analyzes the internal power structure of township government, arrangement of accountability and mechanism of encouragement, and accountability system from upper level to township government. The purpose of these analyses is to expose the distortion under the interaction between power structure and accountability of township government, and my major question of this aspect regarding what is the fundamental basis of designation of township governmental accountability? Chapter 5 focuses on the controlling system of government, and analyzes how the township government deals with the upper-level government by way of entertainment and how the township government manipulates the village through direct management. My concerns include not only the interactions between township government and its upper level, but also questions like: Has the cooperation between the central government and rural society implemented the purpose of joint controlling the grassroots through the self-rule of villagers? Chapter 6 begins with the functions of public services, and the analysis is focused on change of relationship between township government and grassroots society under the historical background of

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18 Township Governance and Institutionalization in China

national policies’ improvement. Since the people are familiar with the construction- and service-type of government as the ruling idea, what were the major factors that determined the transformation of government toward to the service-type? Chapter 7 explores the historical fate and future evolution of township government, which put the reform of grassroots government under the background of entire governmental transition to observe two perspectives. The first one is direction of realistic change under the established system of government, and the second one is the direct influence of macro factor to the fate of grassroots government. The core question is what is the background that facilitated the meaningful action to the reform of government at grassroots level? Chapter 8 concentrates upon the discussion on the operation mechanism of grassroots government. The analysis shows that the operation of grassroots government has fallen into a deep internal dilemma — involution. From my point of view, the grassroots governmental defects such as its functions, operations and structure have become the systematic problems. As a result, the operation of the government enters into a path with embarrassing status where it is hard to reflect the realistic development of government. The factor of this dilemma is the alienation of governmental institution. Chapter 9 concentrates on the discussion of basic questions regarding the initiative of grassroots government. These questions have surpassed the grassroots even over the government, but they are closely related with the change and reform of grassroots government. These problems such as politics and administration, government and society, political and governmental institutionalization, democracy, self-rule, and rule of law are not only related with the construction of national regime, but must also be faced by the reform in China. I try to integrate the particular grassroots government and the life of rural society to discuss these problems for deepening the study the reform of China government. Although the data of this book is drawn upon the field research under specific time span and locations, the starting point can trace to my observation and reflection long time ago. Fortunately, I had the opportunity to study the policy research after reform era, especially

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Introduction 19

the sannong issues. During this period, my attention was on the construction of grassroots organization where I fortunately assumed the leading position of grassroots government. These working experiences have helped me immensely in understanding the important problems of rural society. This book tries to provide systematic answers to problems of grassroots government that have been of concern to scholars for a long time. While I am not certain whether this goal can be reached or not, the one thing that I can do is to try my best.

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Progress of Township Governance Studies

Since the township institution rehabilitated more than 20 years ago, it has undergone a set of reformations, such as “merger and abolishment of township”, “simplification of working load and decentralization”, “composite reform of county–township institutions”, “reformation of tax and fee at village level”. The initiation of every reform has reached a certain degree of achievement; however, every reform has also repeatedly caused new problems. Consequently, these problems which interweave and influence each other have led to the complicated plights of township currently. The research of this chapter begins at the change of policy and progress of study. On the one hand, I would like to review the related policies, especially development of policies and processes of evolution regarding the designation of the township institution. On the other hand, the literature review concentrates on the developmental process of questionnaires, research methods, research findings, and policy opinions. The following part will introduce the questions and strategies of this research.

1.1. Policy Description and Comment Observing the developmental process of China’s grassroots regime after the reformation, we find that the actual development of township government is about the original good intention of policy

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designation, which unfortunately has fallen into a new dilemma. This dilemma is over the systematic cycle of “relaxation will cause the disorder, the disorder will cause the close, and the close will cause the demise”. More important, the complicated transformation of rural politics, economy and social lives placed unlimited problems at grassroots society reformation level. That is, the formation of current hardship on the grassroots government is a product of the interaction of dual relationship between institutional designation and actual operation.

1.1.1. Policy tracking The background of current township regime can be traced to the end of 70s and the beginning of 80s. The responsibility system opened the prelude of reformation and released the huge potential energy of peasants, which brought about the rapid development of rural economy. Simultaneously, the commune system, which “had merged the political and economic power” as the agent of nation, employed the way of class struggle to control and assume the task of developing the rural economy and managing the rural society. How to reintegrate the rural society and structure of the new political regime became the key problems in the forefront of reformation. Some grassroots governments had actively supported the separation of government and commune management when they faced the sever demand of reorganizing the villages’ order and rebuilding the grassroots regime. The first one was the Goanghua county government in April 1979, and this reformation produced certain positive effects. Nevertheless, the macro institution remained unchanged. As a result, the reorganization of county level was incompatible with the provincial and prefecture levels, which in turn led to the end of reformation at the county level. Hence, this reformation was transferred to the level of grassroots communes, and set up several pilots. These pilots in turn transformed to the more grassroots levels of government; that is, the commune had transformed to township government. This transformation did not change the employment of personnel, but divided the functions of the government, party and

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22 Township Governance and Institutionalization in China

enterprise among different departments. This concrete and specific reformation was very extensive, such as dealing with the enterprise owned by the commune, redistributing work of communal cadres, contacts with the production team, distributing the profits and so on. Meanwhile, some people spontaneously conducted the self-rule of villagers. According to the current information, the earliest areas that implemented the self-rule of villagers are the counties of Yizhou and Luochen at the Hochi prefecture in Guangxi province. Because nobody wanted to manage the public affairs after the fulfillment of household responsibility system, people in these areas decided to institute the code of conduct and set up an organization to manage the public affairs administered by the previous brigade. This is the formation of village committee. This autonomous organization brought positive solution to problems such as forcibly occupied arable land, fighting, illegally slashing of the forest in mountain areas, steal- ing and gambling. This is the earliest reformation of township and village. In November 1982, the “Drafting Report of Revisionary Cons- titution” formally submitted its report to the National People’s Congress for deliberation. “Regarding the Chapter of National Insti- tution” proposed to “strengthen the establishment of local regime under the central leadership”, “changed the system of commune characterized with merger of political and economic power and instituted the political regime. The commune was the only one of the organizational formations in the rural collective economy. This change has facilitated to fasten the establishment of rural regime, and was positive to the development of collective economy”. The draft requested that the specifically implemented separation of political and economic works is an exquisite work, and all parts of the country must undertake this work step-by-step in accordance with the local conditions rather than doing it in a perfunctory manner. In December 1982, the National People’s Congress passed the new revised “Cons- titution of the People’s Republic of China”, where Article 95 regulates that “People’s congresses and people’s governments are established in townships, nationality townships and towns”. On the 31 December 1982, the Politburo discussed and passed the

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Progress of Township Governance Studies 23

resolution of “Current Problems of Rural Economic Policy”, and indicated the two-way reformation of commune system that is the fulfillment of household responsibility system and separated the political and management functions of commune system”. “The commune system, which merged both political and management functions, must be changed for separating the political and management powers, and this work of change must be well prepared and organized step-by-step. Before the separation of political and management functions, the commune and brigade had seriously assumed the original administrative works, and guaranteed the process of usual work normally. After the separation of government and management functions, the establishment of regime at grassroots level must follow the constitution”. In October 1983, the “Notification of Establishment of Township Government Regarding the Fulfillment of Separating the Political and Management Works” issued by the Central Committee of Chinese Communist Party (CCP) and the State Council requested that the “current system of merging governmental and economic functions is not suitable for the reformation of rural economic system. The constitution clearly stipulated to set up the township government in rural area, and governmental power of township must separate from the management power. Currently, the most urgent work is to establish the township government with separate powers over governmental and economic apparatus. Concurrently, the party branch must be established at township level, and then gradually set up the economic organization in accordance with the demand of production and intention of mass”. During that time, the central government did not clearly propose a level regarding the scale of township, and regulated the “province, municipality, and autonomous region to decide the establishment and division of townships, nationality townships and towns. The scale of township was based on the administrative district of previous commune to appropriately divide the previously large administrative areas into smaller ones. During the process, the important task is the establishment of towns. A town with certain conditions may set up the town government to promote the development of rural economy and cultural affairs. The village committee, the autonomous organization

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24 Township Governance and Institutionalization in China

of grassroots mass, may set up the residential condition of villagers”. From the official document ( Policy Research Center, Ministry of Civil Affairs, 1999, p. 868), the designation of institution in that time was to separate the political power from the commune and transfer it to the newly formed people’s government. The commune only retained the function of economic organization. All parts of the country gradually fulfilled the separation of political and economic power. That is, the agricultural responsibility system and separation between the political and economic power comprised the major thinking of central government regarding the reformation of grassroots regime. Following the restoration of the township government, the reformation too followed. In September 1986, the Central CCP and State Council issued the No. 22 document (“Notification Regarding the Strengthened the Constructive Works of Grassroots Regime at Rural Area”), which clearly reflected the reformative thinking of the 80s. This notification pointed out that “the reformation of grassroots regime at rural area was the important component of the reformation of political institution. Because the time regarding the reformation of grassroots regime was not quite long, the supplementary policies related with this reformation had not been set up yet, and construction of grassroots regime at rural area had led to a host of problems. For example, the relationship between party government and business had not clearly divided the roles of each other, some parts had not separated the political, governmental and economic power, and a few local governments had not fully functioned”. “Despite the establishment of township government and economic organization at township level in some parts of the county, the responsibility between political and economic works has not completely separated. A certain number of township governments have not staffed the personnel for economic affairs, and those local governments were only interested in turning the economic power into the economic organization at township level. As a result, there was no separation between political and economic division”. For solving the above problems, the notification proposed seven requests, such as “clear division between political and governmental works and appropriate arrangement of relationship between political and governmental departments”, “solve

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Progress of Township Governance Studies 25

the problem of party secretary of township charged with the administrative works”, “fulfillment of the task of separation between political and business works for promoting the development of villages”, “streamline administration and decentralization to strengthen the function of township government”, “practical solutions for the self- establishment of township regime”, “improvement of cadres’ quality and their working attitudes”, “working for the establishment of village committee”, “strengthening the leadership regarding the establishment work of grassroots regime at rural area”. This document viewed the increasing and complementary establishment of grassroots regime in the countryside as an “important composition of political institution reformation”. From the political and economic sphere and three levels of village, township and county systematically proposed the ideas to complete establishment of township regime. The document explained and described the major problems, such as “self-rule of villagers”, “the relationship between different vertical and horizontal bodies (tiao and kuai)”, “the relationship between party and government”, and “fiscal establishment”. Afterward, the initial statement of important polices regarding the reformation of township regime could be found in this document. This official document issued by the central level also emphasized the reformation of county level. First, it focused on solving the problem of lack of clear division between party and government and between upper and lower levels. This document required the party and governmental bodies of county and above county level “to reasonably solve the division of work between party and government, and follow the rule of division of work between party and government to lead the task of basic level. Those tasks which belong to government were not assigned to the party secretary of township”. Moreover, “it required to promote the comprehensive reformation of county level, and both reformation of economic system and political institution would need to act in concert with each other, and the institutional reformation of above the county level also coordinates with the reformation of basic level for strengthening the system of regime at basic level”. This document also specifically defined the economic function managed by the township government, and demanded that “the

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26 Township Governance and Institutionalization in China

township government must be staffed with full-time cadres to accord with the practical condition for implementing the management work of economic affairs”. Secondly, this document emphasized to solve the conflict of tiao and kuai. “So far, many departments of county government had set up their branches in the township level to extend their power of management to the subordinate level. As a result, the township government found it hard to coordinate and manage every task with its administrative district. The fragmentary tiao and kuai must be reformed gradually, and the basic principle of reformation was to streamline the administration and decentralization. The third one was to promote the fiscal establishment. This official document asked “all parts of the country to set up the fiscal department in township levels as soon as possible”, left some fiscal profit to township level through overcharge, and “promoted the active enrichment at grassroots for fastening the rural construction”. From the perspective of these policies, the main thinking of reformation was to set up the township government for a more comprehensive regime at the basic level. However, when we observe and retrospect the practical process of reformation after 20 years, the expected result has not appeared when compared with the original thinking.

1.1.2. Process of reform Since the promulgation of the official document of “Notification Regarding the Strengthened the Constructive Works of Grassroots Regime at Rural Area” in 1986, the reformation of township government has made a great effort on merging township, division of powerful structure, and governing structure, and these efforts have won certain positive effects. Nevertheless, the basic objective of reformation has not yet reached in 21st century.

1.1.2.1. First, merger of township and town So far, the most progressive part of reformation at the basic level is the merger of township and town. This is the only policy that has reached the expected objective (see Figure 1).

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Progress of Township Governance Studies 27

Figure 1: Changes in Total Number of Towns and Townships (1983–2006).

In October 1983, the Central Committee of CCP and State Council issued the “Notification of Establishment of Township Government Regarding the Fulfillment of Separating the Political and Management Works” and requested to abolish the commune and to set up the township government. This notification regulated the “scale of township, which was based on the administrative area of previous commune. If the administrative area of previous commune is too large, the area of township could appropriately divide into smaller parts”. “The staff number of township was not over the number of current commune, and the specific rule arranged by the province, municipality, and people’s autonomous region”. In fact, the level of provincial government was the practical decision-maker regarding the establishment of township, therefore, the local level had more “space of operation” and flexibility. Afterward, it initiated the process of establishing township, and the administrative areas of such new townships were smaller than previous commune especially the largely increasing number of administrative towns. In late October 1983, 9,028 communes had fulfilled the separation of political and

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management powers among 902 counties (city, district) in China, and these counties totally set up 12,786 township governments. About 176 out of 902 counties had completely established the township government within their administrative areas.1 Up to the end of 1984, the task of “abolishment of commune and establishment of township” had completed, and nationwide, 92,476 township governments and 8,119 district offices were established.2 After the establishment of township government, a new problem emerged, that the scale of most township government was quite small. Because the partial budget of township government was through the allocation of county government, and part of budget collected from the grassroots, the excessive number of townships increased the administrative cost and led the heavy financial burden among peasants. Therefore, it was necessary to reduce the number of townships for decreasing the number of grassroots governments and burden of peasants. Since 1986, the policy integrated the “Notification Regarding the Strengthened the Constructive Works of Grassroots”, and the first round regarding the merger of townships was implemented nationwide. Up to the end of 1986, the nationwide number of townships immediately dropped from 91,385 in 1985 to 72,135,3 thus reducing the number to less than 19, 250 from the previous year.4 Under the dominance of government, merger of townships continued to progress on a large scale, and the consequence of this policy was the clearly decreased number of townships during 1986 to 1996. According to the statistical numbers from the Ministry of Civil Affairs, the total number of townships nationwide was 45, 277, and less by 26,905 than 10 years ago. The number of townships decreased 34,359, the number of towns increased 7,457, and the number of administrative villages approximately decreased 100,000.5

1 See Ping-Han Luo (2006). 2 See Ministry of Civil Affairs (2000). 3 Ministry of Civil Affairs (2000). 4 The number of township in 1985. See The Gazetteers of Nationwide Township (1986). 5 See Ministry of Civil Affairs (2000).

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The number of townships in China was approximately 45,000 during 1996 to 1999. In the 21st century, the government has paid more attention on the policy of merger of townships. The reformation of rural tax and fee started in Anhui province as the pilot, and later this policy was implemented in other provinces. The reformation of rural tax and fee, which aims on the reduction of peasants’ burden, has provided a new opportunity to reformation of township bodies. On 24 July 2000, the Central Committee of CCP and State Council issued the “Notification of Pilot Work Regarding the Reformation of Rural Tax and Fee” to ask the “county and township government to solve the problem of decreasing income through several ways, such as transformation of governmental function, reduction of organizations, compression of the payroll staff, and adjustment of expenditure structure”.6 On 26 December, the Central Committee CCP and State Council issued their report on “Regarding the Opinion of Downsizing Personnel at the Level of City, County and Township”, and pointed out that “the qualified areas where there is no negative effect on the social stability and has positive effect on the economic production and development, and is conducive to the establishment of small-scale township should be chosen to merge with the township. In January 2001, the Central Committee of CCP and State Council issued the “Opinion Regarding Doing the Works of Agriculture and Village in 2001”. In March 2001, the Fourth Session of the Ninth National People’s Congress passed the “The Tenth Five-Year Plan for National Economic and Social Development of the People’s Republic of China”. Both the documents proposed the merger of township government to reach the goals of streamlining the personnel and reduce the burden of peasants. In July 2001, the Ministry of Civil Affairs with the State Commission Office for Public Sector Reform, Economic Restructuring Office of the State Council, Ministry of Construction, Ministry of Land and Resources. Ministry of Agriculture issued the “Guidance Opinions Regarding the Adjustment Work of Administrative Area at Township Level” to guide and coordinate the

6 See Central CCP (2000, No. 7).

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30 Township Governance and Institutionalization in China

work of township merger.7 The No. 1 document, issued by the Central Committee of CCP in 2004, requested “further downsizing the personnel of township government and its affiliations and staff of payroll, adjusted the organizational structure of township government with stable steps and conditionally merged villages, and advocated the cadres to concurrently assume different positions”. Because the reformation of rural tax and fee has brought about the decreasing income of most townships, the policy to merge township and coordinate the resources after the reformation of rural tax and fee was regarded as the most important. The total number of townships in China decreased to 39, 240 by the end of 2002. By the end of 2005, the nationwide total number of townships was 35,473, which was approximately less than 10,000 when compared with 1995 (The Statistical Report Regarding the Development of Civil Affairs in 2005). However, the merger of township meant only reducing the number of townships, which did not translate to transformation of governmental institutions. That is, the number of townships did not influence on the working mechanism of township. The process of reformation also showed that the problem regarding the institutional transformation of township government was more complex.

1.1.2.2. Second, restructure administration and decentralization From the policy designation of early times, the restructure administration and decentralization are the two important directions of township reformation. In 1986, the Central Committee of CCP issued Document No. 22 and regarded the “restructure administration and decentralization” as the important objective of reformation. This document requested to “decentralize all the agencies and powers to the township level except few things which must concentrate on the leadership of county level”. “Local areas, which had already had set up the fiscal affairs at the township level, need to develop the commodity economy for exploring more new financial resource for

7 See Ministry of Civil Affairs (2001, No. 61).

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the township. It was requested that parts of collected tax and fee from township level should be left for the township to mobilize the positive enrichment at the basic level and promote the rural construction”. The core of this request is to solve the structural problem of fragmentary tiao and kuai through ways of decentralization and restructuring administration. Through establishment of the financial agency at the township level, the township government can explore newer financial sources and achieve the objective of mobilizing enthusiasm and promoting the working efficiency of township government. The power of expansion was the subject of township reformation during the late 1980s. First of all, parts of provinces and municipalities started the pilot of reformation, and the central level began a nationwide reformation of “restructure of administration and decentralization” at the county level. Since the second half of 1986, Laiwu city in Shandong province first conducted the pilot work of comprehensive reformation at the county level, and obtained clear and positive effects. After the reformation of decentralization, the township government obtained unprecedented powers. In 1988, the conference of “experience of Laiwu” was convened to spread this experience to entire Shandong province and nation. Afterward, Zhucheng in Shandong province, Xinzheng in Henan province, Xi county Shanxi province, Huanrong in Hunan province, Guzhuozi in Inner Mongolia, Shishi in Fujian province, Qionglai in Sichuan province, Shunde in Guangdong province, and Dingxi in Gansu province followed the pilot of comprehensive reformation at the county level, which initially suggested the experience of “small government and big service”. On 23 May 1992, the first conference to exchanging experiences regarding the comprehensive reformation of county and township was convened. Prime Minister Li Peng proposed “to clear the relationship between county and township. The province, prefecture and municipality need to decentralize the power to county properly, and the county needs to decentralize power to township properly. Clearly the relationship between county and township is based on institutional transition of the county level, and to enable the township to implement more projects. Currently, many agencies of township are managed by the county directly. Regarding the dual leadership, does the

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township play the major actor, maintain the original vertical leadership, fulfill dual leadership, or decentralize the township? Different agencies can adopt different ways. The central level is not issuing any solutions to these problems, and leaving the decision to provinces. Nevertheless, it is not able to decide clearly about the relationship between township and county. We can start the pilot areas, and see what pattern is positive to the economic development. Then, we start to promote across all regions. According to the program of reformation approved by the Central CCP and State Council, State Commission Office for Public Sector Reform will overall dispose the reformation of county level at the right moment”.8 So far, the Central Government “has not entirely disposed the reformation in the county level”. In fact, this top–bottom comprehensive reformation regarding the pilot areas of agency in the county level did not continue to fulfill. On the one hand, the policy of mac- roeconomic rectification had stopped the reformation of county’s agencies from late 1908s to the early 1990s. On the other hand, the reformation regarding the clear relationship between tiao and kuai, which involves the interest of a certain number agencies, caused the absence of related policies. Therefore, the power, which had been decentralized to the agencies, eventually returned back to the original agencies under the urge of interests. From 1987 to 1997, the reformation of county–township level was stagnant in China, and “restructuring administration and decentralization” came to swing in-between “decentralization and centralization”. The paradox of tiao and kuai faced by the township government was unable to completely solve, and it never implemented the objective of original designation. To sum up, the movement of decentralization had developed with fanfare in mid- and late-80s of last century, and vertical agencies one after another had united to the horizontal management. However, this development did not last. After the mid-90s of last century, the constant development of vertical management has undermined the power of both county and township governments. The practical process of reformation has totally reversed the original intention.

8 To actively promote the reformation of agencies in county level (see Li, 1992).

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Since the late 90s of the 20th century, the power of township government has been continually weakened but the personnel of agencies have continually expanded. As a result, the condition of “government without money” appeared on numerous township governments, and produced a crisis for the survival and maintenance of the township governments. While the objective of decentralization was to give-up powers halfway to agencies, the objective of restructuring of administration was completely opposite. During the fulfillment course of 20 years, both “restructure of administration and decentralization” have not achieved the expected goal. The most related factor can be attributed to macro-institutional environment. On the hand of restructuring administration, the county and above county level do not have any positive effect, nor to the township government. Under this historical environment, the reformation of township institution has initiated again after 21st century. It is worth noting that the characteristic of this reformation is self-group by local, and its propulsion is from the financial crisis.

1.1.2.3. Third, separation between the function of party and government “Separation between the functions of party and government” is a very important program of political institution in China, and this policy was used to draw much attention. In August 1980, Deng Xiaoping’s address on the expansion conference of Politburo regarding the “Institutional Reformation of Party and Government Leadership” has become the guiding document for later political institutional reformation. This address specially emphasized the problems, such as “merging the functions of party and government, the party replacing the functions of government”, and the power excessively concentrated on the party. In 1982, the report of 12th Party Congress put forward the “reformation of leadership organization and cadres’ institution”, and pointed out “the proper division of work between the party and government, between the work of party and administration and production on the business”. The intense economic reformation has urgently demanded the reformation of its political institution. In 1986,

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Deng Xiaoping once again emphasized that “the reformation of political institution and economic system must heavily depend mutually upon each other”. “We need to pay attention on the reformation of political institution, including the separation between the functions of party and government and decentralization”, and need the field work and survey to find the corresponding program for reformation.9 In 1987, the “reformation of political institution” was placed as the agenda of 13th Party Congress, and proposed the “separation of the functions between party and government” for the entire disposition of reformation regarding the political institution. This congress pointed out that the meaning of separation between the party and government is the separation between the functions of party and government. “The leadership of party is the political leadership, such as the political principle, political direction, the leadership of important decision-making, and recommend important cadres for placement in the national political bodies”. The differences between the party and national political bodies relate to the nature, function, organizational type, and working style. We should reform the leadership system of party, divide the functions between party organizational and national regime, and straighten out the relationship between the party organization, people’s congress, government, judicial organization, mass organization, enterprise unit, and other social organizations. The purpose is to ensure division of different units and gradually focus toward institutionalization (The Document Research Center of CCP Central Committee, 1991). Therefore, separation between the functions of party and government is the major point of reformation at the regime of basic level. In 1986, the No. 22 Document of Central CCP clearly asked the grassroots regime to clear the division between party and government, and straighten out the relationship between the party and government. “After the separation between the party and commune, the phenomenon regarding merger of party and government still exists in some places where the party has replaced the government. The secretary of township government undertakes the whole administrative

9 See Deng (1986).

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works, which is negative to both the development of party and function of the government”. “The secretary of the township government must follow the regulations of the party charter and demand the separation between the function of party and government, concentrate on holding the party line and direction, completely implement the policy, and tightly grasp the spiritual and organizational construction of party at the basic level. Moreover, the party secretary of township needs to strengthen the leadership of the communist youth league, women’s federations, militia, to tightly hold on the political thinking capability of peasants, and improve the party and social atmosphere. The leadership of party secretary is focused on the leadership of politics, thoughts, policies, selection of cadres, and assessing and supervising the policies for resolving important problems regarding the administrative works instead of taking charge of specific works of government. The party secretary must guarantee the township government to follow the regulation of constitution and law for independently exercising the power, and to support the township government’s bold initiatives. On the relationship between the upper and lower levels, “county level and above the county level are also needed to reasonably resolve the problem regarding the separation between the functions of party and government, and to lead the work of grassroots according to the normal channels on the basis of separation between the functions of party and government. Any work belonging to the government does not turn to the party secretary of that township. The government at county level convenes several conferences for arranging governmental works every year, and straightens out and coordinates the relationship between the party and the government to conduct works”. However, the separation between the functions of party and government as the important organic component of politically institutional reformation is not practically conducted at the township level. The practical scenario at the township level is that the operation of township has not followed the trajectory of designation of separation between the functions of party and government. Currently, the centralized leadership and operation by the party committee of township level and the tension between party secretary and governor of township government are universal phenomenon.

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Contrary to this, “merger of party and government” has become the new tendency of local institutional reformation in some areas.10 A lot of areas fulfilled the de facto “merger between party and government” to decrease the conflicts among works, and increase the efficiency of works. The separation between the functions of party and government has not entirely achieved the initial objective of reformation. It is clear that the process of reformation on this side was constrained by the leading system of upper level.11 The current township mimics both party and government. We are not doing any judgment on this development. Is the separation between the functions of party and government a dead end at the grassroots?

1.1.2.4. Fourth, separation between the functions of government and enterprise In 1986, Document No. 22 of the Central CCP indicated the establishment of economic organization at many areas after the separation between the governmental and commune management, but practically the responsibilities between the government and the enterprise did not separate entirely. Many local governments do not have personnel for economic affairs. Despite this, they brought about

10 For example, the reformation of township institution in Hubei province which has the model of Xianan, and the Chaohu in Anhui province, conducted the merger of party and governmental positions at the township level. The actual practice in these areas has broken down the rule of merging party and government. 11 The 13th Party Congress indicated that “the condition of central, local and basic level is different, and the way to implement separation between the functions of party and government is different, too. The Central Party should propose the decision making on aspects of domestic affairs, foreign affairs, economic affairs, and national defense, and recommend personnel to assume leading positions in the state’s political institutions to conduct the political leadership on every side. Under the premise of implementing the central line and guaranteeing the unity of national decree, the party committee at the province, municipality, and county levels conduct the political leadership in their own areas…….. the separation between the functions of party and government at the township level cannot be implemented until they straighten out the relationship at the county level”.

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transformation in the economic organization at the township level when compared with the economic responsibilities of the previous government at the township level. As a result, the merger between the functions of government and enterprise has continued. The township government should be staffed with the professional personnel to charge economic affairs and to perform the function of managing economic affairs”. For this reason, to implement the separation between the function of government and enterprise is one of request for establishment of regime construction at the township level. This document also pointed out that “the economy managed by the township government is to exercise the economic, legal and administrative means for developing the productive service of commodity…. the township government wants to support the economic organization to exercise autonomous rights, and cannot undertake or replace the specific activities of economic organizations and cannot change the economic organization into a part of administrative apparatus”. From the perspective of policy designation, the township acts as the basic structure and function of grassroots regime after the separation between the functions of government and commune, and its works divided into economic parts (there is no unanimous name. some call it as the head office of agriculture–industry–business and others call it as an economic-associated cooperative. However, both of these are at the township level) charged by economic organization; the social part and its affiliated service works charged by the government; and political leadership by the secretary of the party. However, according to our findings, these designations have not been completely implemented. From late 1980s to first half of 1990s, the suc- cessive party and governmental leaders of township have held concurrent posts in economic organizations as the chairman of board or general manager under the wave of developing township owned enterprises, which clearly appeared as a non-separation between the functions of government/party and enterprise/government. Afterward, these enterprises directly managed by the township were generally poorly managed, and many of them suffered large scale of losses, restructured or only had the name.

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From the dimension of institution, the work separating the functions of government and enterprise has been completed. From the functions of the government, another problem has emerged, that is, the grassroots government has highly involved the economic activities. Behaviors of grassroots government have pushed the economic development, but it also widened the gap between the economic and social developments. As a result, this tendency leads to the governing crisis.

1.1.3. Comprehensive rural reforms The reformation of tax and fee has important effect on the behavior of township government. Or it is the logically starting point to explain the behavior of township government. Following the separation between the government and commune and establishment of township government, the central government has begun to carry out the establishment of township finance. In the early 1980s, the nation promulgated several policies to enable the agency of administrative business to collect fee for solving the financial shortage. These policies also reflected on the financial establishment of township. That is, five items of unified levies for township (tongchou), three items of collective funds at village level (tiliu), attaching fee to the educational business at villages and so on. In 1985, the Ministry of Finance enacted the Implementing Regulation of Financial Management at Township. According to the regulation, the major revenue of township was from the funds of state budget, funds of non-state budget, and self-raised funds. In townships, this practically expanded their autonomous power, and increased the consciousness of financial and routine powers for the grassroots government. Hence, the township government saw an opportunity to expand their fund-raising. This development carried out “expenditure decided by revenue” by the finance of township government, but simultaneously the “expenditure” did not have any limitations. In 1994, the central government started the reformation of “tax-sharing system” for strengthening its ability to collect tax and control. The reformation of sharing-tax system re-divided the financial and administrative powers between the central and local governments. Because the government at county level has the power

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to divide and approve the revenue and expenditure of township government, this phenomenon led to the formation of township governments with bigger powers for administration and smaller powers for finance activities. During the historical process of township reformation, the most intense and extensive influential event was the reformation of tax and fee, which started in 2000, among which the most comprehensive development was the abolishment of agricultural tax. In this background, the township reformation as the focal point of rural comprehensive reformation is both a supporting policy of tax-fee reformation and basic substance of construction at the grassroots regime. The purpose for initiating the tax and fee reformation is to solve the over burden problem of peasant. Previously, heavy burden among peasants was a serious political problem of Chinese society that even jeopardized the legitimacy of the regime. In October 1998, the third Plenum of the 15th Party Congress passed Central Committee of CCP Regarding Resolution for Several Problems in agricultural and Villages’ Work. In March 2000, the Central Committee of CCP and State Council issued the Notification Regarding Conducting the Pilot Work of Villages’ Tax and Fee Reformation. In March 2001, the State Council issued Notification Regarding Continuing the Pilot Work of Villages’ Tax and Fee Reformation, and in March 2002, the General Office of State Council issued Notification Regarding Conducting the Expanded Pilot Work of Villages’ Tax and Fee Reformation. Based on these documents, the reformation of tax and fee started the pilot work around 20 provinces, including Anhui, Jiangsu, Hebei, Inner Mongolia, Jilin, Heilongjiang and so on. The State Council issued Opinions Regarding Overall Promoting the Pilot Work of Villages’ Tax and Fee Reformation in March 2000, and asked that “all parts of the country should integrate with the practical condition, gradually narrow the collecting range of agricultural product tax and reduce percentage of tax to create a condition for the final abolishment of agricultural tax”. On 5 March 2004, the Premier of State Council Wen Jiabao during the Second Plenum of 10th National People’s Congress pointed out that “China will gradually reduce the percentage of agricultural tax from this year, averagely increase 1% per year,

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and completely abolish in the next five years”. The actual progress was fastened, and the state implemented the abolishment of agricultural tax in 2006. The Document No. 1 with the construction of a new village as its headline, issued by Central Committee of CCP in 2006, employed clear and large space to comprehensively propose the demand for township reformation. This document required to “stably advance the reformation of township agencies, realistically transform the functions of township government, innovate the operational mechanism of business stations in the township, downsize the personnel and agency and only decrease the organizational establishments of township during the next five years”. That is, the reformation of township had entered the phase of “comprehensive reformation of villages”, and the primary object of comprehensive reformation at villages was to set up the administrative and managing mechanism with high efficiency at the grassroots level, and system of public finance at township level. In addition, objectives of this document were to promote the reformation of township institution, to transform the function of government, to restructure personnel of agencies, and to upgrade the level of social management and public services. This document emphasized the need for a further improved fiscal management mechanism at the county and township levels, upgrading the ability of financial self-guarantee at both county and township levels, and a constantly normative system of financial transfer payment. Along with the constant expansion of tax and fee reformation, the township government had lost a piece of stable revenue source. The historical end of “agricultural tax” had set aside the “financial draw” legitimacy of township regime as the agent of national tax collection, and also weakened the relationship between grassroots regime and society on the drawing capability. However, the reformation of township is still filled with complexity and hardships in the post- agricultural tax era. After the abolishment of agricultural tax, the change of township government is on the historical environment of rural comprehensive reformation, and it is also on the social condition where the governmental reformation draws more and more attention. From the perspective of township government itself, these are times with most

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problems, confusions, and methods. From the train of thought on policy, how to set the position of government at the township level, how to operate the various functions of the government, while ensuring necessary existence of government at the township level, are considered as problems for observation and discussion. However, from the demand of economic and social development to government, it is clearer to understand the intensions of the government. The document of central government and addresses of leadership have clear statements. The current problem is how we understand the problem of existence regarding grassroots government and how to transform the operating mechanism of grassroots government. Moreover, how to understand the existence of problem regarding the China government system through the grassroots government and how to examine the innovation of China government through evolvement of grassroots government are topics for study and discussion.

1.2. Research Review Since the reformation, the study regarding the field of grassroots regime has obtained rich achievements. The domestic research is by governmental departments, academic institutions, and cadres at the grassroots level. From the historical dimension, the earlier activities of research were promoted by the research departments of government, and later by academic institutions that were deeply involved. After that, some cadres of grassroots involved themselves into the study field. On the other hand, Western studies are also flourishing, and the scholars of new generation are emerging one after another. The research field has gradually expanded, and the approach is more and more closer to reality. Both domestic and Western research achievements have rapidly increased and complement each other.

1.2.1. Domestic research After the reformation, the political study of rural research clearly falls behind the objective, i.e., change of political evolution. The research field of 1980s ignored the governmental and political studies, and the

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only involved part of politics was to explain the promotion effects of political reformation on the economic reformation. During the entire 1980s, Runsheng Du was the director of Central Rural Policy Research Office and he played a leading role in rural studies. Throughout this period, the articles and talking points of Runsheng Dun were highly concentrated on the economic reformation, and very few parts were related to the political problems. Despite the institutional establishment of Central Rural Policy Research Office, this office did not set up the department to charge the political and governmental problems. It is noteworthy that some research fellows started to think of political problems from the perspective of economic problems after the 13th Party Congress of 1987. Daoxia Huang was more concerned about the structural construction of villages, and her articles had emphasized the description of economic system in rural areas, and to set organizations for the reformation (Huang, 1983, 1991). Xiwen Chen focused on the problem research of grassroots organization all the time. In the late 1980s, his writing, Reformation Sketch of Economic System in Villages (Chen, 1990, pp. 24–26), concentrated more on the discussion about the establishment problem of villages’ organizational system, which was based on the household responsibility system, especially the separation of the functions between government and enterprise at the basic level. He presented that the basic problem of economic organization at rural area (or call the minimum object) was to guarantee staff to take care of things at rural grassroots. On the issue regarding the separation of the functions between government and enterprise, he pointed out to “promote areas with qualification to implement separation of the functions between government and enterprise”. Contrary to this, we do not bring such urgent requests, and we do not unduly criticize those collective economic organizations which are unable to cooperate in short- and mid-terms. Because the collective economy of rural areas faces a difficult problem given by the government, it should undertake to purchase agricultural products at cheaper rates for the government. Therefore, the collective economy of rural areas finds it difficult to stand for the position of peasants, and to maintain economic interests of peasants and the organization (Chen, 1990, pp. 37–39). In 1983,

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the Chinese Academy of Social Sciences presented Suggestions Regarding the Establishment of a Pilot County for Institutional Reformation in Rural Areas, and set up the Ling county of Decheng district in Shandong province as the base of pilot county, where the project charged by Xueyi Lu tracked and surveyed work over 10 years. As a result, he accumulated many important information, first hand (Lu, 1993, pp. 654–672). Lin country classified the survey information into three parts: “economy, society and politics”. The survey has paid attention to observe the organization at grassroots level. However, this project was only static description regarding the structure and function of township, and it did not deeply discussed the problem of political system, and nor concerned the operating problem of grassroots government. The key reasons why the political study of grassroots lags behind the economic study are the objective factor of reformation course and subjective factor of intentionally overlooking and evading the study regarding politics under the particular background. Those problems faced by the construction of regime at the basic level were more prominent and a related study was also obtained on the practical progress in the late 1980s. Meanwhile, the depth and scope of political study at rural politics has made important progress. Zhenyao Wang had organized and developed a series of solid field research, and these papers of field research tremendously helped us to understand the conditions of basic regime in that time. In 1986, the project led by Zhenyao Wang started the survey on the Anlu in Hubei province, Ba county in Sichuan province, Linxiang in Hunan province, Lushan in Henan province and so on, and its content included the construction of regime at rural grassroots, agencies of government at grassroots, economic organizations at grassroots, social organizations at grassroots, organizational consciousness and behavior of peasants. The study of Wang was more focused on the importance of development of grassroots democracy, and proposed to precisely define the relationship between township and village, to advance the political construction of villages, and to adjust the political relationship between peasants and state under the new economic system. Under the direct arrangement by Zhenyao Wang, the

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Ministry of Civil Affairs convened the national constructive theoretical seminar of rural grassroots governance in 1989, and set up the constructive seminar of China rural grassroots governance. From 1989–1992, this organization complied Practice and Think, which collects many initial field works about the rural areas. The Social Survey Center of Ministry of Civil Affairs published The Research Collection of Community Organization (village) at Rural Grassroots of China, Surveying the Condition of Hundred Counties’ Villages in China, The Present Situation and Reformation of Chinese Township Governance etc. In the late 1980s and early 1990s, the research of a sociologist Kang Li about the organization at township level was considered creative. Under his management, the project, Organizational Construction of Basic Level Community at Rural China, thoroughly conducted a survey in the rural areas of Ningxia, and completed the Township Organization in Rural China’s Community During the Social Change — Survey and Research on the Rural Community of Ningxia. This project, through the case study and non-typical survey, describes and analyzes the condition of township governance at that time, such as status quo of operation (transmission and feedback of orders), status quo of structure (personnel, household registration, responsibility system of administrative management), status quo of efficiency (completeness of assignment, levels of satisfaction, adjustment and communication between upper and lower levels, energy consumption), status quo of function (satisfactory percentage of cadres at the township level, trust level of peasants, mutual cooperation level among cadres and mass, the level of mutual understanding, the participatory level in the community) and so on. This project is meaningful because of the township study through the field of sociology. To sum up, there were not many research works of grassroots governance in China during the 80s. In most of these studies, the approach characteristic were either microscopic or macro- scopic views, while few of them were meso-views. Most works in the survey were descriptive, and few of them had deep observations and were analyzed by theoretical framework. After 1990s, the research topic about the grassroots organization at rural areas became an important field of interest in political and

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social sciences. Some students argue that the “economic approach” is unable to answer the problems of establishing and maintaining rural order (Zhang, 2000, pp. 1–9). Therefore, the orientation of new studies regarding the rural change was from a political dimension which appeared in a batch of studies on rural politics. These scholars focused their research on the vigorous development of villagers’ self- rule (Zang, 1999, 2001; Wang, 2000; Zhao, 1999, 2001; Xu, 1997, 1997a, 1997b; Jing 2004; Wu 2002, 2002a, 2002b; Yu, 2001). There are two viewpoints to study autonomy of villagers. The first one is inside view, which focuses on how to implement the self-rule of villagers, and how to deal with the relationship between villagers, village committee and party branch. The outside view is to discuss how to upwardly extend villagers’ self-rule, and to promote the entirely democratic progress of China. This viewpoint also explores how the external relationship limits the development of villagers’ autonomy, and the related paradox. Hence, this approach has brought the study regarding the relationship of township–village and politics of township. Although many researches of villagers’ self-rule have started to treat township as the variable, they are still focused on villages as the basic unit of study and observation. Apparently, the study which treats the township as the basic unit is not enough. Before the millennium, accompanied with the escalation of rural issues, studying township as the basic unit turned to the objective demand. Yong Xu (Xu and He, 2004) had surveyed the experimental liangtuiyixuan (Liang tui: mass recommend candidate of party committee and member of village committee; yixuan: party member with vote right to elect the party committee by secret vote) at Youngji town as their study core. Their study explored the experiment relating to the meaning of township democracy through the description of specific electoral rules, and inspected the problem of township system and the process of interaction between county and township behind the election. Weiming Shi and Fan Li also concentrated upon the discussion about the development of newly appeared election of township and democracy of grassroots (Shi, 2000; Li, 2000). These researches are no longer limited to the category of villagers’ self-rule, and have begun to be concerned

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with the development of villagers’ autonomy and adaptability problem of township, and brought up how to change the problem relating to the political structure outside the village. Nevertheless, the flaw of this research was that “township” has not composed of study core and township is one of explaining variables. These studies employ the dimension of autonomy to concerning the elections at township level and the relationship between election and grassroots democracy. The studies did not treat the township as the level of political system to study its operation and problems. Therefore, the depth of these researches has limitations. Since late 1990s, the township was gradually targeted by the scholars. Observations and studies of multiple dimensions have developed, and these studies highlighted several important problems. The studies of the following three problems require our attention.

1.2.1.1. First, reformation of township finance and tax and fee Generally speaking, the study in this area started in the early 1990s. Tanzhen Sun and Gang Zhu conducted a tentative systemic study of township finance (Sun and Zhu, 1993). The research of Jing Zahng was on the fiscal institutions in grassroots governance operations, and his important views were on the analysis of the social consequence of grassroots caused by the flaw of its fiscal institutions. As a result, this development leads the behavior of grassroots governance into the uncontrollable direction (Zhang, 2000). Zeqi Qiu described and analyzed the procuring system of fiscal revenue and management of finance at the township level (Qiu, 2000, pp. 167–199). The study of Shiding Liu started from the structure of township revenue, explored the practical operations between revenue and expenditure at the township level, and analyzed the fiscal source, revenue management and spending of township government (Liu, 2000). Licai Wu compared the change of function at the township government of both Hubei and Anhui provinces after the reformation of tax and fee (Wu, 2006). Fangmin Yue and Zhilan Li started the case study on the reformation progress regarding the tax and fee from villages of Shunde, Guangdong province. According to their statement, constant fiscal

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transferring payment is not a guarantee to create a necessary and sufficient condition for continually decreasing the burden of peasants, and they emphasized the fundamental effects from “institutional reformation, such as governmental functions and agencies, and management of public good”. The project led by Jun Han employs the approach of case study and through the primary inspection of initial reformation in Heilongjiang province. His project highlights the importance of “follow-up reformation” to reformation of rural tax and fee. He treats the follow-up reformation as a grand systemic project, which involved the interest adjustment of every side (Jun Han, 2005). The study of Xiaoshan Zhang concerns the rural problems after the reformation of tax and fee, and the basic reformation of rural governance is to solve the “rural issues”. The above-mentioned researches are either from a view of fiscal institution to explain the regulation of township governance or from the view of practice to propose the change of fiscal institution to the challenge of rural governance and its response policy. Both the views expanded the question field of political study at rural areas. Most of these studies concentrated on the observation and analysis of dimension on the finance and tax institution, and paid attention on the conception regarding the direction of policy designation. However, they are short of dynamic observation and mechanism perspectives on the behavior of township government, and are not able to historically review the township problems and compare and analyze the different cases.

1.2.1.1.1. Position of township government The problems of township government such as institutional bloat, fiscal hardship and low efficiency of public services attracted many scholars to retrospect the position of township government. Many scholars based on their researches categorized the “opinions of reformation” into three forms: “abolishment”, “preservation” and “flexible treatment”. Scholars who favor “abolishment” are Young Xu, Tiejun Wen, Jianrong Yu, and Dansheng Shen. Xu advocates the model to abolish the county government and change it to the agency of county, and to

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expand the autonomous right of towns and change it to autonomous unit under the level of city. Wen addresses the change from township government to office. He also considers both towns and villages as self-rule. Yu, Shen and other scholars propose the model of “township self-rule”. They favor abolition of the township government in order to set up autonomous organizations for improving and strengthening the function of county’s agencies. According to the statement of these scholars, this is the only way to solve the “rural issue”. Students, who favor the opinion of “preservation”, support to process the reformation under the original frame structure, which is the realistic option. On the method of specific reformation, Guoying Dang favors the concept of setting up of a big rural community, to narrow down the scale of township and abolish the management level of village. The township implements the functions of public management done previously by villages, the township community realizes the democratic election, integration of administrative and judicial powers, and concurrently assumes positions of both party secretary and village committee chair. Weiping Hunag advocates to experimen- tally practice the direct election of township leader and to strengthen the establishment of township people’s congress. The purpose of above works is to complete the arrangement of township politics, and strengthen its democratic orientation. Licai Wu proposes to reform the township government into a cooperation organization between official and unofficial sides, to increase the autonomy of township government, and change the condition of township attached to the county government. Xinguang Zhang recommends that the individual range of functions between central, provincial, county and township governments should be clarified first. This could be followed by consolidating presently available reformation thinking which may include abolishing cities, strengthening counties, restructuring townships and villages. Such a consolidation could help in designing a macro project for the reformation of county and township agencies and the national administrative institutions. Those who support a “flexible thinking” emphasize the difference in the basic conditions of national social and economic development, and suggest that realistic conditions on the ground alone should decide whether the townships

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should be abolishment or not. Xuefeng He and other scholars advocate the following five principles, i.e., difference, attachment, adaptability, completeness, and passive administration for designing the systemic reformation of county and township. Generally speaking, points of these researches start from three dimensions: institutionalizing agencies, restructuring of personnel, transforming governmental functions and finally, constructing grassroots democracy. However, these policy propositions are too anxious in finding a clear direction of future for the grassroots government.

1.2.1.2. Second, governance of township sand villages Since the start of the 21st century, many scholars have gradually started paying attention to the township government and promoted the study on the governance of township and village because of the escalation of serious rural issues. From the dimension of political- sociology, Jing Zhang treats the grassroots organization as a politically analyzed unit and employs the approach of framework-institutional analysis to explore the authority source of township and village governance, the relationship between township and village governance and social interest, influence of the tax system, network of cadres, and defense of grassroots governance to the national jurisdiction. He attempts to explain the key characteristics of the rural governing establishment (Zhang, 2000). Jingben Rong and others proposed the concept of “pressure system” that describes “the operation of organization in each level under the pressure of evaluation system” to explain the characteristics and factors of governmental behavior at grassroots level (Rong, 1998). The research of Hairong Lai drew the theory of public services and “governance–good governance” and international comparative approach into study of rural politics. This has helped to integrate the new rising theory of governance and international comparative dimension into the study of rural politics. The rural governance and politics is drawing more and more attention of scholars, and they have raised more and more practice and theoretical puzzles.

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After the late 1990s, cadres of grassroots emerged as an important power in the Chinese political structure. These researchers had been conducting research about the grassroots for quite a long time and gained immense knowledge of the crux regarding the operation and mechanism of township. These people, assumed as the cadres of rural areas for quiet long time, have witnessed the changing evolution of village and politics of village. Their direct experiences have provided very practical observation and recognition, and their words provide important information about rural politics, such as study of Changping Li regarding the township governance, study of Wensheng Chen regarding the reformation of rural tax and fee, study of Xinguang Zhang regarding the case study of institutional reformation in Henan province, and study of Zhongqiu Ouyang regarding the reformation of township. The study of township governance in late 1990s was focused on practical problems of daily life. Such studies also proposed the “reformation principle” and direction of township governance. These research topics include the problem of tiao and kuai segmentation at township government, bloated problem of township institution, problem of relation between township and village among villagers’ self-rule, the burden problem of peasants and the dilemma of township finance. Some scholars paid attention to the failure factor of previous reformation regarding the township institution that was closely related to strengthening of official power and weakening of unofficial power. There have been numerous studies and theoretical exploration of grassroots government since 1990s. However, the fluctuations and complications in the daily life have led to the emergence of new research topics. Before the complicated daily life, we need to re- examine and retrospect the existing theoretical explanations for understanding and explaining the newly emerged problems. With advancement in reformation and economy, the problems of the grassroots government become more complex and its performance becomes unsatisfactory, thereby drawing the attention to the construction and reformation of grassroots governance. Under such

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circumstances, the study of township governance, in fact, acts as a pathfinder for the reformation of the entire governmental system.

1.2.2. International research Since the reformation, especially past decades, research of western scholars who study grassroots government and politics of China should be considered. We must pay attention to such western studies.

1.2.2.1. First, course of development China’s study by western scholars can be traced back to sinology of Europe in the 19th century. In 1930s, the study center of sinology had started from Europe to America. The traditional sinology was concentrated on the fields of philosophy, literature, and history and focused on the Chinese history and ancient books. The study about contemporary China was carried out post-World War II. In the words of Elizabeth J. Perry: “Contemporary China study of America was almost the same time of the birth of Peoples’ Republic of China”. During the period of transition from traditional sinology to contemporary Chinese study, John King Fairbank played a very important role and his great contribution helped to promote studies on China in America as a systemic and influential subject. In 1956, Fairbank set up the Center for East Asian Research (Fairbank Center for Chinese Studies) in Harvard University, which was heralded as a new stage for western scholars studying China. After 1950s, scholars in the field of historiography, sinology, economics, anthropology, and political science developed interest in the contemporary China studies and introduced this field to the mainstream of western academia that gradually developed to a comprehensive social science studies. Apparently, the study of China politics drew more attention of scholars and the result of their research reached a certain degree of achievement. Before 1970s, western scholars focused on the policy of new China, governmental institution, and governing theories to conduct their general and descriptive research. After the reformation

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of 1978, they started visiting China for collecting information and carry out field research which was considered as a major improvement in the research method. Their research involved rural reformation, market transition, social stratification, local political change and so on. The “western center theory” started to revise, which advocates China to be the starting point. The prevalent model of “impact- feedback” obtained the retrospect and revision where western study gradually emphasized on the internal change power and problem of social structure of Chinese society. The focal point in contemporary China study has undergone the process of changing from high level to basic level. Before 1990s, western scholars (Andrew Nathan, Michel Oksenberg, Tang Tsou and so on) who studied China relatively focused on the high politics and macro political analysis and these studies continued the concern of national power. However, the new basic problems merged, such as how the national power operates in post-Mao period and what is the impact of national power on the control and influence of Chinese society (decline of control or only change as the way). After 1990s, the concern in China study has gradually changed from central to local level that altered the view on the studies significantly from top to bottom and from macro to micro. The reason is based on the situation of reformation and development in China. Accompanied with the decentralized direction of Chinese political structure, the plan of state further transferred to market and decentralized power from central level to local level, especially the tax system reform between central and local level in 1994, and Organic Law of Village Committee in 1998. The local government and grassroots politics appeared more independent, plenteous and more and more western scholars became well aware of the importance of grassroots and micro problems because it is not enough to understand China politics and government by studying high and macro level alone. Moreover, the contemporary China study by western scholars, that underwent accumulation of three to four generations, has formed a mature field of study regarding the study of macro- and high-level politics. Young scholars who attempt to make academic contribution focus more on the study field of new micro and grassroots politics (Joshua Fogel). Hence,

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western scholars of the present generation tend to select more professional and thorough study dimensions and their researches also show the pursuit of innovative theory, especially as articulated by Elizabeth J. Perry. In her publication of 1994, Trend in the study of Chinese Politics: State-Society Relations, it has been pointed out that the China political study by western political circles mainly adopts the theoretical mode of state-society and this theoretical framework is concluded from the political developmental experience of modern Europe. The political developmental experience of China is different from the west, but they employ the western theory to analyze China. That is, the study of China politics is still considered to be on the experimental phase by western theories where the field of China study is the training base of western theories. Perry does not think China as a consumer of western theories. Rather it is the “producer” of original political theories. That is, China should produce its own basic theories different from the west. There is abundant political practice in China to enable the development of its own political theories rather than following western practices and theories.

1.2.2.2. Second, key questions Under the new historical condition, there is an abundant supply of western studies pertaining to the grassroots politics and government in China. The following part will highlight some key questions from such studies.

1.2.2.2.1. Study of grassroots democracy China passed the Organic Law in late 1990s to promote the villagers’ self-rule nationwide and direct elections at village levels. Later, the townships also implemented direct elections in their townships. In the local areas of China, there has been a large increase in electoral activities and continuous merger of democratic innovations signaling the commencement of an entirely different political system. Under the open policy and high progress in information time, the new political situation of grassroots governments conducted with grandeur and at

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a spectacular scale immediately attracted western scholars. The key questions concerned by their research topics included: Where is the dynamic mechanism of grassroots election?; What is the relationship between a village election and its social and economic development?; What are the political effects of grassroots election? Scholars who researched these questions are Kevin J. O’Brien, Lianjiang Li, Melanie Manion, Tianjian Shi, Lawrence Susan, Allen C. Choate etc. In the new millennium, the theory of “consociational democracy” was attracted by the academic circle. Under the special circumstances of China, scholars treat “consociational democracy” as an important way to promote and practice democracy in China. Innovation at grassroots governments is given a new understanding in “consociational democracy”. For example, the sincere communication of township budget is becoming the new hot topic of study in the field of grassroots democracy (Baogang He, S. Philipp Hsu). Moreover, some scholars have specifically begun to study the functions and positions of social groups in the democratic development under consociational democracy. The research of Kellee S.Tsai is concerned with the political trends of private enterprises.

1.2.2.2.2. Study of grassroots conflict Conflict and order are always the basic problems concerning political science. Accompanied with the progress in reformation and development, the increasing conflicts at grassroots level are a prominent phenomenon. Western scholars also quietly raised concerns on the social conflicts and grassroots governance. “Exploring the contentious politics of contemporary China has developed the field of fast growth” (Perry, 2008). Of course, Perry is the earliest scholar who expressed concerns on this topic. Afterward, Kevin O’Brien and Lianjiang Li studied events of complaint lodging and rightful resistance of mass and derived an important conclusion. The study of Yongshun Cai and Feng Chen was related to workers’ resistance, and China Kwan Lee studied the topic of migrant works. In addition, Minxin Pei (2002), Tony Saich, and David Zweig have performed a professional analysis of conflict and resistance regarding the study of local governance in

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China. Studies of these scholars are based on first-hand information, and some of them directly observed the events of resistance and conflict. Therefore, it can be concluded that most western scholars have made impressive research on the influence of conflict and resistance on China politics. According to the point of Tony Saich (2001), the occurrence of grassroots resistance reflects the relationship between state and society transforming from “state manipulating society model” during pre-reformation to “negotiation relationship” post- reformation. Yingshun Cai thinks that the limitations of the current judicial system would lead to a collective action by the citizens to protest the rampant corruption of cadres, by methods such as petitions, mass protests and probably even sit in with threats to suicide. Such protest actions are likely to win the wide support of society. However, gaining such a wide support of society may immediately be construed as forming a challenge to the social stability and governmental legitimacy. Such citizen’s protests reflect the new mode of interaction between state and citizen, and it also means that government must try to conduct the limitation of its power for maintaining its legitimacy and social stability (Tsai, 2007).

1.2.2.2.3. Study of government governance The discussion on governance mainly concentrates on the role of government in the economic development. Thomas Bernstein and Xiaobo Lu investigate the factor that caused a tense relationship between central government, local government and peasants and conclude the local government of China has both predatory and developmental characteristics. Contrary to this, Jean Oi gave positive commentary on the economic behavior of local government. She emphasized the fast development of China villages where both the government and the enterprises collaborated at the village level to speeden up economic development. She calls this phenomenon “local state corporatism”. From the sociology dimension, Nan Lin evolved a complementary concept of “local market socialism”. Vivienne Shue through the research of Xinji city in Hebei province indicated the developmental characteristics of the local government instead of its

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entrepreneurial characteristics. Minxin Pei, Yongnian Zheng, Kenneth Lieberthal, and Michel Oksenberg focused their study at a macro level to analyze the governance and mechanism of Chinese government. Liliy Tsai and Scott Rozelle researched from a micro level to study the rural governance, such as how to provide the public good to the countryside.

1.2.2.2.4. Study of the operation of grassroots government Around the new millennium, the operations of grassroots governments in China became the new observational field for scholars and some of them have tentatively presented analysis and judgment on the unique characteristics of China. Kevin J. O’Brien and Lianjiang Li highlighted the problem of selective implementation of policies at the grassroots government level. That is, many cadres work hard to implement some unpopular policies at the village level, but refuse to implement popular policies. This practice of selective implementation has been entrenched in rural China. In his direct observation of townships, Guangxue Zhou deployed the organizational dimension to prove the theoretical theory regarding the characteristics of government at the basic level. He observed the provision of supplementary money from the upper level to lower level for the construction of local economy. Such governmental behavior where upper level extorts money from lower level was called by him as the phenomenon of “inversely constraint soft budget”. Later, he also proposed suggestions to resolve the collusion problem among local governments starting from the lower level for dealing with the assessment of upper level.

1.2.2.2.5. Enlightenment to us When researching the Chinese political system, the western scholars, over a period of time, moved from the mainland to the local levels, and their fields of research too kept changing. We also found that the important factor to support this change was change in the research methodology. Before reformation, western scholars often conducted reviews with people in mainland China in Hong Kong. Currently, the

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precision of field research conducted by western scholars is no less than Chinese scholars. For example, Perry used to study Chinese at Taiwan and collected information on National Palace Museum in Taiwan when she was a PhD student. She did not go to China for field research until completing her dissertation. Later, she visited China to conduct field research every year and cooperated with Chinese scholars on research project. The earliest research of Jean Oi and Andrew Walder were conducted in Hong Kong and later they set up their research base in the Zouping in Shandon province. Now, both of them visit China for field research almost every year. Kevin O’Brien cooperated with Lianjiang Li in conducting numerous field researches in China. Melaine Manion and Tainjian Shi conducted local surveys, in large scale, in China. Achievements of these researches were unimaginable in former times. In particular, students of mainland China have entered into western academic circle which have provided fresh dynamism and promotion to China studies. Presently, interchanges between western and Chinese scholars are frequent on research methodologies. The mutual influence is gradually expanding and has even led to some integration of ideas and methodologies. However, the scholars are unable to keep pace with the rapid economic development happening in China and the academic studies are far from enough. Although there have been continuous achievements of the government that increase the study level, these studies do not have sufficient scope and depth in studying grassroots government. First of all, the current topics studied are related to political situation instead of government’s role in economic development. These researches have focused on local and grassroots levels, but most of them revolved around the special political phenomenon, such as social protests, conflicts, elections, and finances. They do not revolve around the specific political processes and governmental operations. Their methods of observation are very rough and the conclusions lack depth. These researches are usually relatively fuzzy and provide a rough description on local politics and government, and do not concentrate on the different levels of local government and the successful operations by several agencies. First, their dimensions of observation and study are as outsiders where they view the government from its

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relationship with the people, and from partial behavior of government to local governments. These researches have not focused on the conduct of the government with regard to its role in the development process, with the result that the findings of such research only provide a superficial view as an outsider. Second, some researches involving government’s behaviors did not focus on the reasons but focused more on reasons from behind, thus denying a perspective about the inner operation of government. These researches primarily were around the operation of government and concentrated on one part, such as fiscal operation or implementation of a certain policies. They did not conduct a deep analysis about the interactive process in governmental inner system, and interaction between different levels of governments, different agencies of government, and governmental system and society. Third, the current research literature lacks the description and analysis regarding grassroots governments and their inner structure. During the developmental process in China’s grassroots governance, the structure and type of grassroots government is always rigid, thus the operation of grassroots government is complex and sensitive. Therefore, western scholars encounter difficulties when they attempt to enter and collect information regarding the grassroots governments and they find it hard to conduct in-depth studies on the daily activities and institutional character of grassroots governments. As a Taiwanese scholar, Szu-chien Hsu, pointed out “two clear deficiencies of current English literature” on the research report of governmental institution. First, the discussion about the government’s institutional reformation is only limited to the level of central government and very few of them contact the relevant officers dealing with institutional reformation at the province and below levels. Second, the grasp of development efforts post-1993, which involves coverage of all levels, was narrower.12 Having said that, the studies relating to local government and politics have obtained tremendous progress in the past two decades, and research achievement has been inspira- tional. Nevertheless, some important questions about grassroots governments and political study have not been taken into consideration.

12 See Hsu (2006, pp. 3–4).

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The reasons are two-fold: western scholars find inconveniences and stumbling blocks in entering their chosen research field, and second, gaining access to the required data. My research work in this field is supported by the research data that I accumulated over a period of time. I was even highly inspired and instructed by many western scholars.

1.2.3. Rethinking township research To sum up, both domestic and international research teams have been conducting research about the grassroots politics in China and there have been gradual achievements. These teams have been studying grassroots governance from multiple dimensions and perspectives and such approaches can be divided into “inside and outside government”. The researchers treat the government as a “main body” and compose another main body under the analytical framework of “state– society”. This viewpoint indicates that the grassroots governance operates under an interactive system between state and society where unreasonable powers between the state and the society lead to the problems in grassroots governance. There are two approaches to studying this process. One approach studies the achievements of modern China history (Prasenjit Duara, Philip C.C. Huang), and explains the structure of grassroots society and the governing organization. This interpretation from a historical perspective shows that modernization cannot integrate society of the countryside with the governing establishment at the center. Even under the condition of almighty state, it lacks power to penetrate the grassroots society where each grassroots society is an isolated and separated comb structure (Vivienne Shu, Qiang Li). Even after reformation, this condition does not have any fundamental change. As for the connection between state and society, the grassroots government is empowered by state and thus governs work on its behalf. However, the grassroots governance does not take efforts to set up institutions to work jointly with the society. Because the grassroots government does not set up the channel of institutionalization, there is disconnect between the

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grassroots government and the people leading to insufficient dynamism on the part of the grassroots government to perform the function of delivering public goods. With the power of decentralization and self-raised finance, grassroots government as an independent organizational unit, with inclination of egoism, has turned into a recipient of profits from economic development. Consequently, this development leads to the appearance of crisis in grassroots governance (Jing Zhang, Shanhua Yang). Another research emphasizes the influential factor of national ability. The reformation released the “free flowing resources” that provided the “free activity space”, thus China transformed from a “general society” into “post-general society”. As a result, the monopolized power of state based on resource and social activity is gradually weakened and the state empowers more autonomous powers to society and market. Nevertheless, the functional niche of government remains immature, and ability of self-organization remains underdeveloped. Hence, the controlling power of state to society is gradually decreased, the autonomous power of society becomes uneven and the provision of public services lingers between the failure of market and low efficiency of government. All of the above-mentioned phenomena cause a serious stagnation in social development and intensifies the conflicts among grassroots society (Liping Sun, Lily Tsai and so on). The third research emphasized the disadvantaged condition of the society. They indicate that the unit was an intermediary of interest integration between state and society during the period of pre-reformation under the “work unit” system. Accompanied with the collapse of such units, this integrated system has gradually become impotent. Before the appearance of new integrated intermediary and channel, it is necessary that the influence of such a loosened and atomic society becomes powerless to the state (Qiang Li, Peilin Li). This impotent tendency may lead the society without any strong power of policy negotiation resulting in an ineffective grassroots society that lacks the power and pressure to provide public goods. Moreover, an increase in the number of concrete analyses on different problems enriches the discussion of governmental outside access road. Scholars pay attention on the participation and conditions of grassroots politics where the low levels

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of democracy are unable to influence governance, however, part of social forces can influence governance. The uneven political participation produces social conflicts and problems. Some scholars analyze the uneven influential power from grassroots society to different social forces; therefore, it distorts the orientation of policy. Regarding the inner access road of government, researchers primarily concern the different behavior characteristics of different levels of government. They note that different value orientations (encouraging content and behavior motivation) exist between central, local and grassroots governments on policy formulation and implementation. The reformation, starting from decentralization, is planned to transfer part of the financial and personnel powers to the local government for mobilizing the enthusiasm of government at each level. Simultaneously, central government evolves measures to control and monitors officials at each level to ensure that the plan targets are met successfully. Hence, the concentrative mobilization of central level gradually transited to the pressure system of decentralization (Rong, 1998). Under the pressure system of decentralization, the grassroots government mainly caters to the assessment of targets from upper level. The central government has no absolute powers over local government as the autonomous powers of local and grassroots government are very strong. From the point of central level, it hopes to enhance the legitimacy of governance through upgradation of its management and services for garnering popular support. On the one hand, the “popular support” has not been able to help in achieving the operational target and posing the hand constraint. On the other hand, economic development is the most prominent target of assessment and management of grassroots government. For this reason, grassroots government intentionally neglects public opinion that leads to the stagnation of social development programs because its major consideration are investment incentives from economic development policies. From the point of grassroots government, the administrative decentralization, which is based on the financial reformation as the core, directly provides powerful institutional incentives to the local government for participating in economic development, and stimulates the local government to deviate from its public

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responsibility of managing community and organizing public lives. The local government, in turn, actively seeks economic development for satisfying the group interests at the local levels (Jean C. Oi, Andrew Walder, Shanhua Yang). For example, the study of Zeqi Qiu indicates a strong economy for the township where it would dominate affairs of community and challenge the authority of upper level (Qiu, 2000, pp. 167–199). Some scholars’ research related to the financial aspects of government further confirm the presence of such challenges (Susan Shirk, Elizabeth J. Remiek, Cristine Wong, Shiding Liu), and their researches indicate: “task of collecting tax is completely relied upon the township governments, and existence of self- collection of revenues is an incentive to the township government. Under such a condition, township governments would like to balance between completing the task of collecting tax and obtaining more financial revenues, and they often tend to accomplish the task of collecting tax at the very low level” (Liu, 2000, p. 154). Behind the characteristics of governments in different levels, the controlling ability and the implementation path chosen by the governments comprise another important point discussed by scholars (Landry, Maria Edin, Xueguang Chou). Landry notes that the central government plays a dominant role over the local government by manipulating the organizational personnel and thus retains control with increased economic powers among the decision makers in the local government in the reformation process. However, the central government is split into different departments and central policies also exist in a certain priority order. Therefore, the central control of local governments does not lead to local implementation of the central government policies. During the process of implementing policies, the local governments possess a certain space of autonomy. Observation of some scholars to behaviors of local government and conflicts among grassroots enriches the understanding of government’s controlling power. For example, Bernstein explains the problem faced in reducing peasants’ payment tax where the central government did not have sufficient controlling power over local government with the result the efforts resulted in failure. Analysis of Xueguang Chou regarding the collusive behavior of the local governments exposes their autonomous

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powers. This is an unexpected outcome of the process of collective decision-making and strengths of “incentive institution”. Accompanied with the rising of “governing theory” at the end of last century, some scholars took great efforts to explore the governing structure of the inner government and their researches proposed that the governing structure were not systemic and consistent. This phenomenon caused fragmentation of government authority and decentralization of decision making (Kenneth Liberthal and Oksenberg, Policy Making in China), and exposed the problem of governing the grassroots society. Some studies noticed the problem arising out of sharing “information” among the decision-makers at the upper and lower levels. That is, the upper level uses the information to manipulate the lower level, and the lower level uses the controlling information to turn the upper level into a mere figurehead. The obstruction in the flow of information causes delays in the decision-making and implementation of public services. Several studies have paid attention to the concentration of power among government institutions and this phenomenon reflected on the relationship of institution and personnel between upper and lower level. The upper level of institution monopolizes powers which render lower level unable to take responsibility. It is hard to straighten out the relationship between tiao and kuai. With the concentration of powers at the upper level, the people at the top control the actual power without any decentralization resulting in utter chaos at the local government level (Yuan Xu, Licai Wu and Hairong Lai etc.). Generally speaking, some of these researches about the grassroots governance are from the side of policy summarization to panorami- cally introspecting the changing processes of the grassroots governments, but they do not provide important answers about the process, that is, they are insightful but lack explanations. Some of them are from different analytical approaches and theoretical points to introspect the problems of grassroots governance, but they tailored the experience and facts to fit the map of theory. Even though the Taiwanese scholar (Hsu, 2006) studied the reformation of government institutions including at the township level, the research did not deeply introspect its bloated scale, messed up institutional settings,

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financial hardships, enormity of business units and uneven distribution between financial and governing powers and so on. Moreover, we could not take into account what reformation model the current local institution will use in what way to form interactions with state and provinces and bring about what result of grassroots. We also ignored a fact; that is, more we go to the lower levels, more fruitful is the impact of reformation.13 My personal opinions are that all researches regarding the grassroots government are important and provide a good base for further observation and study. However, the complexity of problems at the grassroots governments in China is beyond any explanation of current theory. In western countries, political and administrative systems have their own individual tracks, and the connection point between these two tracks is clearer. Hence, political developments need not discuss specific problems of governmental operation. China is totally different. The relationship between politics and administration is close and special, and we must pay more attention on the administrative process if we want to understand the political process. The institution of political system in China combines the political process with the administrative process under some conditions and vice versa. Therefore, political development must concern with the operative problem of inner government. The study of grassroots government needs to extend the logic analysis of local politics and conduct more in-depth theoretical exploration from more sides. From current research, it appears that the researchers did not fully understand the problems regarding specific characteristics of rural politics and the crisis in rural governance from the dimension of “institution” to discuss the behavior of grassroots government. Of course, it is not an initiative to explore governmental problems from institutional dimension. In recent 30 years, institutional problems have been more and more extensively applied to economic and political studies. Institutional problem was applied to explain the growth and decline of economy, political stability and disorder. Some researchers have mentioned the importance of institutions in the study of township and emphasized that “traditional bureaucracy strengthens grassroots

13 See Hsu (2006, pp. 3–4).

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governance because it is unable to set up the joint association of interest between grassroots governance and society which cannot improve the efficiency and control problems. Therefore, the basic guarantee to long- term stability in the rural areas is to make sure that the constitution and rule of law are applied as the base of villagers’ self-rule and to ensure the social base of authority by the way of institutionalization” (Jing Zhang). Some researches that conducted the case study of township administration, presented institutionalization and formalization as the clearest tendency of township administration. They also pointed out the concurrent existence of institutionalization and formalization which tremendously reduced administrative risks for the township government (Liu, 2008, pp. 152–153). However, such researches do not distinguish between institutionalization and formalization, nor conduct systemic arrangement and perspective to practical operation of institution. The institution is one of the explanation factors in current researches, and these studies do not give any comprehensive investigation and systematic analysis. The reason that this study presents the concept of institution to analyze problems of grassroots government is because institutionalization is considered to be an important characteristic of modern government. On the one hand, the construction of grassroots governance increases the institutionalization levels of government and is very meaningful to strengthen the community and public order among the grassroots public. On the other hand, implication of “institutionalization of politics” demands that the political system involve the participation of grassroots public and encourage democratization”, however, governmental institutionalization puts the focus on the establishment of government itself as an institution. It is more direct and targeted to problems faced by the grassroots governance. That is, the important characteristic of this study is to merge the specific operation of grassroots government, and conduct an institutional analysis of government.

1.3. Research Design The basic problems of researches mentioned above arise from practical daily life with the focus on grassroots governance. What is happening to problems of grassroots government? What should we do? These are

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the basic concerns of this research. By summarizing previous researches, I have come up with the basic strategy for this research.

1.3.1. Theoretical framework Government is the classical problem of political study. While the discussions in classical political theories are about the necessity of a government, political sociology arises from an interaction between politics and society to ascertain the positions of the government. On the other hand, political economics explores the governmental function form the dimension of economic market and development. The Formation of National States in Western Europe, Charles Tilly (1975, p. 70) points out four characteristics of a modern nation. One characteristic is differentiation where organizations are differentiated within the region. Another characteristic includes autonomy and centralization where all branches of institutions coordinate by the way of institutionalization. The grassroots government is positioned between state’s authority, upper level and grassroots society. Analysis of grassroots government provides two dimensions: from top to bottom, and from bottom to top. The dimension of top to bottom involves how the state controls the grassroots government, how state authority penetrates into grassroots society through grassroots government, how grassroots government implements the national polices and rules at grassroots society, and how grassroots government procures resources from grassroots society and obtain the legitimacy. The dimension of bottom to top involves how grassroots society receives satisfaction from public order and service, how grassroots government deal with the supervision and management from the upper level government, and how grassroots society responds to the management of grassroots government. The research of grassroots government involves three dimensions.

1.3.1.1. First, from the point of relationship between grassroots government and society This first is to analyze how the grassroots government controls and mobilizes society, how grassroots government exercises authority on

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the society and penetrates into society. Michael Mann divides the national power into despotic power and infrastructural power, and latter is when the state practically penetrates the civil society and effectively implements its policies within the ruling realm (States and World Capitalism, 1988, pp. 5–9). The grassroots government is the main body to fulfill the public policies of the state. The basis to judge the capacity of a state is by investigating its capabilities in controlling, penetrating and mobilizing of the grassroots government (Li, 1998). The second dimension analyzes how the grassroots government procures resources from the society and obtains legitimacy. In the book On Civilization, Power, and Knowledge (Elias, Mennell and Goudsblom, 1998, p. 139), Nobert Elais treats the monopolization tax as the basic characteristic of modern nation. In addition to procuring the resources, the study of Weber, regarding the study of legitimacy, emphasizes the authority of the state obtained by social trust and support. When scholars study China’s development after reformation, some of them treat the procuring capability of central government as a resource to analyze the capability of the state (Wang and Hu, 1993). The third part is to analyze how the grassroots society transmits its demands and intentions to the grassroots government, and how it helps the grassroots government to implement political participation. Absorbing political participation is one of the most important functions of contemporary political system. Samuel P. Huntington even treated the popular political participation as the watershed between modern and traditional regimes (Huntington, 1989, p. 27). The government, which wants to obtain legitimacy, must have representation, and guarantee effective transmission of the intentions of the grassroots society. When we analyze the interaction between grassroots government and society, the dimension of political participation is indispensable. The fourth one is to analyze how the demands of grassroots society are met and satisfied. The government is mandated to provide fairness in public order, and public goods and services to its society. The government is rated based on the effective management of social conflicts and provision of public goods and services because these

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targets signify that the grassroots government is responsive to the demands of its society.

1.3.1.2. Second, interaction between government of upper level and grassroots government The first one is to examine how upper level government delivers the policies to the grassroots government and how it monitors, manages, and controls the grassroots government. According to Charles Tilly, the government of upper level is effective in controlling and managing the government of lower level within the governmental system. He also confirms that the government of lower level, as a part of the governance system, consistently follows the rules of the institutions and the state. Studying the grassroots government requires the understanding of how the upper level governments assess, manage and incentivize the lower level governments. The second part is to inspect how grassroots government deals with upper level government’s monitoring and management of its performance. The upper level government’s incentive and examination system usually decide the behavior of the grassroots government towards it. Such behavior reflects efficient management by the upper level government and thus is a criterion to assess the self-capability of the governmental system.

1.3.1.3. Third, township government itself The target includes the organization, structure, objects, and resources at grassroots level. The basic characteristics of grassroots government comprise organizational rules for the township government, characteristics of its structure, target setting, distribution of power and resources. Under the above analytical framework, this research uses the township government as basically the analyzed object, and conducts survey and analysis of following parts of grassroots government, such as organization, structure, finance, power, accountability, incentive,

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social activities, management of public service, its dynamic process towards change and reformation. On the one hand, I will integrate status quo of static description and analysis of dynamic process in order to clearly understand the operational process of government and interaction agencies of each individual body. On the other hand, I will set “people” as the target of inspection, and contrast the difference between the response of “people” to institution, and institutions itself, and this way will help us to understand the difference between the practical operation and expected outcome. China is undergoing political reformation from an “almighty state” to “non-almighty state”. It stands on the historical phase of terminating the almighty state and re-establishing a modern state. It is the government’s historical mission to set up a modern state with a well-operating institution and to reform the grassroots governments who in turn will implement this historical mission. Hence, it is very necessary from an institutional dimension to take care of the historical and realistic influences, combine the experiences and re- introspect the political meaning regarding the change of grassroots government. Under this consideration, our research proposed the problem of “involution of grassroots government”. I will form three dimensions of government’s operational logic to arrive at a specific description, i.e., corporatization, fragmented structure and movement of mechanism. Moreover, I will analyze the locking status of institutional innovations at the grassroots government. For analyzing the status of involution, this research presents the problem of “dissimilation of governmental institution”. The major types of such dissimilation are “inversion of the institutions”, “deficiencies in the institution”, “suspension of institutions”, and “dislocation of institutions”. I think the dissimilation of institution presents dilemma to the grassroots government in the transitional period. For this reason, this book judges the government’s position and its transitional direction, and provides theoretical support to reform the government. In the last part of the theoretical discussion, I will show that grassroots democracy, grassroots autonomy, and legalization as the preferred direction to promote innovatively institutionalize the grassroots government.

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1.3.2. Analytical path Many scholars treat “institutionalization” as the most important characteristic of modern government (Weber, 2004, pp. 297–437; Huntington, 1988, pp. 21–40). Institutionalization can bring behavior predictability for realizing the order of social governance. When Huntington analyzed the modernization road of different states, he defined “institutionalization as the organizational and stable process by organization and procedure”, and pointed out “institutionalization as the foundation of political development” (Huntington, 1998, p. 22). His definition of the organization and procedure can be accepted. That is, people’s actions follow these organizations and procedures. On the practical side, “institutionalization” not only leads to an acceptance of the organizations and related procedures, but also presents a premise problem — which “organization/procedure” to be accepted. It is more important to pay attention to the formation process and mechanism of institutionalizing the organization and the related procedures. Hence, “institutionalization” needs the dual effort of constructing “institutions with norms” and shaping a system to “follow institutional behavior”. From the practical performance of grassroots government, whatever the response of the government is to the society or within its circles, there exist many prominent problems. When township government faces different objectives, its responses to the society and to its government members are inconsistent, even opposed to each other at times. Based on this acknowledgement, I think that the problem of institutional dissimilation exists at the routine operations and inner mechanisms of the grassroots government. The “institutional dissimilation” leads the behavior of government into “irregularity, non- transparency, un-predictability and un-adaptability”, and produces crisis within the grassroots government. This research is systematic and dynamic regarding the position of township government. Township government being the government at the basic level, deals with upper level, manages villages and maintains the inner operation. Township stands among the system of county–township–village and the system itself composes of different

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agencies. Therefore, through analysis of township to deal with the upper level, manage lower level and different operational logic and system of inner governance, it is preferable to understand the problem of institutional dissimilation in the township government. Accordingly, this book discusses administration, finance and social governance.14 When the demands of upper level clearly violate the rule of law, the township government in order to display administrative achievement and satisfy the upper level, chooses the violated rule of law. Therefore, dissimilation of township institution is originally from demand of upper level and an orientation towards displaying administrative achievements, which conflicts with rule of law (see Table 1). When grassroots government faces the village, the institutional dissimilation within grassroots government exposes its inability to either follow the institutional regulations or satisfy the demands of the villages and villagers. On the administrative, financial parts, as well as in the provision of public goods and services, the rule of law is consistent with the demand of villages. Meantime, the institutional dissimilation of township government originates from the orientation of power, and controls only limited number of village cadres instead of the entire villages and villagers. In order to win the support of villagers and to accomplish targets in the provision of public security, education, public health as mandated by the upper level, the township governments is more likely to follow the rule of law, but they end up fabricating the numbers and producing false reports. The institutional dissimilation is original from the orientation of administrative achievements. When the targets of complaints are village cadres, the township government follows the rule of law to conduct mediation for satisfying the demands of villagers. However, if the complaints are about the township level itself, it may lead to damaging the administrative achievements of the township government. Then, its operative logic will transform to not following rule of law, nor satisfy demands of villagers. Township governments usually adopt the intercept way to stop complaints from villagers (see Table 2).

14 Social governance means the management and control of township government on public affairs at village level.

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72 Township Governance and Institutionalization in China ) Continued ( government Behavior of township document, collective report, reception, examination. one vote veto. the appraisal items. corresponds to “seven stations and eight agencies”. position with rank, but no function. Social activities, meeting, Fully secure by the target Fabricating numbers in Top to bottom line Top Setting leadership demand government of higher level. charged by special charged agency, leadership of township. External (county level) Jointly to deal with One vote veto, Quantitative methods. Special funds, project Overstaffed with 15 Role of administrative subordination. direction of upper level. development, target development, target of spiritual civilization construction, and target of party’s construction. posts. Relationship Implement orders under the Institutions correspond with to Follow the Rule of Law.

level of institution and personnel Control of upper Responsibility of economic Target Dealing With the Upper Level: High Level of Adaptability to External Demand (Demand of County/City Level), Rule of law means the formal, statute law, legislation, and regulative documents. Rule of law means the formal, statute law, Administration Establishment Low Level of Performing Work Table 1: Table 15

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Progress of Township Governance Studies 73 government Behavior of township purchase, and tax lending Raise a loan to pay tax. Fiscal idling, tax Raise a loan to pay tax. Raise a loan demand the achievement of official career. township government, assessment linking up with township government. level. Local authorities take full responsibility for their finances. External (county level) ) Debt does not influence Coordinated by county Continued ( Role Table 1: Table loan. conform to budget. Debt Cannot violate to contact a Tax System of tax distribution. Receive revenue from Finance Budget Revenue and expenditure

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74 Township Governance and Institutionalization in China ) Villagers) Continued ( government Behavior of township managed by township. governmental law to manage village cadres. into a figurehead. the directives at the beginning of every year, and assessment at the end of year. level management, and asks cadres to take care of one to several villages. Accounts of villages Following the village self-ruleTurning sets up district- Township demand External (village) financial affairs. chairman of village committee. functions. Self-determination of Villagers directly elect Villagers assess cadres. government set Township Autonomy strengthens Role finance matters. election of village level. villagers. level. Villagers’ self-rule, Autonomy at village to Follow the Rule of Law.

of institution and personnel of village Responsibility Responsibility to Management Management of Lower Level: Low Level Adaptability to External Demand (Demands of Village Level and and Low Level of Performing Work Table 2: Table Administration Establishment Finance and tax Finance Independence in

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Progress of Township Governance Studies 75 government Behavior of township security, universal security, compulsory education, attention to public health. paradox. complaints to upper level. Maintenance of public Adopt measures to solve Suppressing the lodging demand External (village) and quantity of public services. solve conflict. upper level because problems are not reasonable to be solved by lower level. ) Promoting the quality Lodging complaints to Continued ( Role Table 2: Table quality homes. upper level is the right of the peasant. Law, policyLaw, Lodging complaints to Instituting policy to village to upper level Paradox of inner Lodging complaints Social governance Public services Government provides

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From Table 3, we can see that apart from payment of salary that is consistent with rule of law and external demand, the inner system of township does not always follow the rule of law and is unable to respond to external demand, even opposed to rule and external demands. In order to maintain the operations of its government, the township government delays payment of salary to its staff. It is not consistent with rule, nor satisfies the demands of working staff in the township government. At the same time, even with the rule of law being clearly incompatible with external demands, the operational logic of township government reflects strongly to satisfy the demands of independent appointments, promotions based on accountability, and securing huge loans for increasing revenue to accomplish the targets set by upper level. Through inspecting inner parts of township government, it can be said that dissimilation of institutions is separated from maintenance of governmental operation and promotion of working staff. Both these aspects can contribute to the achievement of government objectives.

1.3.3. Research Methods This research is based on case studies and adopts the meso-approach, generally speaking, to the recently conducted political research in rural areas developed on three dimensions, i.e., stressing upon the micro study of experience cases, emphasizing and analyzing the macro topics and a meso study on the base of micro study. The study from the dimension of micro level employs the approach of analyzing cases where the reformation process in the township system has comprised main parts of research since 1980s. The practical processes that would change the reformation of township system and which happen to be the focus of major research at a micro level include: establishing the township regime initially, to restructuring and decentralization, defining the township’s functions, straightening out the relationship between party and government, implementing the direct election of township governors, to reformation of tax and fee, and downsizing the role of institutions at the beginning of this millennium. Topics at a macro level are democratization of China, political transition and

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Progress of Township Governance Studies 77 ) and Continued tiao ( government . Behavior of township kuai halfheartedly moving, vertical units are a dead end relationship. and economic development. party-government. overstaffed, name on but no organization post, post without name name on organization, on payroll but no post, nor name on organization. Inner agencies are Segmentation of Promotion depends on the The core is social stability Monolithic institution of Limited vacancies, staff, agencies) (cadres of other External demand of vertical units. evaluation. and government, downsizing the offices. independent appointment. Decreasing the number Promotion through Merging of partyMerging Personnel of Role agencies and vertical division of labor. public business of assessment and regulation. party and government offices. work. Co-existence of inner Separation between Fixed staff, post, and between different agencies of institution and personnel Relationship Responsibility According to Government: Non-institutional Factors Determine Inner Part Negative Relationship Between the Level of of Township Administration Establishment Table 3: Table Adaptability to External Demand and Performing Works According to Rule. Adaptability to External Demand and Performing Works

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78 Township Governance and Institutionalization in China government Behavior of township secure loan from financial institution, society and individuals. organizations to owe organizations salary of different staffs and time. the account of village to raise revenue. budget, no effective system of budget. Use the loan and manage No clear arrangement of agencies) (cadres of other External demand ) fee does not reduce the financial revenue of township government. and external revenue budget. occupies most part, very few to pubic business. Increasing revenue. Through every way to Pay full salary in time. According to different Reformation of tax and Coexistence of inner Administrative fee Continued ( Role Table 3: Table agreement. enough money to pay on time. and fee, tax contract, regulative management of village finance. of revenue and expenditure. Debt Cannot violate a loan Wages Fixed posts and Tax and feeTax Reformation of tax Finance Budget Instituted the budget

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development of China, regular patterns in the economic development of Chinese market, and change in the structure of the township government are but only the entry points or even a footnote for the scholars. This macro study provides helpful insights in understanding the political metamorphosis of China, but their objectives do not dwell on the township and its operations. In addition to above two dimensions, the dimension of meso-approach attempts to integrate experience study of micro level and theoretical study of macro level. Such a study is limited on the discussion and description of cases. According to the case studies, this approach combines re-introspection and critical aspects of the theory, presents a new understanding with persuasive explanation, and provides a general theoretical explanation compatible with local experiences. This is the basic orientation of this research. Through the empirical study of China township government, this research starts from the micro level of governmental system, sets the organizational structure and daily operation of grassroots government as the path of basic analysis, dissects the characteristics of grassroots governance, discusses the logic relationship between governmental operation and governing crisis, and proposes theoretical explanations regarding the involution and institutionalization of grassroots government. On the selection of the various research cases, there are differences in economic development nationwide. If we only study a single case, the explanation of research findings and conclusion will be weak. Therefore, scholars pay attention from the dimension of region and classification to conduct research in recent years (Tsai, 2003). Through field works of over 20 townships in different regions, this study will observe and describe operational process and inner mechanism of these grassroots governments for developing a logic analysis regarding the problems of township governments. A total of 20 townships is a very limited number, which is unable to reflect the overall conditions of township in China. However, the selection of sample depends upon the differences in development, regions, economic structures, and it is advisable to choose representatives of different types. Compared to the previous numerous case studies, the characteristics of this research sufficiently displays and explains problems from the macro and comprehensive view.

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So far, many dimensions and points in the study of grassroots politics have been mentioned and different perspectives bring different conclusion and judgment of study. This development enriches current studies but also brings many puzzles. That is, different dimensions view the same thing but form different conclusions. This research hopes to surmount this limitation in a certain degree and thus starts the point of township cadres. Through experiences, observations and judgments of these cadres, this research conducts perspectives of multiple dimensions to township, and forms the realization regarding the problems of grassroots government. This research is based on the field work of 20 townships. Both entry points are from realm of specific policies and operations of the government. The former one is to discuss the role and function of grassroots government among the rural issues; the latter part is to explore the problems of practical dilemma of township government and institutional dissimilation. This book tries to merge the policy of analysis and study of academy to announce practical operational process and mechanism of grassroots government. The core of this research is township cadres, and studies changes in the township government. In this research, cadres of township government are the basic “behavior body” of township operation and comprise the relatively direct, clear and comprehensive perspective points. Most of the previous studies regarding cadres of township concentrated on the training, quality, appointment and removal (Liu, 2003, 2004; Ren, Hem 2000; Zhang, 2000; Chen, 2005; Wang and Zeng, 2002; Wang, 1999 and so on). This research aims to provide solutions to various problems instead of treating “cadres of township” as an entry point to observe problems of China government. Moreover, some research fellows conduct surveys and quantity analysis regarding the state of mind of township cadres (Li, 1992; Zhang, 2005), some scholars study the perspectives of peasants to analyze the influence on the political stability of rural areas (Xiao, 2005), and some scholars designed the project of township reformation from the thoughts of township cadres (Wu and Zhu, 2005). These researches or analysis regarding the mindset of township cadres toward the state or detecting their behavior characteristics will enable a positive

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viewpoint to the operation mechanism of township government, to see through behavior logic of township government, and upgrade these problems up to national establishment problems of modern China. My point is that it is a unique and original dimension of research to start from the dimension of township cadres. As the main body of interest, cadres of township government have comprehensive experiences and possess a deep apprehension to the daily operations of township government. Through them when we observe the grassroots government, we can obtain reasonable explanations to various questions. The organic combination between an analysis of the township institution and the behavior of the cadres provides the basis to seek originality of this research.

1.3.4. Data sources The information in this book is from field research during 2004– 2005. The locations of field research were Sichuan. Shanxi, Shandong, Hunan, Jiangsu, Shaanxi, Gansu, Zhejiang, Anhui, Hebei and Ningxi, and about 20 townships of 10 provinces in total (see Table 4). This research is based on the results obtained after carrying out surveys, where participants were interviewed and observed. Targets of this survey are townships, villages and villagers. I designed various main points of inspection to conduct interviews, and targets comprised top party and governmental leadership and other leaders of township government, directors of seven stations and eight agencies at the township level, members of village committee and villagers. I tried to understand the conditions by way of informal discussions and meetings. The average population in each of these townships is 24,496. The township with largest population is 59,708, and the township with smallest population is 7,613. The average number of villages is 12.6 among the 20 townships. The township with largest villages is 49, and the township with smallest villages is only 4. The average arable land of 20 townships is 37,350 mu. The township with largest arable land is 62,000, and the township with smallest arable land is 8,700 mu. The total amount of revenue is RMB102,35,000.

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82 Township Governance and Institutionalization in China of peasants (US dollar) Per capita income revenue Financial (unit: 10,000) land Arable Township data Township cillages Number of adminstrative Total Total in 10 Provinces. Basic Geographic Data of 20 Townships population Table 4: Table YT 19,300 21 26,500 241.5 2,645 LX 17,500 23 15,000 248 1,510 XZ 10,253 8 33,270 13 1,080 YG 23,000 44 35,000 830 2,976 XH 37,223 26 11,161 1,089 6,808 HG 12,877BJP 7 59,708 13,906 49 136 32,700 1,949 188 1,208 ZJB 23,830 13 26,000 170 1,200 WQ 22,800 19 18,000 273 2,100 (code) Name of township Shandong(2)Hunan(3) BY BZ 36,365 11,800 25 12 41,000 8,700 79 57 3,660 1,680 Sichuan (2)Shanxi(2) TP BS 13,300Jiangsu (1)Shaanxi (2) 17,814Gansu(1) 16 LSZhejiang (2) LK 25 12,000 JA YH 32,500 21,500 34,100 300 45,202 7,613 26 102 28 1,668 30 3,8000 1,460 4 32,760 701 30,380 177 17,000 4,700 2,100 264 1,306 6,711 3,047 Anhui(1)Hebei(2) JL FS 39,017 21,000 18 27 40,140 56,000 228 170 2,155 1,058 Ningxia (2) WY 32,000 18 62,000 237 2,915 Province (number of province)

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Figure 2: Illustration of per capita income of peasants in 20 townships, 10 provinces.

The largest revenue of township is RMB5,100,000, and the smallest revenue of township is RMB13,00,000. The average per capita income of peasants at 20 townships in 2002 is 2,366. The largest one is 6,808, and the smallest one is 1,058. National per capita income of peasants in 2004 was RMB2936. The reformation of tax and fee at rural areas has started. Moreover, merger of townships, restructure of institutions, reformation of fiscal system, reformation of compulsory education have begun the process of total reformation. The township government is standing on the crossroad of turbulence and change. Problems and characteristics of this time is the hybrid of historical accumulation and political change, which fully reflects the governing dilemma and complicated environment faced by the township government. This research is conducted based on the analysis and study according to the information of surveys and interviews.

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Organizational and Personnel Structure

Since the mid-1980s, township government reform has been an important aspect of rural reform. The objectives of reform were to bring the governments’ operations in line with social and economic changes, reduce personnel, change governments’ functions, and improve efficiency. Today, after 20 years of reforms, township governments have undergone changes with the passing of time — some of them heartening, because of numerous improvements in such aspects as adapting to the market and operating democratically, and some troubling because of many aberrations in resolving conflicts and in self-regulation. Viewed from outside, the institutions have failed to downsize; viewed from inside, no improvement is visible in their functions, administration is chaotic, and problems abound. The anticipated objectives of the reform have not been attained.

2.1. Organizational Structure 2.1.1. Township leadership For the convenience of analysis, we shall call the body of township leaders at and above the rank of deputy section chief (fu ke ji) the “township leading group”. Since the dismantling of the people’s communes, township institutions have experienced a striking expansion

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and their internal structures have also seen important changes. By comparison, little change has taken place in the townships’ leading groups. Starting with the establishment of the township governments, the basic power structure in the rural areas consisted of township party committees and governments. In the early 1990s, people congress presidiums were universally set up in the townships. These generally consisted of three functionaries — a chairman, a vice-chairman, and a secretary. The people’s congress work institutions were also formal- ized. The chairman’s post in the township people’s congress was assigned in three ways: the position would be concurrently filled by the township party secretary, deputy party secretary, or a full-time appointee. Townships in some localities had a Chinese People’s Political Consultative Conference (CPPCC) liaison group, but no formal institution. Since the mid-1990s, the township leading groups were reduced in size. Previously, a party committee generally had three to four persons in secondary positions (not including the township mayor who doubled as a deputy party secretary), but now had only one or two such persons. Persons in secondary positions in the township government, of whom there were five, six, or even more in the past, now commonly numbered three or four. Also, responsible persons in some departments — such as directors of enterprise committees and directors of joint economic agencies — had been remunerated as township leaders in the past, but now these departments either no longer exist or are of lower rank. In the past, a township might have 20 or even more cadres of section chief rank (ke ji ganbu). During our investigations in Shandong, we found that some townships actually had 40 or more cadres at or above the deputy section chief rank in the mid-1990s. The scope for overstaffing is smaller now; in most cases there are 10 or more persons, and as a rule not more than 20. Generally speaking, the size of a leading group is consistent with the population of the township. The state has unified principles for controlling staff numbers. When making allocations for the number of leaders for each township, the county committees usually do so

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according to the requirements of higher-level organizational departments and staffing departments (bianzhi bu). Since higher-level party committee organizational departments often conduct inspections, cases of township leader appointments in excess of staffing quotas are infrequent. However, it is not difficult for a county party secretary to appoint cadres in excess of staffing quotas, whether at the township level or at the section (ke) or bureau level in the counties, for certain special needs. Such situations include the sudden promotions of large groups of cadres. All townships had people’s congress presidiums, and eight townships had CPPCC liaison groups. Actually, these two institutions have no independent functions, and all functioned as per the instructions of the township party committee. The township people’s congress presidiums conducted no activities other than organizing a single half-day or full-day township congress meeting every year, and the township CPPCC liaison groups did even less. The township people’s congress chairmen and the leaders of the CPPCC liaison groups performed work that was unrelated to either body, as assigned to them by the party.

2.1.2. Departmental structure Because of differences in the timing, intensity, and planning of the township reforms in various localities, the institutional structure of the 20 townships were of three types: Type 1. Nine of the townships continued to use the old structure of stations, bureaus, and offices (zhan, suo, bangongshi). The departmental structures were both elaborate and overstaffed. They had a total of more than 20 departments with administrative and service- providing staffing systems — 26 at most. These departments included party and government offices, financial bureaus, economic administration stations, agricultural offices, family planning offices, outside investment offices, land bureaus, forestry stations, agricultural extension stations, judicial bureaus, statistics stations, water conservancy stations, agricultural machinery stations, cultural and broadcasting stations, civil administration offices, social security bureaus, judicial

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arbitration centers, Youth League committees, Women’s Federation offices, and people’s armed police. These departments exclude those set ups in the townships, but are not subject to direct township administration, such as police stations, industry and commerce bureaus, and tax bureaus. Type 2. Seven townships had implemented large-scale mergers and modifications of departments with similar functions. The total number of departments was usually between 10 and 20, in some cases fewer than 10. Departments with administrative staffing systems were called “offices”, such as comprehensive party and government offices, economic development offices, social affairs offices, and township construction offices. Departments with service-providing staffing systems were called “centers”, “stations”, or “bureaus”, such as agricultural service centers, agricultural economic statistics service stations, family planning service bureaus, cultural and broadcasting service centers, financial bureaus, and animal husbandry stations. Type 3. Four townships conducted mergers that targeted only one of either administrative or service-providing staff. In some townships, only service-providing units were merged to form a number of centers, such as accounting service centers, agricultural service centers, family planning service centers, rural construction service centers, agricultural economy service centers, and cultural and broadcasting service centers, while administrative departments were left untouched. In other places, only the administrative units were merged, to form a number of “offices”. The total number of departments in these townships was between 10 and 20. People still colloquially refer to the various departments of township government as “the seven stations and eight bureaus” (qi zhan ba suo).1 However, after recent institutional reform, the “stations” and “bureaus” are no longer salient features of township government as they are being replaced with “offices” and “centers”. Functional changes are another matter.

1 This nickname echoes the Chinese expression for chaos, “luan qi ba zao”.

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2.1.3. Personnel and staff: A complex situation Provincial-level staffing departments formulate staffing principles for townships, and counties and prefectures follow these when determining the staffing systems, posts, and numbers of jobs in each township. Under normal circumstances, staffing systems are determined before staff positions are created. Township personnel have four separate statuses: administrative staff, service-providing staff, manual workers (gong qin), and off-budget (bianzhi wai) personnel. All township leaders belong to the administrative staffing system, as do the heads of administrative and management “bureaus” and “offices”. The heads of various “stations” or “centers” usually belong to the service- providing staffing system, and chauffeurs and canteen personnel are manual workers. The circumstances of off-budget personnel are different and require separate analysis. Where staffs themselves are concerned, the system is significant to them in two ways. The first relates to their salaries. The salaries of administrative staff are paid entirely by financial departments and the conditions are slightly better. The salaries of service-providing staff are paid entirely from finances, or are partially funded (cha’e bokuan), or are entirely self-financed (zi shou zi zhi). The wages paid by financial departments to service-providing staff are slightly lower than for administrative cadres, while partially funded and self-financed staff may be higher or lower. The second way is related to management authority. All administrative cadres are subject to assignment by the county organization department, whether or not they are in leadership positions. Service-providing staffs, below the rank of deputy section chief, are deployed by personnel departments, while those at the rank of deputy sections chief and above are deployed by the county organization department. Labor departments assign manual workers. The townships enjoy relatively full powers to assign off- budget personnel. A few township leaders try to simplify their work by ignoring the division between administrative and service-providing staff, except when it comes to township leaders. There are frequent changes for those who receive their payments from the finance department and those who only receive a portion of their salaries.

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2.1.3.1. Bewildering staffing arrangements Perusing official documents, one sees that the townships’ institutional layouts and the allocation of personnel are clear and standardized. There are clear stipulations on how many persons work in each department and what their duties are. However, actual operations differ. There are two common situations: (1) a real work post may be concurrent with a staffing-system work post. For example, a person’s assigned position is that of Youth League committee secretary, but actually their true position is that of village party secretary. They may be doing Youth League work for just a few days in any given year. Even deputy township mayors and deputy party secretaries are often entirely engaged in specific tasks; (2) real work posts are completely unrelated to staffing system work posts. If a land bureau has 15 staff, perhaps only four or five actually work there, while the rest are engaged in unrelated work.

2.1.3.2. Complex personnel structure Compared with prefectural governments, township governments are relatively small and simple, but it is quite difficult to get a clear picture of their personnel structure. Examining the personnel structure of a government compound with 100 or 200 people can leave one with an impression of complete chaos. Irregularities in staffing circumstances fall into four categories:

1. Overstaffing (chao bian) is common. Of the townships we investigated, 16 provided information on their staff. Two townships were understaffed, by five and eight respectively, while 14 townships were overstaffed, by a total of 370 (ranging from 12 to 120 staff). One should not assume, however, that understaffed townships are short of labor. The actual situation may be that formal staffing positions are unfilled, while off-budget staffs are present in large numbers. Often one finds staff vacancies existing concurrently with serious overstaffing, the reason being that the off-budget personnel are unable to join the formal staffing system.

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2. Formal staff, those who are not at their posts. This refers to township personnel who are part of the staffing system, but for no legitimate reason they do not come to work. Some townships have up to a hundred personnel, but usually only 20 or 30 of them come to work. The rest of them are in the staffing system, have posts, get salaries, but one cannot find them. The township leaders know these people have no work to do, but do not know what they are doing. Many of them do not absent themselves permanently, but drop in now and then at the township offices. 3. Persons at work posts, those who are not in the formal staffing system. This refers mainly to township personnel who should be dismissed or retired in accordance with higher-level regulations, but who still come to work. Most of them used to be “contract- system cadres”, whose contracts have now expired. In their own words: “We are neither administrative staff nor service-providing staff. We are simple cadres.” Some township party secretaries said: “Shedding staff is much too difficult. Most townships have not carried it out, and the staffing reforms have been realized only on paper.” These persons refuse to retire, and come to work whether or not they have anything to do. They cling grimly to work posts that are already non-existent. 4. Persons neither in the staffing system nor at work posts, but who draw a salary and are “on the books” (zai ce). This group is few in number but obstinately clings to township institutions. All of them are temporary personnel with special connections and support (kao shan).

2.1.4. Township expansion The staffing system framework is intrinsically bloated. Streamlining was the original purpose of reform, however the framework of the staffing system is inflated and the system itself created a surfeit of personnel. There are two aspects to this problem. One is the large number of personnel: fixing a staffing complement of 40 to 50 persons for a township with a population of 10,000 in itself causes a surfeit of personnel. The other is a full set of departments: all

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townships, regardless of size or the paucity of local resources, have at least 10 and often more than 20 departments. There is a strong impetus toward expansion in the townships themselves and very weak constraints on staff numbers, because the townships have their own finances and are able to pay salaries. Personnel can be recruited based on their desire to join, and if the township leadership is willing to take them. Although they will not be in the formal staffing system, they can be issued salaries. The first objective of a large majority of new graduates and demobilized sol- diers is to land a government job. Hence, the competition for government jobs has given rise to fierce interpersonal battles. Persons with actual power, township and county party leaders, and heads of county sections and bureaus, all have become the subjects of public relations campaigns, with ties of blood, friendship, or money serving as the means of access. During these battles, all officials with real power created ways of employing “their” people: if they cannot be placed in county departments, townships will become the target. Of late, all county leaders have put their people in the townships. When leaders leave, “previous edicts do not fade when persons in power go”, as they say, and their successors cannot dismiss the previous appointments. The successors also have people they wish to employ, so place- ments continue and a cycle is formed whereby redundant personnel ceaselessly accumulate. This tendency is propelled by the structure of government as a whole. In principle there is no requirement that the institutional setup should consist of corresponding departments at upper and lower levels, but under the macro system of centralized administrative powers, higher departments control special funding and projects, and a township is subjected to delays if it does not have corresponding departments. These delays often result in failure to obtain special funding and other tangible losses. Higher-level departments find themselves in an advantageous position in terms of evaluations and assessments, since they can subtract points and even give failing marks if corresponding departments do not exist, directly reflecting on the career prospects of township leaders. Thus, townships are obliged to set up all the departments required by higher levels. Even worse, a simple

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slogan can lead to the creation of new institutions. Some regions are bent on “improving the investment environment and creating a new image”, and so “image offices” (xingxiang ban) have appeared in counties and townships. Some “work to improve the fish-and-water relationship between cadres and the masses” and so “fish-and-water offices” (yu shui ban) have opened. Others “bring sentiments along when doing mass work” and thus “bring sentiments offices” (dai gan ban) have emerged. A whole series of bizarre “offices” have appeared at the grassroots, and with these institutions the need has appeared for more personnel, vehicles, and even the building of houses. This new batch of persons is required to grasp the so-called “work” and demonstrate their existence and authority through inspections, evaluations, and assessments. For coping up, the lowest grassroots levels must furnish more personnel and institutions. The need for social stability has trumped institutional streamlining. One situation that governments at all levels do not wish to see is an additional contingent of township worker petitioners on top of laid-off and unemployed workers and peasants coming to present complaints and grievances. Such situations have already occurred. The “township telephone operator incident” that we encountered is a good example. The universalization of modern telephones in rural areas has resulted in the redundancy of telephone operators dating from the time of manually operated telephones. During institutional reform, telephone operators naturally became one of the targets for streamlining. Provincial authorities sent out special documents explicitly demanding the jobs of township telephone operators to be cut, and all regions started to implement this demand. However, endless streams of petitioning telephone operators soon appeared at the gates of provincial governments. So documents canceling the previous decision were sent out and telephone operators went back to work. Since there were no telephones to operate, they switched over to chores such as filling thermos flasks and cleaning. Social stability now takes precedence over everything. In the townships, it makes little difference if there are one or two more or fewer persons receiving salaries and if these salaries are one month or three months in arrears. Such things do not affect the prospects of individual

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leaders. However, the matter becomes grave if streamlining causes instability. In such circumstances, few leaders are willing to make trouble for their superiors or themselves for the sake of “streamlining”. Some township party secretaries put it bluntly: “Cutting salaries beats cutting people — that is my strategy for reform. If I reduce 100 staff members to 80, even assuming that no one gets killed, I will never get any peace. But when 100 workers share the salaries of 80, there is mutual understanding and people live in harmony.”

2.1.4.1. Conclusion If one were to briefly describe the circumstances in which township governments find themselves today, one could describe their appearance as “extremely bloated” and their internal structure as “extremely complex”. The number of township government personnel has more than doubled since the early 1990s. Along with increases in personnel, internal structures and functions have not only failed to come close to the anticipated objectives of the reform, but have become even more chaotic. The township institutions’ process of reform over the past 20 years has been one of constant expansion, and streamlining has had no real effect. The encouraging news is that this momen- tum has largely been contained in the past few years, and tight revenue flows have already made it tough to continue old practices. Expansion of township personnel was the logical result of expansion in county-level institutions. We never encountered situations, where township institutions expanded, while county-level institutions remained lean. As the problem of overstaffing grew serious at county-level institutions it turned downward and spread to the townships. In geographical terms, the closer a township was to the county seat, the greater the explosion in personnel. This was observed not only in government, but also in schools and hospitals. Schools close to county seats were overstaffed with qualified teachers, while those in border and remote townships were desperately short and had to hire relief teachers. Township institutions are in a state of flux. Despite round after round of reforms, functions and duties are still far from being

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properly defined and the chaotic state of staffing has worsened. If we also consider the potential impact of tax reform on township institutions and the challenges posed to government actions by the peasants’ increased awareness, one could say township operations have become mired in a “swamp”, where the future is uncertain and township cadres feel confused and apprehensive. We believe that any attempts to resolve the townships’ problems within the present institutional framework offer no way out. Hence, we must seriously consider new ideas and lines of thinking. During the survey, old township and county leaders often remi- nisced about the early 1980s, when there were fewer township government personnel (a township government usually had 10 or so staff and the larger ones, 20 or 30). Everyone had work to do, there were no worries about paying salaries, and everyone felt satisfied. In those days, the townships conducted fewer receptions for higher levels, inspections were rare, and visiting officials were happy to eat their meals in the canteen. Today, any township government may have a hundred people or even more. In some, just one station or bureau has 40 or 50 people, and as far as work goes, only township leaders and the heads of stations, bureaus, and offices have regular work. Much of this “work” consists of inspections and attainment of objectives set by the higher-ups that are virtually meaningless.

2.2. Institutional Reforms Three aspects of township reform deserve attention: efficiency, functional changes, and the degree of streamlining. These three aspects are related but not identical. Efficiency is not necessarily improved after streamlining, and higher efficiency may not bring about functional changes. This article focuses on institutional streamlining. Since the 1980s, a series of streamlining exercises have been declared successful, but in fact government institutions have constantly expanded precisely during such reforms. The nationwide ratio of fiscally supported personnel to the overall population stands today at 1:28. In Hebei province from 1995 to 2003 the number of fiscally supported persons increased from

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1.57 to 2.19 million, or by 520,000 in eight years, equivalent to the population of a medium-sized county. During the Cultural Revolution, the ratio of fiscally supported persons in this province was 1:62; in 1995 it was 1:42, and in 2003 it was 1:30. The increased personnel are concentrated mainly at the county and township levels, and counties and townships account for 1.67 million of the 2.19 million fiscally supported persons in the province as a whole. In Anhui province at the end of 1991, there were only 1.21 million fiscally supported persons. By the end of 2003, the number had reached 1.673 million or 463,000 more than in 1991. Of these personnel, 924,000 were at the county level, or an average of 15,000 in each county; and 260,000 were at the township level, or an average of 150 fiscally supported persons per township. The number of fiscally supported persons in counties and townships throughout the province accounted for 70% of such personnel in the province as a whole. The actual situation at the grassroots is much more serious than the situation shown in formal documentation. One might well say that the sharp increase in fiscally supported personnel makes a mockery of years of institutional reform. One cadre told us that he made plans to purchase office furniture whenever he heard a streamlining was in the offing, because in his experience there were bound to be personnel increases after institutional streamlining.

2.2.1. Institutional streamlining The 20 townships surveyed and interviewed had all conducted institutional reform at one time or another. The principal leaders of 15 townships maintained that the reform had achieved poor results or none at all. Personnel had not decreased, fiscal spending had not decreased, and work efficiency had not improved. Leaders of five of the townships stated that streamlining had been somewhat effective. But none of the township leaders believed that today’s township institutions were in an ideal condition. There are two aspects to streamlining: institutional streamlining and personnel streamlining. The many years of constant streamlining have led to fewer departments in the institutional aspect, but constant

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increases in the number of personnel. Where personnel are concerned, the results of streamlining are twofold: first, cuts in the number of temporarily engaged persons, many of whom were originally village cadres; and, second, reductions in the number of elderly personnel, by having them temporarily leave their jobs or retire early. In general, streamlining has had some effect, but the overstaffing situation remains unchanged and the original problems persist. A township party secretary in Shanxi province said: “The current institutional reform is a vicious circle — all shouting and no solutions. Streamlining is absolutely impossible. In 1993, action was taken to fix the number of cadres in line with the township’s population and reduce the number of personnel. At the time the township had 80 or more cadres, and 50 or more were to be retained after the reform. Because the forestry and fruit station, the judicial department, and the agritechnical station still have some fee-charging projects and business projects, [some cadres] were reassigned to these units. Later, however, all complained that they were not making any money, so after two years matters reverted to their original state and the township government went back to issuing their salaries. The 1998 institutional reform did indeed produce some results. Temporary workers were cleared out. The township kept only 10 of them and dismissed more than 30. It was said that surplus personnel would be reassigned after the temporary workers were cleared out, but after that was done, nothing happened. I feel that the streamlining done during the institutional reforms has only resulted in more expansion. The effects are not great.” For the sake of institutional streamlining, some townships have implemented a post-rotation (lun gang) system. About 10 cadres at a township in a well-developed eastern province were to undergo post rotation. They were offered the possibility of looking for another job. For one year their wages and benefits would remain unchanged. At the end of this year they could either resign with their regular retirement benefits or return to their original posts. However, no one volunteered for rotation and the leadership was unable to choose cadres for rotation. So the entire complement of township cadres proceeded to vote by secret ballot, and 10 persons were elected. But

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more than half of them subsequently stated they wished to continue showing up in the office even though they could receive their wages without doing so. After two years had elapsed, only one person among the post-rotated personnel chose not to come back again. In some cases, reforms occur only on paper. They consist of “word games” carried out only on materials reported back to the higher levels. A township party secretary in Hunan province said: Our streamlining has had no effect at all. The same people are still there, but their labels have changed to cope with inspections by the higher-ups. I feel that institutional reforms are useless if they do not involve cuts in fiscally supported personnel. When we conducted an institutional reform in July 2002, the higher-ups requested that the grassroots submit a plan, which would then be examined and approved. No one knew what to do. In any case, the staffing complement would be checked and decided by the higher-ups, and the methods were also decreed by them. So we went to the county to copy plans. If they said we should have so many staff members, then we had so many staff members. If they required last-in-line eliminations (mo wei taotai), then we said that we had done them. Our township was given only 16 staff positions. We originally had 21, so we changed one leadership position into that of departmental director (zhuren keyuan), internally retired (nei tui) four, and combined the governmental office, the Letters and Petitions office, and the Youth League Committee into a single office. Service departments (shiye danwei) were also combined according to requests from above. Culture and broadcasting were combined, as were agricultural technology and agricultural machinery. In reality, there were no reductions in the number of persons receiving township salaries. Fiscal expenditure did not come down, and work efficiency did not go up. There also emerged a number of persons who were in charge of nothing at all. Their former titles had been annulled, and they did not know what they should do or where they should go to work. When the higher- ups came on inspections they only looked at our documents and never checked the actual number of persons. At a township in Anhui province we were told: After institutional reform in our township, 19 cadres no longer figured in the

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nomenclature staffing system (zai bian). In fact, however, only one of these 19 persons was dismissed — a temporary worker acting as a driver. Five were retired according to county regulations. Three leading cadres were reassigned to the posts of director and deputy directors. As such they received their original salaries but did not figure in the staffing system quota. Five persons were reassigned as researchers. They did not come to work, were issued their original salaries, and would be retired when they reached the right age. The actual situation today is that the staffing system has been fixed, and the cadres have given their post-assignment campaign speeches for everyone to comment on and appraise. But those who have been assigned to certain posts have not really taken up these posts, because being assigned to a post does not mean they are able to do the job. Sometimes reductions in personnel take place without fiscal expenditure going down. Reassigned personnel continue to collect their salaries and fiscal burdens are the same as before. Dismissed temporary workers must be given salary arrears accumulated over the years as well as a certain amount of compensation. Old-age insurance must be paid for persons who leave their posts or for retirees, and these result in sudden rises in fiscal expenditure. One township’s fiscal payments for this single item were more than RMB200,000. A township cadre in Zhejiang province said: “The township institutional reform was conducted according to the provincial government’s reform. Personnel designated for administrative staff positions applied and took exams and were assigned to positions according to their test scores. The rest were reassigned. However, 56 reassigned cadres lack posts, but still receive their original salaries. The fiscal burden remains the same as it was before.”

2.2.2. Township mergers Recently, China has conducted fairly large-scale township mergers. The total number of townships has fallen from 50,000 in the early 1990s to fewer than 38,000 today. This reform carries the hopes of many people, but at present its effect is limited mainly to adjustments in administrative divisions.

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Of the 20 townships we surveyed, 12 had been involved in township mergers. Among these, in nine townships the leaders maintained that the mergers had no obvious effect on streamlining personnel or raising efficiency, no effect on township work, and little effect on rural grassroots work. Two of the townships said there had been fairly evident effects on the focusing of finances, but little effect on personnel streamlining. One township secretary voiced sharp criticism, because public assets had been sold or secretly divided up during the dissolutions and mergers, seriously undermining the township government’s finances. There have been some advantages to the mergers. First, the townships’ comprehensive financial strength grew, which was beneficial for the development of regional economies. Financial and manpower resources were focused, becoming more useful for developing large industries and deploying resources. In some cases management costs have been reduced. A township party secretary in Shanxi province said: “Previously, we were unable to build a school, but now that two townships have been merged, we have the financial strength to do so. Our greater financial strength allows us to complete two or three big projects in a single year, such as organizing large-scale ditch digging and earthwork. We can also compete for larger construction projects.” Second, the number of leading cadres has decreased. Though the number of work personnel did not drop noticeably, the number of leadership positions did. For example, the number of party secretaries, township heads, and other secondary leaders registered a marked decline when the original leadership groups of two townships were combined. This reduced administrative costs. Of course, there was no marked reduction in the total number of fiscally supported personnel, because those township leaders who no longer had positions with actual powers and responsibilities continued to be government personnel and were remunerated according to their original wage scales. But there also have been disadvantages. To begin, neither personnel numbers nor fiscal burdens have declined. The deputy party secretary of a township in Hunan province told us: “Six of our original townships were merged as three townships. There was no reduction

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in the number of personnel, the institutions did not change, and work is less efficient than in the smaller townships. Then, only 20 or 30 cadres worked in each township, the distances between the townships and villages were smaller, inspections and guidance were easier, and work was carried out much faster.” Second, new inconveniences have emerged because of the enlarged scopes of administration. In some localities, new administrative institutions have been inserted between townships and villages, such as management districts or management areas, and this new level has brought about increases in working personnel. Where localities in hilly or mountainous areas or those with inconvenient transportation are concerned, the mergers of townships have also caused difficulties for the handling of affairs by ordinary people. In another township in Hunan province, we were told: This township took shape as a result of the merger of three previous townships, and at that time a few off-budget (wu bian) cadres were cut. But later some new staff was brought in through various connections. And so, the number of persons increased. Because of increases in personnel and institutions, mutual wrangling and buck-passing has increased. And peasants find handling affairs inconvenient because the area of jurisdiction is so large. The distance remote villages and teams must travel to and from the townships is 10 or more kilometers, and the peasants strongly object to this. Also, ordinary cadres show very little enthusiasm for their work because of salary arrears, which makes it difficult to complete any tasks. I feel it would have been better not to merge townships in the first place.

2.2.3. Suggestions for Reforms With regard to solutions for the township government problem, among the principal leaders of the 20 townships, 10 maintained that the townships could be converted into county-level agencies; three maintained that the county governments could be dismantled, leaving only a few window-service institutions; six maintained that the township governments must be reformed; and one maintained that his township did not need streamlining.

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The principal leaders of these townships put forward the following three kinds of proposals for reforms.

2.2.3.1. Convert the township governments into county-level agencies The township leaders who advanced this proposal believed that the most important function of the present township government had been the collection of taxes. This function was greatly weakened after the tax reform, and there is little for the township government to do now. So a thoroughgoing reform is needed. The party secretary of a township in Gansu province said: If matters are handled according to the law, there is little need for the township government to act as a go-between. Housing construction is now managed by the bureaus of land and resources, contradictions and conflicts are handled by the public security, procuratorial, and people’s courts systems, and taxation is conducted by tax departments. Actually, there is practically nothing left in the township governments other than an official seal of the party and an official seal of the township, which are used merely for the appointment of village cadres, for validating letters of introduction for ordinary people, and for providing certifications. The party secretary of a township in Hunan province said: “Township governments could be dismantled and agencies set up. Only a few window-service institutions need to be retained. Ordinary people who have disputes would go to judicial offices, those with child-bearing issues would address family planning offices, and those with difficulties in their everyday lives would go to civil administration departments. Such matters could be properly handled as long as the people in these departments do their work responsibly. Today, the township governments just cannot cope with all the inspections from above. The township governments are like firefighters, doing something here and then something there with no definite duties, and all cadres are required to work together on all matters. Dismantling the township governments will have no great effect on ordinary people. The biggest problem is where to put the township cadres.”

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Some township leaders maintained that the biggest problem in dismantling the township governments was the placing of extraneous personnel and the handling of township debts. They maintained that such problems could not be resolved by relying on the efforts of the townships. With regard to the disposal of extraneous personnel, in particular, some township secretaries proposed the following: each township would only need to keep four to eight working personnel to maintain operations, and the central government should allocate a special fund to pay for a one-time length-of-service-based buyout for township personnel, who would then look for other employment by themselves. This task resembles the reform of state-owned enterprises.

2.2.3.2. Create conditions for implementing township self-government Among the three township leaders who advocated dismantling the township governments, two suggested township self-government. They did not believe that one could go straight away to township self- government; a period of time would be needed to create conditions for doing so. The party secretary of a township in Jiangsu province said: “Township self-government should be the direction for future development, but the township governments cannot be dismantled right now. From the nationwide point of view, to have some 2,000 counties administer more than 800 million peasants is inconceivable. There must be a level of government at the townships. Today, it is the prefecture-level governments that most deserve to be dismantled. The system of prefectures governing counties must be dismantled, and the counties should be directly administered by the provinces.” The party secretary of a township in Shandong province said: “I maintain that the townships could conduct direct elections (zhi xuan), but the conditions are not quite ready yet. If the township governments are dismantled, no one will be there to take care of many matters and the peasants will become a pile of loose sand. The counties cannot deal with hundreds of thousands of people. Army

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recruitments and family planning would be impossible to carry out. So government is still needed.” The current survey showed that prefectural governments were generally regarded as useless. Leaders of county-level governments especially expressed this viewpoint. They maintained that the work of prefectures consisted of holding meetings, distributing documents, and then conducting inspections and assessments, none of which had any real effect on the development of the counties and townships. Much of the work done at the prefecture level was only for show, and even obstructed development at the grassroots.

2.2.3.3. Continue to streamline Adherents of this opinion did not believe that township governments should be converted into agencies of county-level governments, nor did they believe that townships could gradually exercise self-government. Among these six township government leaders, five advocated continuing to reform the township institutions, with the key being to make genuine cuts in personnel. One township leader maintained that the results of previous streamlining were acceptable, that now he had no extraneous personnel. The argument for continued streamlining was that the township governments only needed to keep a few important departments, such as civil administration, judicial affairs, local police stations, family planning offices, and finance offices. The difficulty is where to send the redundant personnel in the process of streamlining. Most of the township leaders noted that when streamlining institutions of the central government, channels had been opened for reassigning personnel. They could go abroad for advanced studies, be transferred to lower levels, or go to enterprises and public institutions. These options did not exist in the townships. One could not send former cadres down into the villages. All township personnel have complex social backgrounds, and most are quite aggressive about keeping their “rice bowls”. Solutions suggested by township party secretaries include: (1) retaining salaries for three years, sending retrenched cadres to schools for advanced training, and

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then forcing them to compete on the employment market; (2) a one- time length-of-service-based buyout; (3) encouraging cadres to resign and go into business, with conditions to be specifically negotiated; and (4) promoting early departures from work posts to go into retirement, with appropriate increases in grade-based remunerations prior to retirement. Only one township head — from Ningxia province — maintained that his county did not require streamlining. He said: “I think that the eastern townships are most in need of streamlining. Last year, I worked temporarily in Fujian for a year. One of the townships there had 30,000 people and more than 200 cadres. Our township has 10,000 people and only some 40 cadres. With the higher-ups assigning so many tasks, that is not too many.”

2.2.3.4. Conclusion Although the township reforms have had a few successes, these are far from satisfactory when viewed from the need to adapt to the economy’s marketization process. One township party secretary we interviewed spoke quite passionately: “Today’s reform of the township institutions is a fake, because there has been no change in the functions of township governments. Today’s governments take on everything indiscriminately. They try to manage many matters that should be managed by the market. Economic development is a matter for markets not government, but the higher-ups keep pressing you to put this on your agenda. How can governments claim to have conducted reforms when their personnel and functions are still the same? All of it is merely for show!” We feel that the current township reform is like a person who has walked into a swamp. He can hardly move forward or backward, but is not yet in danger of sinking down. Reform has been talked about for many years, and there has always been some action, but basic operating mechanisms have not changed and anticipated objectives have not been reached. Most of the townships are beset with difficulties, and some even comment wryly that they are “on their last legs”, but they have not entirely collapsed and somehow managed to keep

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going. What will happen next? The future is unclear. The problems will not blow away with the wind, and change will come sooner or later, but may be involuntary. One township leader said: “Perhaps our generation of township cadres will be sacrificed for the success of township reform. This is like the reform of the state-owned enterprises, for which many industrial workers made sacrifices. Is that not so?” Township reform faces hard choices.

2.3. Shaping Government Forms 2.3.1. Township government features To sum up, the external organizational type of township government is huge, and its internal structure is complex. Generally speaking, the personnel scale of township government before and after 2004 is double than the early 1990s. That is, if the staff number of township approximates 50–60, the current staff number of township government is over 100. Accompanied with increasing number of working staff, the internal structure and function of township government is not only close to the expected target, but also has fallen into chaos and incongruence. In pasts two decades, the basic process of township reformation is considered as a process of constant expansion, and the situation of downsizing and high efficiency has never appeared. However, this process of expansion has been curbed after the new millennium because the constraint of finance is hard to maintain the condition of previous days. Some senior leaders of township and county level who were interviewed by the author recalled the days of early and mid 1980s. The number of township staff was so few. In those days, the general townships comprised 10 to 20 staff, and townships had in large 20 to 30 people. Each person had his own work to do, people did not worry about the payment, and everyone felt so comfortable. Townships had not assigned many receiving work, works of examination is not as many as right now. The higher level of officers who came to exam our works ate at the dining room. The current situation is totally different that we are unable to handle. The current township office is often staffed with hundreds of

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personnel even more. Works are focused on the leaders of township and managers of stations and offices, and these works are included in the works of meaningless examination. The chaotic situation of personnel at the institutions of township reflects institutional deficiencies of organizational construction at basic level of government. That is, more reformations, more chaos and expansion of township personnel. Although it seems the reformation of institution characterized with direction and principle, these principles and directions are so empty and weak, and it is hard to internalize with the practical process of organizational construction and to organically integrated with the social and economic activities of village. The structure of personnel and offices is core measurement of governmentally institutional reformation, and upper level controls its subordinated governments and departments through this way. The directors of each structure committee at different levels are assumed by the governmental leader, and change of formal regulations regarding to personnel structure are rigid. However, once we deeply investigate the controlling process of structure, we will find the fatal problems. First of all, the principle of organizational structure at county and township level is based on the population within its administration. The problem is the large difference between social and economic activities and administration at counties and township with similar scale of population. For example, the population of a rich township at Zhujiang Delta is similar to a poor township at middle area of Henan province, but things managed by the local government are clearly different. Secondly, the working population from other areas is outnumbered than native residents in some places. Under this is condition, the principle of organization which is based on the population not authentically adapted to the demand of social lives. Secondly, the organization structure is directly controlled by the governmental leaders, and this principle looks so strict. Sometimes, this principle can be so flexible. That is, the major change of structure is controlled by the leaders of party and governmental departments, and decision-making is made by the individual leadership. The basic reason is that governments of basic level with same condition have different size of organization and staff of payroll is decided by the

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individual leaders of party and governmental departments. It is precisely to say that the work of structure does not have any rule of law to follow. This is why a slogan from upper level has pushed the appearance of new institution of lower level. Those departments, which increase working staff or upgrade level, heavily reply upon the attitude of leadership. That is, the level of structure and institutionalization at the basic level government is still low.

2.3.2. Evolution path Although the intermittent reformation of township has a certain effect, these effects are far behind the initiation of governmental system and evolution of economic marketization. The interviewer who is a party secretary of township expressed his dissatisfactory of reformation. “The current reformation of township is fake because the function of township does not have any change. The current government charges everything that some of them are managed by the market. The economic development is operated by the market but the mandate of upper level demands the lower level to submit the project. What are things managed by government? We need to re-position. Is it reformation without any change of staff size and function? All of them are only paper work.”2 The institution of township is still under the situation of turmoil. The promotion of reformation has undergone one round to another, but the function and responsibility has never achieved the expected goals. Contrary to this, the chaotic condition of inner structures and position framework has deepened. If we consider the impact of fiscal reformation to operation of township government and challenge of peasants’ awareness to behaviors of township government, the future of township government is not clear, and its cadres are under the helpless fear and confusion. The unsuccessful reformation of township institution attributes to the background of governmental system. Under the current framework, the oversize of staff number at township is considered to be because of the logic consequence of oversize

2 See the information of interview: 2–17.

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of institutions at county level. From the survey, we can infer that the expansion has originally occurred at the county level. When the serious expansion of personnel occurs in county level, its consequence is spilled over to the township level. When it comes to the characteristics of region, townships are more close to county, expansion of staff is more serious. It is not only reflected on the governmental institution, but also occurs in the units of education and public health. Let us take the example of schools, the teachers of schools close to county are overstaffed on one hand. On the other hand, the schools of remote areas are short of teachers and they need to hire substitute teachers to teach. This sort of a thing does not work to solve the problems of township heavily that rely on the current ways. Therefore, we need to seriously consider and explore the new ideas and thoughts regarding the township institution. The awareness of investigators regarding the reformation of township can be considered as a person walking into a swamp that make him fall into dilemma but has no immediate danger to sink. The reformation that has been discussed for many years repeatedly does not change the basic operation of institution, nor achieves the expected targets. Many township governments with a lot of difficulties are self-deprecating themselves to be at one’s last gasp, but these township government do not collapse completely and they have reluctantly maintained themselves. They do not have any vision of future but understand the emergence of tremendous reformation sooner or later. The emerging reformation is realized by either active way or passive way. “Perhaps the success of township reformation would like to sacrifice the township cadres of our generation such as the enterprises owned by the state.” The shadow of state-owned enterprises has loomed large from the above sentence, especially observed the operative crises of township governments. The responsibility system of township government is not responsibility system of institution, and its boundary could be expansion and extension indefinitely. The management of upper level to the government of basic level mainly reflects to the formally objective management, especially the implementation of objective responsibility. As the result, the responsibility of township has expanded indefinitely. That

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is, thousands of threads concentrate on one needle of lower level. The efficiency and capability problem of the entire governmental system finally attributes to the grassroots government. From this perspective, the problem of efficiency and capability at grassroots governments is not only from the grassroots governments themselves, but also comes from the entirely governmental system. However, it is not fair to attribute the problem of efficiency and capability at grassroots governments to malpractices of governmental system. The institution, department, and personnel of grassroots government reflect the characteristic of stronger autonomy. The appearance of autonomy is provided by the space and flexibility of institutions. The institution of financial management, which relates to the management of personnel, is institution of financial management. The flexibility of financially resourceful management control mainly embodies on two levels. On one hand, the “people” and “money” do not have any direct relationship, but share the limited resource through the way of rotation. On the other hand, the revenue and expenditure have flexibility. In addition to the fixed revenue, grassroots governments hold some flexible “management revenue”. That is, the benefits come from the running public property. The public property is managed by the government, but the beneficiary is to working staff of grassroots government instead of shared by the society. Grassroots governments face a wide range of “soft constraint”; therefore, their performance is not satisfied on the aspect of institutionalization.

2.3.3. Organizational foundation The organizational configuration of grassroots government is the problem of structure as per the formal view. From the view of internal institution, it is the problem of political democracy. Democracy must be the cornerstone of organization structure at grassroots governments. Or the grassroots governments must be built up by the cornerstone of democracy. Under the general condition, or national level, there is no directly closed relationship between political democracy and particularly

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organizational configuration of government. Because the democracy of national level is completed by the way of the representative system, political procedure is not possible to directly touch the complex and huge institutions of government. Under this condition, the democratic process is mainly decides on the change of governmental leaders instead of directly deciding the specific departments of government and setting up of position. The grassroots is different because the democracy has directly basic function to governmental configuration at the basic level. Government of grassroots is conditional and directly managed by the grassroots people, and it also required by the direct management. Within the range of township, the content of scale of public services and managed activities are usually direct form the demand of people. That is, the people may direct participation and implementation. Therefore, people directly decide the corresponding establishment of governmental institution and arrangement of personnel. This research proposes that democracy is organizational cornerstone of grassroots government. The local politics of China does not have any political tradition. Hence, it is both problems of academic study and political implementation to view whether democracy takes a root at grassroots society of China or not. We need to sufficiently review the literature of grassroots democracy, especially the direct meaning of grassroots democracy development to the innovation of grassroots government. These studies have preliminarily appeared in the meaning of democracy and path of development in China. First of all, question of these studies is focused on the election of village as well as the level of township. The first part is: Where is the dynamic mechanism of grassroots election? Specifically, what is the relationship between the social and economic development and village election? The conclusions of these studies, which are based on the field study, are quite different. One finding is that the successful election is easily concentrated on the villages with high level of collective economy (Kevin O’Brien, Baogang He); another finding is that village election easier to establish and develop on those poor villages. The findings of Oi is the actual power of villages with high level of economic development controlled by the hands of party secretary,

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and he/she may employ the current power and resource to manipulate the election of village committee to reduce the political risk (Oi, 1996). The second part is the political effect of grassroots elections. That is, what is the consequence of village election? At first, what is the influence of election to the power of party branch? All of the findings of Jean C. Oi, Scott Rozelle, and Kevin J. O’Brien are in congru- ence that the influence of party branch is far above on the village committee and the village committee is hard to have the power of final decision-making (O’Brien, 2001). Baogang He finds the little influence of villagers’ election on the leading position of party branch, but party branch has turned its absolutely dominating position into the relatively dominate position. Some scholars argued that the problems of long-term exposure of party’s organizational establishment at grassroots level were concentrated and reflected on direct, open and competitive elections of villages instead of the election of villagers undermining political influence of party branch (Thomas P. Bernstein). After the 21st century, scholars have paid more attention to the elections of villagers challenging the traditional authority of party branch at village level. The problem faced by the party branch has actively abandoned the politically leading position if it evades the election. That is, election of villagers has exposed the legitimacy problem of authority regarding the party branch. The problem of political legitimacy, whether could be solved by the election of villagers or, is heavily replied on how the ruling party proceeds the adjustment of institutionalization. The second one is whether the election makes the cadres to pay more respect to villagers and maintains the interests of villagers or not. The finding of Li Lianjiang is the free and fair election helpful to strengthen the active contact between villagers and elected cadres and villagers, and villagers are more willing to unite with those elected cadres to resist the unpopular policies. As the result, cadres who intend to reelect need to maintain the interests of villagers. Therefore, election of villagers promotes the authority position of village committee in villagers’ mind. Manion M. called this contact as the electoral connection, and pointed out the election of rural China as a revolution which theoretically reversed Leninism regarding the relationship between leaders and mass, and practically changed the

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relationship between leaders and villagers at rural area. The third part is whether the election of villagers wakes the consciousness of civil rights or not. Li Lianjiang found that the free and fair election motivated the consciousness of civil rights among peasants, and peasants do not cast their votes to those cadres who have distorted the central policies, and peasants persuades their villagers to recall those cases who are irresponsible. That is, the election of villagers has increased the political efficacy of villagers, and peasants has started to treat the political participation as rights itself and taken action to defend this right. The view of Tianjian Shi is that voters with more internal efficacy and democratic conception are more tended to express their ideas through political participation and behavior such as vote. Voters who value corruption as a more important factor are willing to vote, and they hope to punish those corruptive cadres through vote, and vice versa. The other scholars employed the survey date of Beijing in 1995 to verify these hypotheses, but the conclusion is totally reversed. That is, the election was controlled by the government, and voters with higher level of political efficacy and democratic conception are more tended to absent as a protest to the manipulated elections. My personal opinion is that both findings are congruent, and the basic condition is whether the election is free and fair or not. The fourth part is what is the influence of election to the regime at the basic level (township and village)? Some scholars argue that the purpose of villagers’ self-rule intuition advocated by China government is to solve the political crises such as organizational paralyze, deterioration of public security, and tension between cadres and mass which occurred after the implementation of household responsibility system. Moreover, the purpose of villagers’ self-rule is to exchange the obedience of peasants to state policies through empowering a certain democratic rights to peasants (O’Brien). Nevertheless, when we study the relationship between township level and village organization, the implementation of villagers’ self-rule seems not to achieve the expected democracy. The democratic elections are hard to attract peasant who live in different areas of villages to the voting booth, and the problems such as grassroots corruption and tension between cadres and mass does not solve completely. The relationship between

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township government and villages is still in swing. Whether rural democracy, which occurs on the institutional periphery, will extend to the institutional core or not has become a study topic. The above studies with different approaches and findings have answered a question: grassroots democracy in China is growth right now, and this growth is from the social and economic change, and brought about the new changes of economy and society. When we observe and study problems of grassroots in China, we cannot ignore the fact of democratic growth. It is worthy to note the democratic reformation of some areas that has developed from villages to townships. For example, the Buyun town located in the central district of Suini city in Sichuan province has led the first direct election of township government after 1949 that produced the tremendous influence. Moreover, the Xindu district of Chengdu and Honghe autonomous district of Yunnan adopted a set of initiative policies to expand the civil participation in election of major leaders (secretary of party branch and governor of township) and to promote competitiveness of selection. These implementations called by the academic field are direct elections of township. As the follow-up and development of village committee election, the direct election of township has became the target of study by scholars. Peng Zhen who was the former Chairman of National People’s Congress, has spoken: “managing affairs of a village will gradually manage affairs of township; managing affairs of township will gradually manage affairs of a county. It is a gradual training process to increase the ability to participate politics”. According to the findings of Li Lianjiang, election of villagers has pushed those local leaders with initiative who are no longer satisfied to play a role of local bureaucrat, and they are glad to play a local politician for promoting political reformation. Although the process of reformation that promotes the direct election of township gover- nor has a certain amount of political risk, they believed that the history sided with them together (Li, 2002). Li Lianjiang thought that the direct election of township is the starting point of gradual expansion of grassroots democracy, and the direct election of township will open the door of electoral reformation. Manion (2000) proposed

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the different opinion to the direct election of township. According to her arguments, the direct election of township is a mechanism to merge the option of voters and committee of party instead of the result of political democratization. She pointed out the direct election of Buyun that voters and representatives of township people’s congress only select governor of township level from a slate of candidates that is refereed by the committee of party branch previously. Nevertheless, this mechanism is not obliterated selective importance of voters and representatives of township people’s congress to leaders of township. Contrary to this, this policy provides the legitimacy to the leaders of party branch. These practical studies of China demonstrate the extreme importance of elections to establish the governance. Studies of democracy at basic level are very complex. As words of Elizabeth J. Perry (2007), “regarding the description of grassroots democracy is mixed. On the one hand, the central government introducing reformation hopes to increase the performance and responsibility. On the other hand, the pressure of local government has increased. These pressures are from both upper level (responsibility system, and pressure of financial reformation), and local-government itself (election, protest media report and non-governmental organization). These developments make village cadres especially those without any resource and support of taxation revenue stand at a hardship situation. No evidence has indicated that there are considerations for complete reforms of the political system (such as multi-party competition, independence of justice, and media freedom) to solve the dilemma. They prefer cautiously to gradual explore and discuss those reformations which push the economic growth but do not cause any universal turbulence” (Perry and Goldman, 2007, pp. 16–17). The observation of western scholars proposed grand questions of governmental reformation and democratic reformation. The importance of democratization to governmental configuration is based on the democratic process to form the governmental configuration. That is, how large sized governments are required by the grassroots, how to divide these departments of government,

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how to draw and design the power and responsibility of these departments. All of these are required to be solved by the political process. In theory, the government is originated from the need of local people. And only local people know what kind of government they need. Under the democratic system, this process is decided by the democratic procedure. The institutional structural rules of administrative departments should work on this basis of whatever the establishment of village organization or establishment of township government applies to the above political principle. However, practically, the current reformation of governmental institutions is far from such democratic procedure as the cornerstone of democracy is considered as the correct direction to institutional reformation of grassroots governments.

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Fiscal Standing and Debt Crisis

3.1. Hard-Pressed Township Finances Township finances were set up in the late 1980s, leading governments to new practices, including financially speculative behavior. In the mid-1990s, important changes also took place in the townships’ financial system due to the effects of the tax-sharing system. Today’s system of township finances basically took shape at that time. Due to changes in the financial system itself, and also due to evolutions in the economic structure, the financial activities of township governments have become unprecedentedly complex, making it extremely difficult to research township finances.

3.1.1. Financial systems During the collective era, the communes’ finances were subject to unified control of revenues and expenditures by county-level governments. The communes had no control over finances, and counties and communes belonged to a single financial unit. After the separation of government and commune management and the setting up of township governments in the 1980s, township finances emerged. County and township finances “ate in separate mess rooms”, and “two-level finances” emerged. Judging from our investigations, there

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are, in the main, two types of financial relations between counties and townships today: First, townships collect the taxes, share revenues with higher levels, and each level balances its own books. Among the 20 townships we surveyed, 19 townships used this system. The basic method consisted of “fixing the base figures (that is, the amount of tax revenues the townships are allowed to keep), no subsidies for deficits, and sharing of excess revenues.” The specific ways of implementing this differed somewhat in each locality, but the heart of the matter was the same, that townships “seek equilibrium on their own”, namely, manage their own salary payments and other expenses to avoid deficits. The specific methods of fixing the base figures were negotiated between the county and prefectural governments and the township governments. Among the 19 townships, one had its own treasury, but most of the townships submitted all of their revenues to the county authorities, who then returned a portion according to the stipulated base figures. Second, County-level fiscal planning. One township in an economically underdeveloped county in east China used this system. The salaries of fiscally supported personnel were put under overall county- level planning, but for all other expenses the township should seek its own funding. The basic process consisted of submitting 25% of the total amount of state tax payments and 60% of the total amount of local taxes to the county. Simultaneously, the salaries of all on-budget personnel (bianzhi renyuan), including teachers, were issued in a unified manner by county finances. County-level planning in this case was obviously different from the fiscal system of the past, because unified planning here covered salaries only. Apart from salaries, county and township finances continued to “eat in separate mess rooms”; the townships were still responsible for administrative fees and construction expenditures, and the township governments still had base figures for tax-collection assessments, all of which placed heavy financial pressures on them. Information we obtained showed that “county-level fiscal planning” is becoming more common, especially in economically backward regions, as counties and prefectures attempted to ensure salary payments to government personnel.

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3.1.2. Financial revenues Township financial revenue is divided into budgetary revenues and extrabudgetary revenues. The main items of budgetary revenue are the “four agricultural taxes” (the agricultural tax, the agricultural and forestry special products tax, the lease tax, and the land-use tax), all or most of the local industrial and commercial taxes (business tax and income tax), and a smaller amount of state industrial and commercial taxes (value-added taxes and enterprise income taxes). The main items of extrabudgetary revenue are the original township unified planning revenues, administrative fees (such as handling fees for rural housing- site land), monies from fines and confiscations (such as family planning fines), and dedicated funds obtained from the relevant departments. The revenue structure and level of revenues differ greatly among the townships. One might say the existences led by poor and rich townships are “poles apart”. The richest township we came across during the survey was in Zhejiang province. It had a population of 45,000, and the township’s financial revenues in 2002 totaled RMB47 million, of which RMB17 million was budgetary and RMB30 million was extrabudgetary. Of the extrabudgetary revenue, income from land sales alone accounted for RMB10 million, and subsidies from higher- level finances, RMB7.99 million. Administrative fees came to RMB4.26 million. The poorest township was one in Ningxia province. It had a population of 12,000, and RMB130,000 in financial revenues from its own level. It submitted all tax revenues to the higher authorities, which accorded it RMB630,000 in subsidies — a differential of RMB50,000. After the tax reform it had no more extrabudgetary income or any other items of revenue. Another relatively poor township in Hunan province had a population of 16,000, RMB570,000 in financial revenues at its own level, and RMB160,000 in transfer payments from higher levels, giving it a total income of RMB730,000. Revenue structures also differed greatly. Economically underdeveloped localities relied, in the main, on agricultural tax revenues (the “four agricultural taxes”). But the four agricultural taxes in economically developed localities could well be ignored and discounted, and some had already canceled agricultural taxes and special products taxes. One example of the former situation is a township in Sichuan. Its

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revenues at the township level were RMB3,000,000, of which 80% came from agricultural taxes and the remaining 20% from industrial and commercial taxes. Another example is a township in Shandong. Township-level revenues here were RMB8,300,000, of which agricultural and forestry special products taxes accounted for RMB6,120,000 and the agricultural tax, RMB80,000. The rest consisted of industrial and commercial taxes and transfer payments. The economic pillars of this township were vegetables and fruits. Among the individual cases we investigated, financial revenues were less than expenditures in 11 townships, balanced in three townships, and greater than expenditures in six townships (see Table 1). In the county-level assessments of township governments, revenue raising was the task of first importance. To fulfill this task, township governments were compelled to use abnormal methods. The methods that were frequently cited during the survey were:

Method 1: “Empty running” of finances — using loans to pay county-level finances. Four townships admitted to such methods. One township explained:

The target for local taxes in 2000 was RMB2 million, but only RMB790,000 was collected. Since the target could not be fulﬁ lled, the

Table 1: Fiscal Revenue of 20 Townships Total Revenue (10,000 RMB) Range <100 100–200 200–300 700–900 >1000 Number of 36 722 Township

Proportion of Agricultural Tax (%) Range <10 10–20 30–50 50–70 >70 Number of 24 743 Township Proportion of Industrial-commercial Tax (%) Range <10 10–20 30–50 70–80 >90 Number of 14 843 Township

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only recourse was to “run empty”. This was done by fi rst borrowing more than a million from the credit cooperative and sending this up, and when county fi nances paid back the money, it was returned to the credit cooperative. Also, of the state taxes not a fen less may be submitted to the county authorities. Anything less is deducted from the base fi gures.

Method 2: Buying taxes — transposing tax sources in other localities to the township in question, but this costs money. During the survey, at least five townships candidly admitted to engaging in this activity. One township explained:

The township’s overall local industrial and commercial taxes should have come to RMB320,000, but in reality only some RMB60,000 or so were collected. We fulﬁ lled the quota by “buying taxes”. Buying taxes actually means tapping other people’s taxes. Since tax receipts are inter- changeable, I looked for taxpayers in other places through friends and acquaintances, asked them to pay their taxes to me, and I gave them tax receipts. For instance, I accepted RMB9,000 in payment for a tax receipt for RMB10,000. I handed up the taxes, and then balanced the books by using [false] invoices to offset the missing portion as expenditures.

Method 3: Tax payments by means of advances. When tax collection quotas could not be fulfilled, township cadres found ways of paying them by means of advances. The advanced funds usually were raised by individuals. Some of them were raised by township leaders, and some of them by specific personnel who had failed to fulfill their tax-levying quotas. Such funds were obtained from personal savings or loans. In form, this resembled “empty running”, but was not empty running because the monies were not paid back from return payments (fan huan). In one township we were told:

“This paying of taxes by means of advances is quite common over here. It started in the late 1990s. In the two years I have served as party secretary in this township, I have already paid more than RMB20,000 by means of advances. And all of the money I borrowed under my own name, because it is no longer possible to borrow any money under the government’s name.”

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3.1.3. Financial expenditures Although township revenues varied in size and source, there was a high degree of similarity in how they were spent. Administrative fees accounted for a high proportion of total expenditure and, as a rule, little was spent on public causes. Administrative and management expenses directly relate to the governments’ own survival. These consist of two parts, namely, “head-count expenses” (mainly salaries and the relevant personal benefits) and overhead expenses, also called “money for meals”. Expenses used directly for public purposes are called “money for operations” (banshi de qian). First, Head-count expenses. Head-count expenses are generally the largest portion of the budget. They account for a somewhat lower portion in townships with better-off finances, and a higher proportion in townships with financial difficulties. However, no matter how difficult the finances, an appropriate ratio must be maintained for both head-count expenses and overhead expenses because overhead expenses are indispensable. At times, townships choose to delay salary payments rather than suspend everyday business administration. In these townships, head-count expenses account for 50% to 70% of total financial expenditures. Even in townships with three or four months of salary arrears, actual headcount expenses account for no more than 80%. Second, Overhead expenses. These consist primarily of reception expenses, newspaper and publication expenses, and automobile expenses, and secondarily of electricity, telephones, heating, and so forth. There are also travel expenses for inspection and study trips and, in many situations, gifts.

(a) Reception expenses. Township cadres are the smallest of officials. All visitors come from above, and must not be treated poorly. Generally speaking, they all stay for a meal and drink a bottle of liquor, and the more special among them must be presented with a gift of some local product. Townships with prosperous finances must entertain, because they are prosperous. Townships with shaky finances must also entertain, because they are poor. Some

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township party secretaries said: “If you are so poor you cannot even entertain visitors, even fewer people will come, and you will have even fewer opportunities.” It is not unusual for a township with revenues totaling RMB1 million and several hundred thousand yuan to spend a few hundred thousand on entertainment. When did this practice of entertaining and wining and dining begin? This was the opinion of most people in the mid-1980s. As for the reasons, township cadres have many stories, but two stand out. One is that the practice came from the “support-the-Left” army cadres during the Cultural Revolution. The other is that it was caused by increased socioeconomic interactions of the reform era. (b) Newspapers and publications expenses. This expenditure ranges from RMB16,000 to more than RMB100,000. At township governments, bundles and even heaps of unwrapped newspapers and publications are often visible in the corners of offices. Theoretically, the township governments themselves should have the last word on the number of newspaper and publications they subscribe to — to say nothing of the repeated central government orders against apportioned or compulsory subscriptions — but the reality is quite different. Investigations into the internal mechanisms of this matter have revealed what might be called a dual motivation. First, there is a political motivation. Command- type subscriptions of newspapers and publications at the upper levels evolved into pressures exerted by the central, provincial, prefectural, and county authorities on the levels below them. The upper levels included party newspapers and publications in the assessments of those below them. The non-fulfillment of [subscription] quotas directly affected political performance reports. Some non-party newspapers and publications were also included in assessments. Fulfilling these quotas affected relations with counterpart departments at higher levels in addition to performance reports. Second, there are monetary motivations. The distribution of virtually any newspaper or publication builds up a profit network. Percentages of the distribution fees of a

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provincial newspaper are shared at every level — by sponsoring departments in the counties, by sponsoring individuals in the townships, and by county and prefectural authorities. Percentages drawn from distributions are among the main sources of funds for the “small cashboxes” of some departments. Individuals in the townships also benefit. Hence, everyone high and low shows enthusiasm for percentages. The only people who do not show enthusiasm are the peasants because they have no opportunity to participate or to voice their opinions. One might well say that the distribution of newspapers and publications in fact combines political operations under a centralized power system with commercial operations driven by material benefits, and as such puts into sharp focus the flaws of the present government system. (c) Vehicle fees. During our survey, we found that the poorest and smallest townships had one motor vehicle, while the more prosperous ones had 10 or more vehicles. Generally, the party secretary had to have an Audi or a Santana 2000, and the township head had to have a Santana 2000 or an ordinary Santana, or at least a 212 Jeep. At the most prosperous townships, all members of the party committee leading group had personal cars and driv- ers. These cars run up more mileage in a year than taxis in Beijing. Fees for petrol, maintenance, and toll roads constituted an enormous and obligatory expenditure. Even if a township was unable to pay salaries, its cars had to run as usual. In their own words, “We cannot pay salaries as it is, but if we cannot even get around, we are sunk!”

Third, Public affairs expenses. These include building roads, setting up schools, social welfare (for poor households that receive the “five guarantees” and old-age homes), family planning subsidies, education and health, and so on. Judging from the expenditure structure it was evident that the ratio of such expenses was very small. We noticed, among the total expenditures of about RMB750,000 of a township in the western region, only two items could fall under public affairs. These were “RMB10,000 plus in subsidies for elderly

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rural party members and elderly village cadres” and “RMB40,000 plus in expenditures for family planning”.

3.1.4. Salaries Average salary incomes differ for township personnel. At three townships, the average monthly income of cadres was RMB400–RMB500; at 11 townships it was RMB500–RMB700; and at six townships it was over RMB800 (at three of the latter it was over RMB1,000). Of the two townships with the highest salaries, one, in Sichuan, provided an average salary income of RMB1,236 and the other, in Zhejiang, provided an average of around RMB3,000. Of the 20 townships, seven were able to issue salaries promptly and in full; five could issue salaries in full, but not on time; and seven were able to issue them on time, but not in full. Within the townships, there were also differences in salary-payment circumstances. For instance, some townships were able to pay salaries on time and in full to administrative personnel, but salaries for service department personnel were frequently in arrears. With regard to the duration of arrears, in most cases payments were about two to three months late, generally during tax-collection slack seasons. Salaries were paid basically on time in the first half of the year, but only once, or sometimes twice or thrice, in the second half of the year. Salary arrears become more serious after 1998. Among townships with serious arrears, some had paid no salaries for four to six months. In the last five years, some townships had not paid salaries for a total of 20 months, and in others, some of the personnel had not been paid for two years in succession and were owed between RMB6,000 and RMB20,000. Salary differentials among cadres of different departments are structured through a township’s financial system. Among the 20 townships, 18 had partially funded departments and 12 had self- supporting departments. The salary circumstances at these departments were largely unrelated to township finances as a whole, because they had to look out, to a certain extent, for their own incomes. In terms of fiscal structure, partially and self-funded departments were of three types: (1) the entire department constituted a single fiscal entity

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that had connections with township finances. For example, township finances were required to give them a fixed subsidy, but they were responsible for the rest of their expenditures; (2) in some departments, some personnel were on budget, while others were partially or wholly dependent on off-budget revenues; (3) departments that the township governments had explicitly assigned the task of creating income. Their salaries were linked to the fulfillment of this task. On the whole, partially and self-funded departments all have their own fee-collecting projects. The fees collected are of two kinds. One kind consists of administrative-type fees, such as those collected by land bureaus, enterprise affairs offices, judicial bureaus, market management bureaus, and urban construction bureaus. The other kind consists of service-type fees, such as those collected by agricultural service centers, rural accounting stations, forestry stations, family- planning-service stations, agricultural machinery stations, agricultural technology stations, health centers, broadcasting and television stations, economic management stations, and animal husbandry stations. This [fee-collecting] situation cannot be avoided under the present system of township finances. Where the townships are concerned, collecting fees for the purpose of supporting their personnel is a logical choice. However, doing so results in fee collection evolving into a matter of first importance and public administration and service provision being relegated to secondary importance. Changing this situation requires alterations in both the financial system and the government system as a whole.

3.1.5. Tax reforms Among the 20 townships, 18 had already conducted or were conducting tax reform, and most of these townships had begun doing so in 2002. Leaders described benefits and costs of the reform. The benefits of the tax reform were: (1) the work of township government had become more simple because of fewer tax-collecting tasks, and the governments’ functions needed reorientation; (2) tax- levying tasks had become easier to fulfill; (3) township financial administration and especially village-level financial administration had

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been standardized; (4) tax reform had mobilized the peasants to invest more in the land; (5) the burden on the peasants had been reduced, easing relations between cadres and the masses. The disadvantages included marked reductions in the sources of township finances and the corresponding difficulty in funding everyday operations and the construction of various public benefit and welfare projects. In addition, difficulties in paying salaries have led to a reduction in cadre enthusiasm in some places.

3.1.5.1. Conclusion Case analyses show that a high degree of polarization in the state of township government finances has occurred under the current system. The poor are very poor and the rich are very rich. On the whole, however, the great majority of townships are financially hard pressed and there is a large structural gap in their revenues. The direct perception is that townships deflect crises in their finances by means of three channels: (1) some townships make more departments self-supporting; (2) most townships delay or owe personnel salaries; (3) many township governments incur debts. In all cases there is increasing self-interest on the part of the governments. To survive, the township governments plunder resources from the people by overt or covert, legal or illegal, means. One might say that the township is basically an institution that operates for its own sake. Although there have been fairly rapid advances in rural economic development and marked increases in local fiscal income, the difficulties in the finances of grassroots governments have grown more intense. When examining the genesis of this crisis, people generally cite the serious imbalances caused by the tax reform of the mid- 1990s. However, another reason is the uncontrolled growth in the size of the governments themselves. This problem stems from a disconnect between government operations and socioeconomic operations.

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3.2. Debt Chaos of Township Governments After analyzing the debt situation of township governments, we conclude that debts are both a grave matter at the present and a profound peril for the future. The size of the debts is enormous. Although they have been somewhat reduced in some places in the last few years, the reductions have been quite minimal, new debts are continuing to take shape in other places, and in a few places the debts are increasing quite rapidly. The prospects for resolving the problem are unclear, and no one at any level of government knows of an effective solution, other than stalling. At present, debts are seriously plaguing the operations of grassroots governments and the full effects of the debt problem on township governance have yet to emerge.

3.2.1. Extent and structure of the debts Attention was directed at the debt problem at the township and village levels toward the end of the 1990s. According to a survey by the Ministry of Agriculture in the year 2000, the average debt at the village level was RMB170,000, and the average debt at the township level reached RMB2,980,000. It was apparent from other investigations that the debt problem in some regions was even more serious. According to a survey by the Finance and Economy Committee of the Anhui Provincial People’s Congress, by the end of 2003, the debt of Anhui’s county and township governments amounted to RMB31.3 billion. Of this figure, county-level governments owed debts amount- ing to RMB18.1 billion, with each county owing an average of RMB229 million; and the townships owed debts totaling RMB132 million, with each township owing an average of RMB7.53 million. The debt situation in the 20 townships investigated during the present survey was much better than the situation in Anhui, and better than the situation nationwide a few years ago. It should be said that major measures to clear up and eliminate debts were initiated nationwide in recent years, and it is believed that these efforts have borne

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Table 2: Debt Scale of 20 Townships (10,000 RMB)

<100 100–300 300–500 500–700 >800 Number of 53332 Township

fruit. At the very least, the debt situation is clearer than before, and debt elimination has had a certain effect. Among the 20 townships, four declared they were free from debts, and 16 owed a total of RMB56 million. Five of the townships owed less than RMB1 million in debts, six townships owed between RMB1 million and RMB5 million, and five townships owed more than RMB5 million. The maximum amount of money owed was RMB10 million (see Table 2). The basic composition of the township debts is quite complex and includes money owed for setting up enterprises, money owed for bringing education up to standard, agricultural development investment, infrastructure investment, advances for tax payments, money raised from private individuals, auxiliary projects for attracting investments from overseas, and unpaid salaries owed to cadres (see Table 3). According to township leaders, monies were owed to construction teams and labor contractors in nine townships; peasant household businesses and individuals in six; credit cooperatives in five; banks in five; cooperative foundations in four; the working personnel of township organs in three; higher-level governments in two; and the World Bank in one. The leaders of three or four townships were unclear about how much the township governments owed. The reasons for this were mainly that the debts had occurred as long as 10 or more years earlier and the leaders of the townships had turned over several times already. The current leaders felt no responsibility for paying the debts of their predecessors. They showed no interest in the debts unless someone constantly pressed for payments. In such cases, even con- firming the debts was quite difficult. Some monies had been borrowed personally by previous leaders, some borrowed by enterprises

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Table 3: Formation of Township Debts

Number Amount of Townships in of Debt Proportion Causes of Debts Such Debt (10,000 RMB) of Total Debts Loans for Business 6 about 700 about 12% Operation Investment on 6 about 850 about 15% Infrastructure and Other Constructions Loans for Achieving 5 about 960 about 17% Educational Targets Debts owed to the 5 about 930 about 17% Rural Cooperative Foundations Unpaid Wages and 3 about 820 about 15% Debts owed to individuals Daily Expenses 3 about 550 about 10% Interest on Loans 2 about 530 about 9% Before Advance Tax 1 about 280 about 5%

Note: Among five townships mentioned above owing debts for achieving educational targets, three of them assumed such debts accounting respectively for 20%, 33% and 40% of their total debts, and the percentage for the other two climbed to 70%. Among five townships mentioned above owing debts to the Rural Cooperative Foundations, such debts accounted respectively for 5%, 30%, 40%, 60% and 86% of their total debts.

formerly operated by the townships, some borrowed by certain departments, and some may have been investment funds. It was difficult to establish which of the monies constituted real debts and who was owed what. The township governments also had to determine which monies were owed to them by others, likewise a complicated process.

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The party secretary of a township in Shandong said:

I am not certain how much debt our township owes. More than RMB1 million in debt was racked up a few years ago for bringing education up to standard. Debts were incurred by old township enterprises. The township borrowed money as security for operating these enterprises, and when the enterprises collapsed the debts fell on the township. These debts amount to more than two million. The family planning service stations have RMB350,000 in debts, and the cooperative fund has more than two million. The average amount of debts formed over the past fi ve years is not big, and stemmed mainly from the dismantling of the cooperative foundation and interest on previous loans. The creditors are banks, credit cooperatives, labor-contracting teams, as well as individuals. The debt is larger if unpaid salaries are counted in. The debts have adversely affected the township’s work. This year, I have received quite a number of court summons because creditors are suing me as the [township’s] legal representative, so I must respond to the charges and think up ways of doing so. The township has spent more money on hiring lawyers and consultants at RMB6,000 per year to help me fi ght the lawsuits and respond to the charges. The township has no way of liquidating debts. Some of the debts were transferred away in the last couple of years during the enterprises’ systemic changes, but those that are left are all tough cases. The township has less income than it had previously, and other ways of raising funds and collecting fees are no longer permitted, so the debts can only be paid off gradually by fi nances. The state will probably have to come up with some policies.

Three types of townships had no debts. First, townships with capable leaders, or those that were able to get money from the higher- ups, or where the township enterprises produced relatively good returns. Second, were those that previously had debts, but had eliminated them in the past few years. Third were townships in areas so impoverished that the accumulation of debts was impossible to begin with. One township leader said:

Here, townships that have few or no debts are the remotely located ones or the weak ones. Where the scale of development is small, the rate of growth is slow and there are few sources of money for

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cooperative funds, and correspondingly few debts on the [township] governments. The peasants in remote townships are relatively simple and unsophisticated, and collecting taxes from them is relatively easy. Many people in the more remote townships are unwilling to come out and work, so there are fewer township cadres and correspondingly fewer personnel expenses. And remote townships are rarely inspected by various higher-level departments, and so have to spend less on entertainment.

3.2.2. How the debts grew Most township debts began during the late 1980s. Debts incurred by setting up enterprises emerged mainly between the late 1980s and the mid-1990s; six townships cited debts from the operation of enterprises in that period. Debts from rural cooperative foundations took shape mainly in the early 1990s; five townships had debts in this respect. Debts incurred by bringing township education up to standard stem from the mid- to late-1990s; five townships reported debts in this respect. Among our 20 townships, the earliest debts dated from the year 1984 and were incurred by township investments in the construction of power stations, and the latest debts were being incurred right at the time of this survey. Four townships were still incurring debts in 2003. In Hebei province, one township had a debt of RMB3.29 million, out of which RMB2.12 million stemmed from setting up township enterprises in the 1980s, and part derived from loans for reorganizing the agricultural structure and developing tourism in the last few years. A township party secretary in Sichuan said:

The formation of township debt is closely linked with the rural cooperative funds. Our township’s debts began in the early 1990s. No sooner was the cooperative fund established than it became the township government’s “little cashbox” (xiao jinku). Previously, the government lacked money for starting up any kind of project, and the cooperative fund became the government’s most convenient channel for raising money. It funded enterprise start-ups, road building, and irrigation projects. Funds were also raised through other channels, such as loans from credit

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cooperatives, funds raised from individuals, and monies for paying off labor contractors and construction projects.

A township party secretary in Hunan said:

The township government currently has a debt of RMB840,000, and in March this year it will pay off the principal and interest owed to the populace by the rural cooperative fund, which will at once create a new debt of RMB250,000. All the present debts were incurred in 1998. There is also a debt of more than RMB300,000 incurred during the campaign to raise the standard of education, and of this more than RMB120,000 is owed to labor contractors and RMB170,000 to the county bureau of education. Every single township here has debts, especially from bringing education up to standard. Everyone wanted to build the most attractive schools. Last year I went to look at a school. The building was ﬁ ne, but only two students were studying there. A great waste. There are more single children now, and fewer elementary school students. Teaching is of poor quality in the rural areas, and some parents prefer to pay to send their kids to study in the towns.

During the 1990s, the central government put forward a series of requirements and measures for eliminating debt. The present survey indicated that these efforts produced no obvious results. Since 1998, townships have incurred new debts, and the debts of some townships have in recent years increased at a rate of almost RMB1 million per year. However, the average rate of debt increases has slowed and there have been noticeable changes in the structure of the debts. New debts have been incurred on the basis of older debts, such as by paying interest on the older debts or by paying off the older debts (three townships cited new debts in this respect). New debts were incurred for rural infrastructure projects (three of the townships mentioned that they owed a total RMB3.2 million for the construction of asphalt roads “to link up every single village” and irrigation projects in 1998 and 2002). Five townships also incurred debts for management expenses, such as paying salaries, entertaining visitors, or conducting inspections. Two townships incurred debts constructing office buildings, while two incurred debts setting up enterprises and investing in agricultural development.

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In sum, the main factors that had previously led to debts, such as township governments setting up enterprises, cooperative foundations, and bringing education up to standards, no longer dominate. What had increased were debts resulting from the governments’ own daily operations, the construction of public facilities, and advances on tax payments. At a township in the southern part of Sichuan province we were told: Our current debts amount to RMB8.376 million. These were incurred in 1991 when the township borrowed money to start up agricultural development projects. In recent years, our debt has grown at a rate of RMB600,000 to RMB700,000 per year. The monies are used for advances on tax payments, salaries for township cadres, and infrastructure construction. The main creditors are the county government, the Agricultural Bank, private parties, and cadres and employees who have raised funds. Because of the township’s debt, work enthusiasm among cadres and employees has greatly suffered, and the township leadership has been compelled to sell township real estate, land, cars, and so forth. Some townships do not even have office space or living quarters and can only keep up their work by borrowing accommodations in schools and private quarters. All townships in our county are in various degrees of debt today, and if the higher-ups do not turn out some favorable policies, the townships’ debts will only snowball! Township leaders gave the following reasons for their debt. First, leaders were replaced too frequently and few leaders had motivation to eliminate debts. Second, debt elimination was not a criterion for cadre assessment. Third, the higher-ups used fulfilling tax quotas as the main criteria for assessing township leaders and so, when the latter were unable to collect enough taxes, they borrowed money.

3.2.3. Effect of debts and prospects for their elimination The effects of the debts differed with each township. Among the 16 debt-ridden townships, four maintained that their work was seriously affected in the following ways:

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Paying off the debts affected development plans. When debts had to be paid off, the townships placed debt payment on their operating budget, directly affecting other work. Sometimes, borrowing money became difficult because previous loans had not been paid off, and funds obtained from other places might have been directly withheld by banks. Creditors pressing for debt payments affected the governments’ everyday work. In many localities, creditors frequently came to their premises to demand payment or press charges, while the township leaders either hid from the creditors or came out to placate them. Sometimes they had to go to court to respond to lawsuits, or they slipped out of their offices to avoid creditors. They even shut down their mobile phones or change the numbers. Where the creditors were large numbers of ordinary peasants, the debts could lead to social instability. Most typical of this were the debts to cooperative funds. The volume and extent of such debts had led to wide sections of the peasantry refusing to pay taxes and even collectively laying siege to the governments. The leading members of two townships stated that debts had no great effect on the governments’ work, because “it makes little difference whether there are any debts or not since they cannot be paid off ”. These townships generally did not owe large debts, and the creditors were mainly government departments or banks. If the township did not wish to pay up, there was little the creditors could do. The party secretary of a nationally designated impoverished county in Shanxi province said:

Every township in our county has debts. Our township debts amount to some RMB200,000, of which more than RMB100,000 was incurred over a decade ago by setting up township enterprises and developing fruit orchards, and RMB60,000 was borrowed in 1998. Also, some money has been borrowed piecemeal these last few years from individuals to meet emergencies — a few hundred or a thousand yuan, which we paid back when we had the money. These did not create any problems. It is those big debts that we are unable to pay off. The creditors often come to me to demand money. In any case I do not have any money, so those debts are

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left hanging. In my view there is no way we can eliminate those debts. The solution for the debt problem depends entirely on economic development. Once the economy develops and sources of taxation increase, these debts can be paid off.

A township party secretary from northern Jiangsu province said:

Not many townships in northern Jiangsu are free from debt. By the end of the year 2002, our township had an aggregate of RMB1.5 million in debts, about RMB500,000 of which is owed to banks. Most of the remaining monies are owed to business owners who contracted to build projects. All the creditors will come to demand payment at the end of the year. This is very troublesome. We have no way of liquidating these debts. Debt payment is being done mainly by getting funds from the outside, as, for example, funds provided by the units that initiated or helped build the projects. The funds obtained in the last couple of years have been used in the main to pay off debts.

As for the prospects for eliminating township debts, practically all the township leaders we interviewed maintained that there is no way of doing so. Only one township party secretary had hopes of obtaining some funds from the higher-ups. In situations where debts had to be paid, the townships incurred new debts to pay off old ones, or sold off houses and land, or diverted funds slated for other uses. When the townships’ long-term prospects were discussed, township leaders hoped to develop the economy, cultivate sources of taxation, and increase incomes. However, they themselves did not believe that this was realistic. Many maintained that state assistance was needed. They knew, however, that this idea was also unrealistic.

3.2.3.1. Conclusion The problem reflected by township debt appears, on the surface, to be one of poor management and slack administration, but in reality it is a structural problem. Debts were formed in different periods and were the result of various administrative orders and the “mass movement” style of work, such as those evident during the development of

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township enterprises, in the requirements that education reach certain standards, in the compulsory subscriptions of newspapers and publications, and in the construction of high-standard office buildings. In many respects, the government continues to govern the rural areas by the operational model of the people’s communes, with the work methods of administrative control and “mass movements”. In the domain of economic development, such as the development of township enterprises, administrative mobilizations have been used to “go all out and go fast”, to have “all villages operate enterprises, and every household start up projects”, and even to “eliminate industry-less village”. In the domain of social development, such as compulsory education, administrative orders have been used to commandeer fees from the peasants and enterprises, and even to borrow money from various quarters, or to demolish old schools and build new ones. Ultimately, school buildings have been brought up to standard, but heavier burdens have been placed on the peasants, triggering much discontent, and huge debts have been incurred by communities, local governments, and school authorities. Many schools have even been closed down by creditors. In the domain of political mobilization, activities related to “learning and teaching the three represents”, for instance, have also been conducted in the manner of a mass movement. Village cadres have been assembled by the townships for meetings and studies lasting several days on end, during which they listened lackadaisically to “reports” and engaged in irrelevant “discussions”. Such study sessions required expenses for meals and entertainment, subsidies for time absent from work, and money for buying materials and printing documents. Surveys of the operational mechanisms of grassroots governments showed that the townships revolve entirely around directives from higher levels. All tasks and quotas are formulated and passed down by the higher authorities; inspections and assessments are determined by the higher-ups, as are all incentives and sanctions. The assessments are closely linked with promotions and material remunerations of the township leaders. Failure to meet quotas not only precludes the possibility of commendations and promotions, but also entails “yellow card warnings” and even summary “dismissals from office”. Under

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such pressure, township leaders often choose two extremes. One is to engage in deceit, fabricate figures for reporting to the higher-ups, play numbers games, and engage in formalism. The other is to “force things through”. Where there is no possibility of practicing deceit, they try to “tough” things out by issuing mandatory work orders and, in terms of finances, borrowing and spending money to put on a “show”. From the perspective of the higher levels, the intention is to accelerate development for the benefit of the peasants. The problem, however, was that in this process of pressurizing from above, the peasants are ignored. The craving for success on the part of grassroots governments frequently results in wasting labor and money, and it is the peasants who have to bear the losses. Ostensibly, all is done for the sake of the peasants, but in the grassroots governments’ actual systems the peasants are mere figureheads. The higher authorities have a good grasp of the means and methods for controlling grassroots cadres, but these same authorities are unaware of the grassroots cadres’ true behavior. In their work, grassroots cadres pay more attention to the whims of the higher-ups than to the feelings of the peasants. Investigating the formation of township debts gives one a clear view of the problems in the government’s accountability institutions (wenze zhidu).

3.3. Politics in Finance Investigation found that the township finance has a high degree of differentiation with the phenomena of “the poor poorer, the rich richer” in the so-called “taxation sharing responsibility” financial system. As a whole, the finance for the vast majority of the township is moderately tight with huge structural differences in financial revenue. In terms of financial expenditure, township finance is the one which struggles to survive and lacks the fundamental sense of public finances. In general, township government transferred the finance crisis through the following three approaches. First, part of the township departments engaged in self-supporting or executed the balance

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to allocate funds. Second, a large number of township governments fell behind the officials’ wages. Third, township governments were in debt heavily. One key issue can be accused from these behaviors which is the selfishness expansion of the government, being overtly or covertly, illegally or legally to intake the private resources to maintain their own survival. Judging from the financial angle, township government in principle is an organization operating for its own. Although the rural economy has been developing rapidly with a significant increase in local financial revenues since these years, there have been also intensive financial difficulties which finally transferred into township financial crisis. Investigating the process of the crisis, people might accuse that the “taxation sharing reform” of the mid-1990s led to the serious imbalance relationship of the intergovernmental distribution. Under such circumstances, the popular practice of “matching funds” further exacerbated the financial imbalance of the grassroots and enhanced the serious financial crisis for those poor financial performed local areas. Such an approach has obviously negative effect as more input from the higher levels of government towards the grassroots, equivalent input are requested from the grassroots level itself; and vice versa, less investment from higher levels of governments, the less investment in grassroots levels. It is an irresponsible government fiscal behavior regardless of power. Therefore, it is essential to develop a set of new principles for public finance within which government at all levels should take fully their respective responsibilities in certain category of financial activities. The leaders from higher level of government should not prevent the freedom of local officials in financial management. It requires changing the fundamental system of government management.

3.3.1. The financial crisis and financial system For the central government, grassroots finance has been an area lacking of attention and research. Research on the township finance attracted concerns from the research circle relatively late. It was until 1990s that some studies focused on such areas. Prior to these, more

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attention was concentrated on the relationship between central and local governments. The local mainly refers to the province level. Under the provincial government there are different levels of local governments. Few researches were specialized in them and their respective financial relationships. Research on grassroots finance only received much attention mainly due to the breakout of serious problems from the grassroots financial system, especially after the breakout of a large number of township debt. Western research literature on local finance has been focusing on the core relationship between the central and the local with little attention to the grassroots finance. In methodology, these studies tend to be more macro and lack the direct observation on the grassroots finance, let alone the description on its operational issues. Nevertheless, these researches provide useful directions to analyse the trend of grassroots government finance at the macro level. These researches concentrated on the “Taxation Sharing System” in the mid-1980s and 1990s. According to Susan Shirk (Shirk, 2007), the financial reform in 1980 was in fact a compromise from the central to the local which indicated that the central government was unable to receive more income through re-centralization yet hoped to achieve revenue growth in sync with the local increase through further decentralization. According to Jean Qi, the granting of local access to the tax commission by the central government in the early 1980s provided the structural motivation for the economic development. However, the central government paid a considerable price in promoting local economic development. Due to the dwindling fiscal revenue, the central government faced a crisis which eventually led to the central government fiscal reform in 1994. Therefore, the supervision and regulation from the central towards the local were weakened and economic reform then quietly planted the seeds of political reform. According to Elizabeth J. Remiek (Remiek, 2004), in the 21st century the Chinese government must allow the local to be adjusted in adapting to the environment; otherwise, the central government will face growing local resistance, or even violate tax riots. Since the beginning of 2000s, the grassroots financial crisis in China has already had significant economic and political consequences. Christine Wong

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(Wong, 1998) focused on the issue of intergovernmental fiscal relationship. According to Wong, highly decentralized financial system has weakened the effect of policy improvement and exacerbated the imbalance among regions. She believes that the budget reform in China has made some progress in establishing a basic budget framework, however, some issue still need to be corrected such as exclusion of important decisions from the process of making budget and the huge amount of expenditure outside the budget. The biggest challenge facing with Chinese government is its highly decentralized financial system. China has five levels of government in central, provincial, city, county, township. The expenditure from the Central government accounted for 30% of total government expenditure with the remaining 70% from all other levels of the government. There is a lack of efficient financial control from the Central government on governments at lower tiers (Wong, 2007).The central government has clearly recognized the problem that the unmatched fiscal revenue and expenditure of local governments at all levels imposed a huge pressure on local budgets, therefore, it by default, and even encouraged local governments to expand the income resource through seeking some approaches such as “self-reliance” and “fend for themselves” etc. The result of such practices gradually led to the external resource of which the local governments at all levels allocated exceeded the one in budget category. Overall, the “Taxation Sharing” financial policy since 1990s exacerbated the centralization of power and the local fiscal difficulties. All above-mentioned researches reveal the relationship between central and local governments and touch on the problem of local government financing itself. From the analysis, we could find that the township finance crisis, to a large extent, is the result of the excessive financial centralization. However, previous researches have not yet had detailed observation on how such fiscal problems affected the grassroots government and its people, and how it led to the malignant relationship between the government and the farmers, in particular, the plight of operation of grassroots governments. The township financial crisis observed by this research opens a window for the pros and cons of the government’s financial system.

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3.3.2. Financial crisis and go vernment accountability The financial crisis also stems from the government’s accountability system with which first out between the upper and lower levels of government occurs. Township fiscal crisis is the causal result of the government accountability system which is forced out by the higher levels of government under current system. The government operational mechanism is still in a color of totalitarian. On the surface it is the issue of incompetent operation and management, in essence, it is the issue of government operational system. These debts were raised in different periods with different executive orders and mass movements, such as the development of township enterprises, the enforcement of compulsory education standards, the subscriptions of newspapers and periodicals, the construction of the exceeding standard office buildings and a variety of so-called “image” projects so on and so forth. The fundamental reason is in many ways the government still runs in a same format of the old style “people’s communities” in governing the rural areas. The mode of operation still has a profound administrative control and embeds in the form of so-called “mass movement”. In the field of economic development, take the development of township enterprises as example, there is a strong push from the administrative mobilization and mass movement to “go faster” and a mopping up of implementation of so-called “villages to run business, and households on projects”, and some even called for “the elimination of villages without industrial ability”. In the field of social development, take the enforcement of the nine year free education standard for example, where farmers and enterprises were charged or loaned by executive orders, old school buildings were demolished to be replaced by new buildings. As a result, although the targeted standards were reached, they were paid on the price of the heavy burden on unsatisfied farmers, and huge debts on both local government and school, any of which were cornered and sealed by creditors. In the field of political lobbying, such as the “Learning and Teaching of Three Represents theory”, it is fundamentally a mass movement style. Village cadres was gathered together to learn for several days, during the course they

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listened to “report” absently and engaged in “discussion” loosely. The so-called “learning” requested dining to entertain, subsidies for working allowance and expenses in materials that are both time-consuming and money-consuming. After investigating the operation mechanism of the grassroots government, we found that the township runs completely based on various instructions from the upper levels with tasks, targets reviews, assessments, incentives and penalties all set by the superiors from the upper levels. Such assessments are crucial to the career, promotion, and personal benefits of the township leaders. There are clear indicators-setting and intensive judgment on projects such as Development of Township Enterprises, School Building to reach compulsory education standards, Structural Adjustment of Agriculture (such as the scale of farming and scale of planting), and the later on Attracting Foreign Investment. Projects that are unable to achieve the target are considered hopeless in promoting the agenda. Therefore, some are banned with “yellow card” warning, and some are even requested to be remove from office immediately. Under such pressures and if the resources are beyond the normal operating range, township leaders often make the choice that requires extreme approaches. From the point of view of the higher authorities, motivation to put pressure is good which aims to speed up the development and benefit the farmers. However, it was the farmers who were ignored in such a tight top–down layers of process. The grandiose approach from the grassroots governments often result in a huge waste of human and capital resources and consequently the burdens are in turn bearded by farmers. Although it claimed to be dedicated to the farmers, they are in fact sidelined in the practical grassroots government system. They are in a more passive position to accept the reality with little capability. The superiors mastered grassroots cadres by all means; however, the true performance of grassroots cadres is beyond the surface as the grassroots cadres eyed the face of their superiors to act instead of the farmers during the course of their work. Investigating the formation of the township debt, we can clearly see the problem of government accountability.

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3.3.3. The financial crisis and the government budget Another problem behind the financial crisis is the lack of strict budget system in the grassroots governments. This is a major flaw in the system of government. People often regard the budget as only a technical task of the government work. The budget is cataloged in the financial sector in current Chinese government system. In fact, this is a serious system upside down. Either the budget is political, or the nature of the budget is politics. Finance is in the catalog of administration which should be subject to the budget, rather than the reverse. The budget identifies in a certain period of future what the government is going to do and how much it prepares to spend. It is conceivable that if a government does not have a strict budget, the public has no way of knowing what the government is doing. Such a government is almost “an invisible government”, which is unable to be supervised by the government. Similarly, the government in turn cannot be truly accountable to the public. From this perspective, the key problem in township finance is not the issue of lack of money but the lack of an effective budget system. Through investigation, we found that that the township budget has no institutionalized binding. Financial expenditure in fact depends largely on the personal will of the top township leader, which is similar to the so-called “a person government” in Chou’s analysis of the local government of the Qing Dynasty. The result of the lack of an effective budget caused the continuous and unrestrained expansion of the size of government and government consumption. It indicates that the township government is still far lagging behind from a modern administrative system. In many areas, during the township people’s congresses annual meetings, the government’s budget report are often very short in two or three pages, which is rather evasive and no way of consideration. More importantly, during the course of work the township leaders are free to increase or reduce the budgets. Because there is no budget constraints, money can casually be spend by the phenomenon. Under the circumstances, the breakout of large scale of the township financial crisis and huge debt were not suprising. In short, government

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without strict budget control system is not a modern government, as the government operation is without transparency and therefore it cannot be responsible. For government reform, democratic budget cannot be separated from democratic governance. The budget allocation of government resources shapes public life and state institutions. In examining the democratic process of some countries, budget democratization is an important element. One American scholar summarized US government budget development process: “Today the budget tells us that politicians are responsible. Regardless how it runs in reality how it runs, its existence once again assurances us” (Kahn, 2008). The period of 1880–1920 is known as the “Progressive Era” in US. It is not only the era of rapid development of the US economy, but also for a critical period of the series of institutional innovations and construction. These reforms reshaped the image of the government and reclaimed the legitimacy of the government in the public. At that time, economic development brought out many social problems, such as social injustice caused by monopoly; the rapid population growth by urbanization and the expansile demand for public utility. Before the late 19th century, there is no unified administrative budget of the Government of the United States at all levels of government, not even the public budget in modern sense. The power of budget-making is dispersed in the various functional departments who can directly submitted their draft budget submitted to Parliament for review, a magistrate at some level of the government not even had the idea about the total amount of the entire budget expenditure, the same is for the federal government. Rent seeking of power appeared due to the fragmented budget setting authorities and the waste of public resources. Likewise, the industrial monopoly tempted some interest groups to win political advantage through bribery, which was eventually in exchange for greater economic benefits through the government budget. Facing such reality, the American people gradually abandoned the idea that the government is the representative of all the interests of all citizens and held government responsible for the damage caused because of the interests of some group in pursuit for the benefit of

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another group. Omission or Chaos from the government has extended the inequality in the economic development to the political field. As a result, the aspirations and needs of ordinary people cannot be met in the economic field; however, the accumulation of wealth was still based on the wide spreading poverty. Therefore, ordinary people started to express their dissatisfaction and distrust of the government through various extreme approaches and they have initiated many populist movements throughout the country. During the period, an active force, headed by the Municipal Research Council of New York brought a systematic reform and innovation in the government. The new reform idea called for building the modern government budget system by using the methods of corporate accounting and management to reform the governance mode and the political culture. Originated from New York City, the reform quickly spread throughout the whole United States within a few years. Reformers firmly believed that in order to achieve the complete elimination of corruption, one cannot simply reform the civil service system or punish individuals by considering them as the only son and heir of the corruption in the incompetent system. The modern government budget system should be constructed in the process of democracy and determined by the budget legislation which can then restrict the power and its use in a certain range and the provisions of the areas and modalities of the government action to solve: “What are the areas or projects should be by the Government spend money”, “how much money, how to spend money” and other issues. The breakthrough of the budget reform should start from organizing the budget exhibitions to the society through opening the budget information to the public and expanding the participation of the citizens to form a smooth communication mechanism. Public budget system is an essential part of the modern government system. The core issue of public budget is in identifying the standards for allocating limited financial resources. The public budget system of modern government should be a more complete circulatory system, which is able to guarantee the basic rights of taxpayers on the one hand and to balance the interests from various parties on the other. However, investigating the operational process of township

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finance or the course of township debt in particular, the author found that the level of the institutionalization of the budgeting process is still very low. The budget is not only in absence of any binding clause but also lacking of democracy. Basically there is no way for the taxpayers and their representatives to carry out the necessary supervision on finance budget and the right of supervision is regarded as the core of budget democracy. With the cancellation of agricultural tax and the increase of transfer payments from the grassroots, especially with the enforcement of the “township finance governed by the county” policy, the grassroots government financial crisis should be said to have been eased. However, the ease of the financial crisis, or the increased payment transfer from a higher level, cannot substitute the construction of institutionalization of the grassroots government budget system. More precisely, as long as the township government is still cataloged as one level of the government, it is necessary to push forward the institutionalization of budget earnestly. The amount increase of the financial funding cannot substitute for the proper system construction. Along with transformation of China’s economy into a market economy, China has become a tax country. As western scholars said: “Tax is a prerequisite for the rise of modern democracy”. During the investigation on the grassroots level, we strongly felt that the requirements for the budget democracy from the citizens have emerged. The petitions from the farmers for rural financial issues well illustrated such trends. International experience also showed that the taxpayers tend to require their control power for the government taxation in the formation of tax policy and therefore to form a clear demands for budget democracy. As tax will reduce personal income, the state is prone to plunder during the tax collection process. An example of the case is the heavy burden of the farmers in previous years. These burdens might have plundered ingredients and the very initial impulse for democracy is rooted from the boycott of the plunders. Since there is political commitment of “from the people, benefit people” from the government, it should implement the appropriate institutional guarantees and taxpayers by nature should have the right to make such a request. The rationale is if there is no binding for the usage of

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government revenue, the money may become the personal income of the government leaders. The investigation found the fact that some grassroots leaders have the power to draw on the financial money as gifts to pave the way for their personal promotion. There are also some cases that some leaders decided to spend two or three million financial income to sponsor a local show of the celebrities while they were warmed with wine. To solve these problems, it is of essential to strengthen the construction of the budget system. The basic principle for the budget system is the budget must be open and the enactment of the budget must be a democratic political process. In China, it means that the budget must truly reflect the deliberate decision of the People’s Congress. The budget democracy is based on political democracy whereas budget democracy benefits from political gains significantly for a democratic budget can enhance the legitimacy or the validity of the government. At the grassroots level, as the government interacts directly with the public, its budget democracy should be more truthful and powerful.

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Power and Accountability

4.1. Power System of Township Governments Many people think of township governments as all-powerful dictator- ships. Though it is true that some “absolutely lawless” things have occurred, I dispute this conclusion. In today’s government system, townships are a level of government with fragmentary and incomplete power structures. On the one hand, the degree of centralized individual power is extremely high in these governments, and supervision and constraints are quite flimsy. On the other hand, this level of government has very few power resources available to it. In addition, the township governments bear very heavy responsibilities and there is a complete lack of balance between their powers and their mission. It is against this backdrop that some appalling events in rural society have evolved.

4.1.1. Integrated institution There is a formal division between party and government institutions at the township level, but in reality, both the party and government institutions are highly integrated. The degree of integration of township institutions is higher than in any other level of government. All township leaders we surveyed agreed that there is a division of work

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between the townships’ party committee and government. Party committees are the leading decision-making institutions and township party committee chairmen are in charge, while the governments focus more on taking responsibility for economic work. Work assignments are prepared by the party committees, but the division of work is non-systemic. The power relationship between a township party committee and a township government is likewise not a systemic one. Though the division of powers may be well defined and there is no mutual infringement, there may be mutual constraint. Township meetings demonstrate the integrated nature of the institutions. At all of the townships we surveyed, discussions and work assignments were done at joint party and government meetings, and the meetings were chaired by party secretaries. The party committee usually did not hold separate meetings, unless these concerned enroll- ments of new party members, organizational life, and other such matters. Nor did the township government hold separate meetings. Occasionally, a township mayor held a work meeting, mainly to discuss the implementation of specific items of work set by the party secretary. In everyday operations, the township party institutions and government institutions constitute an integrated whole. The concept of “central work” (zhongxin gongzuo) permeates all township government work assignments. It refers to tasks set in a unified manner by the party committee, as opposed to the vocational work of the “offices”, “stations”, “bureaus”, “centers”, and other departments. The personnel of specific departments have their own vocational work in terms of functional setups. The vocational work of personnel at agricultural extension stations, for example, is agricultural extension. “Central work” is determined in a unified manner by the party committees. For example, in spring, the central work may be family planning, and virtually all personnel go down to villages to engage in family planning. In autumn, the central work is tax levying, and all personnel are sent to the villages to conduct door-to-door collection of cash and grains. Or, sometimes dealing with Falun Gong becomes the central work, while “the elimination and investigation of unstable factors” is the central work just before the advent of “sensitive

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periods”. The term “sensitive period” is a commonly used concept among grassroots cadres, and refers, for instance, to National Day holidays, or the “two congresses” periods in Beijing, or times when VIPs come on inspections. There are also periods unique to each locality, such as religious holidays and so forth. In sum, sensitive periods are times when problems should be prevented. When deploying personnel, party and government institutions make no distinction between one another. For example, all townships institute an “office” as a comprehensive department and call it the “party and government office”. A clear distinction between party and government posts exists only at the leadership level; in all other respects it is difficult to tell the difference between personnel belonging to the party committee system and those belonging to the government system. Hence, during our township survey, we frequently came across cadres who describe their jobs as doing “whatever work the leadership assigns to me”. All the township leaders we interviewed emphasized that division of party and government powers could not be carried out at the township level. Most believed that such a division would result in rivalry. Two of the township leaders even proposed that the townships could merge the functions of party and government; the two could take on each other’s duties, and there would be no need for two teams of personnel. This would help in streamlining the township institutions and further unify their actions.

4.1.2. Centralized power system Consistent with the integrated institutions, the township governments also have a unitary power system, which is centralized leadership by the party secretary. All the highest powers of decision-making and command are vested directly in the township party secretaries, including those related to personnel, property, and materials, or to party, political, and financial affairs. But township party secretaries do not have the power to appoint cadres at and above the rank of deputy section (ke) chief. The power to appoint persons to deputy positions and higher in the townships rests with the standing committees of county

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party committees. The township party committees do not have the power to assign working personnel outside the limits of their own townships. Nor may they decide on transferring working personnel from outside their townships into their townships or on transferring their township’s personnel out of the township. Such deployment powers are vested in county-level organizational departments or personnel departments. However, within the townships’ domains, the party secretaries may directly decide the division of work for all internal personnel and directly decide the work assignments for middle- ranking personnel in the townships. Usually, party secretaries can directly influence the transfer and promotion of all township personnel at and above the intermediate level. Their recommendations often play a crucial role when higher-level departments want to use cadres from certain townships. Since the townships’ personnel have less opportunity to come in contact with higher-ups, the higher-level departments place much reliance on the party secretaries’ evaluations. Party secretaries have direct leadership over the township heads. Realistically speaking, township heads are merely the party secretaries’ number one assistants. Township heads possess only those powers that are conferred on them by the party secretaries. In terms of system design, the party secretary and township head are both “first-in- commands”, but in actuality there is only one “first-in-command” — the party secretary. A township party secretary said: “If the township head sees the party secretary as the first-in-command, he himself may become a first-in-command, but if he does not see the party secretary as the first-in-command, he will never become a first-in- command.” Township cadres themselves call the party secretary “the boss”. Indeed, in a township the party secretary is like a chairman of the board of directors who concurrently holds the post of general manager. The situation is somewhat different at the county level. A county mayor has no direct power over people, but he has clear powers over matters and money and may make his own decisions on financial expenditures, unless the project is very large. In contrast, if a township head gets along well with the party secretary, he may have a certain amount of real power, but if they get along poorly, the township head may not have any power at all.

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Finances are the core activity of government operations, and in terms of township fiscal administration, the highest power is also vested in the party secretary. Among the townships we investigated, there were four variations in procedures for examining, approving, and signing for township financial matters. In the first situation, the party secretary signs the township financial matters. In the second situation, the township head signs. In the third, the township head signs for limited amounts; for example, for amounts under RMB500 the township head may sign, while amounts over that require the signature of the party secretary. In the fourth, the party secretary and the township head share signing powers, generally with the party secretary signing approval for extra-budgetary funds and the township head signing approval for intra-budgetary funds. Where the township head signs approvals, the party secretary’s decision is also required for important expenditures, and the township head regularly reports to the party secretary on the expenditures’ circumstance. Most important is the fact that the assignment of powers to examine, approve, and sign is determined by the party secretary and is not stipulated by the system.

4.1.3. Internal units 4.1.3.1. “Half a chessboard” (ban pan huo qi) The many departments that make up a township government fall mainly under two categories. The first consists of the township government’s internal units, including various offices, stations, bureaus, centers, out of which each township has anywhere between 20 and 30. These departments, which are directly administered by the township government, are called “internal units”. The other category consists of institutions stationed in the township by higher-level departments. These come under the general designation “vertical agencies” (chuizhi danwei), and include public security substations, industrial and commercial administration offices, taxation offices, and land offices. The township determines work assignments for the internal institutions. For example, the party committee may directly decide on

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which person to assign to which station or bureau, which person to put in the post of station chief or bureau chief, and so forth. The assignment procedures are neither strict nor, in many localities, standardized. Sometimes the party committee issues a document, at other times a verbal announcement suffices, and usually the organizational and personnel departments of counties and prefectures merely put such matters on file and do not require examination and approval. The township also has the right to determine the salaries and benefits of the personnel in these institutions. However, the township has no power over the movements of personnel outside the township. Decisions on personnel transferred out of the township, or on personnel transferred into the township from outside, are made by higher-level organizational and personnel departments, and the township may only give suggestions. Usually, the power to transfer and deploy personnel at or above the deputy chief level in the administrative and vocational staffing systems is vested in the organizational departments of counties and prefectures, and that of transferring and deploying personnel in the labor and logistics staffing system is vested in the labor bureaus of counties and prefectures. A township leader is powerless to dismiss or transfer away a worker within the township, no matter how unsatisfactory that worker may be; all he can do is suggest to higher-level organizational or personnel departments that the person be transferred. If the higher-level departments disagree, the only recourse is to “cold-shoulder” the person. There are, among our case studies, many examples of a party committee secretary “cold-shouldering” a certain person, and also of a deputy township head or even a township head being “cold-shouldered” by not being assigned any specific job or any real power. A party secretary said: “I do not have any personnel powers. I can only request that a person be transferred away, and if the higher-ups refuse to do that for me, I can only ‘hang’ that person up.” Similarly, without higher-level support there is nothing a township leader can do if he takes a fancy to a person who is not of his township and wants to transfer that person in. There is also nothing a township leader can do if the higher-ups forcibly assign him someone he does not want. It is evident, therefore, that the township governments are only

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vested with half the powers over personnel in the internal units, which is why it is called “half a chessboard”. Since the power to engage personnel within the staffing system is subject to systemic constraints, many township leaders engage working personnel outside the staffing system. Many such workers are quite capable and obedient, work harder than persons in the staffing systems, and are regarded as reliable by township leaders. There are also those who become township personnel on account of special relationships with township leaders. The work performance of these people is less satisfactory, but they manage to muddle along because of the support of township leaders.

4.1.4. Vertical agencies 4.1.4.1. “A lost game” (yi pan si qi) For the townships, vertical agencies are considered as places “beyond the reach of the law”. These agencies bear such names as “The Such- and-Such Office of Such-and-Such Township” and exercise functions that pertain to the range of functions of grassroots governments, but in reality they and the township are merely neighbors. The township government may “get along” with but not “manage” them. Township governments cannot intervene in the appointment or transfers of vertical-agency personnel. The townships are not officially authorized even to offer suggestions. Any influence that can be exerted varies from person to person, and depends on the relationships between the township leaders and the higher leaders of those agencies. Some local governments adopt special measures in order to cultivate close relationships with such agencies, by appointing the head of the police substation to the position of deputy secretary of the township party committee, for example. This practice secures the cooperation of the substation for township government work and gives the chief of the police substation the rank of deputy section (ke) chief — a satisfactory arrangement for both parties. The vertical agencies are also independent financially. Townships do not pay salaries to such agencies. The funding channels within the

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vertical departments vary. For instance, the expenses of industrial and commercial administration offices are directly managed by the industrial and commercial bureaus of counties and prefectures by a variety of methods. At public security substations, prefectural public security bureaus are usually responsible for paying personnel salaries; some are given part of their administrative expenses, and some are not given any funds at all for case investigations. There are two main channels for obtaining administrative expenses at these substations. One consists of monies obtained through fines and confiscations, and the other consists of subsidies from township governments. There are also different ways by which township governments support the substations with necessary funds. Sometimes these are direct contributions of cash; at other times a motor vehicle is given, or direct payments are made to the salaries of temporary personnel engaged by the substations. These financial contributions may be open or covert, and big or small, but all are non-systemic. In terms of work, relationships between township governments and these vertical agencies are extremely complex. The vertical institutions undertake important aspects of public administration and frequently maintain close relationships to grassroots government. In the view of the central government, the fact that these are vertically administered departments strengthens macro-administration and prevents inappropriate behavior by grassroots governments. Grassroots governments, however, feel that they are forced to depend upon departments that have no right to manage. This relationship places township leaders in a quandary. For example, township governments make plans for village and township construction, but there are times when the land bureaus may disregard their plans when reviewing and approving zoning changes. The land bureaus are vertically administered, so the township governments have no authority over them and must rely on negotiations to achieve unanimity, but the results of negotiations can go either way. A tax bureau levies taxes within the township where it is situated, but higher-level governments aim the assessments of local tax collection at the township government. Non- fulfillment of the tax-collection task imperils the “record of political achievement” of the township’s leader. Yet the tax bureau, which is

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vertically administered, has the final say in how much tax money it levies. In order to fulfill the township’s tax-levying tasks, the township leader must “request” that they help fulfill the “task”. A similar situation exists with the public security substation. A township party secretary told us: Two villagers got into a dispute, and one of them beat and seriously injured the other. Medical costs reached tens of thousands of yuan, and the substation detained the injurer after the case was reported. However, it released the person after it had collected a fine of RMB5,000. The wife of the injured man then began to petition progressively higher levels and the township leader was constantly criticized in circulars issued by the higher- ups, since petitions are a major issue during assessments. With a helpless and aggrieved expression the township party secretary then stated: “The man was set free by the substation, and the substation is managed from above, but the petitions are put on my account. What am I to do?” More and more departments are being put under vertical management, leading to four types of complaints by grassroots leaders. First, this type of management shows that grassroots governments are not trusted. In fact, matters that are poorly handled at the local level are just as poorly handled after being “verticalized”. The central issue is not who manages the departments, but the system itself. Second, “verticalizing” management involves higher-level governments vying with grassroots governments for benefits. The departments “marked upward” are those with power and money. Those left to the grassroots are all poor and troublesome. One grassroots leader said: “As far as importance goes, the Falun Gong problem is very important, and the Letters and Petitions departments are very important, so why are not these ‘marked up’ and ‘verticalized’?” Third, vertical management has created a split of interests among government departments. All are government personnel, but there is a very big gap in terms of salaries, income, and benefits between vertical agencies and local departments. This creates contradictions among government personnel. Finally, vertical management has dismembered the powers of grassroots governments. Vertical agencies and internal units have become two different setups in terms of operations, and the township

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governments regarded the vertical agency as a “lost game” that they cannot influence. The opinions of these grassroots cadres about vertical management are somewhat extreme, but they deserve attention.

4.1.4.2. Conclusion Townships are entities of government, the overall power structures of which are incomplete, but the internal powers of which are highly centralized. Township governments lack self-determined management over the personnel of their internal units, and vertical agencies have dug away much of the real contents of township government administration. Hence, as systemic power structures, township governments are quite weak. One township party secretary said: “Township governments are in fact false governments! Anything that has power, that is able to enforce laws, or brings any benefits has been placed under direct management from above.” However, under this framework, the administrative system has imposed extremely heavy responsibilities on the township governments, including everything from the levying of taxes to speeding up economic development, from attracting foreign investment to increasing peasant incomes, from family planning to social stability, and even to writing slogans and hanging up placards in every village — all of which are assessed according to specific and fixed regulations. The higher-ups are able to impose these tasks on the townships because they have deprived the township leaders of all their powers. Not a few township party secretaries complained bitterly that the townships may not cite difficulties, whatever the tasks assigned from above. They can never say “no”. County leaders easily say: “Can you do the work or not? If not, say so! There are others who are willing!” Under heavy pressure, township leaders must do their utmost to carry out these missions. And so, their centralized powers are used to pressure their underlings to complete the mission even if it means deploying undesirable forces in society. What can be carried out is carried out, and what can be faked is faked. What can neither be carried out nor faked is done by illegal means. The township governments may have few powers, but they have a great many workers, and the principal

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leaders exercise highly centralized power, with little supervision from above or constraint from below. Once missions are carried out in disregard of rules and regulations, lawlessness comes into its own. We maintain that although many of the transgressions committed by township cadres may be attributed to cadre quality, as a whole one should first criticize the system of government. Behind the constant increases of personnel we can clearly see the flaws in township government and the fragility of the system. The gap between the higher levels’ weighty requirements and the townships’ real functions is getting bigger, and the distance between the peasants’ needs and the townships pursuits is becoming wider. We believe that since the townships’ own power systems are basically already in a state of suspension, one might consider doing away with the townships governments entirely.

4.2. Accountability System of Township Governments Chinese governance involves a vast web of audits that become more rigorous as one moves down the hierarchy. At the provincial level, general inspections prevail, while at the prefectural level there are requirements for the fulfillment of development targets. Below the prefectural level, however, a detailed, quantified (shu zi hua de) system of assessment has taken shape. There are not only targets for economic and social development at the county level, but performances in all items of work are converted into points, and calculations are conducted to rank different counties. Below the county level, the method of assessment goes into further detail. Every aspect of township work as well as that of sections and bureaus under direct county jurisdiction is quantitatively evaluated, with rewards and punishments directly related to these numeric evaluations. In townships, the audits become increasingly detailed and complicated. All departments, working personnel, and villages operate in the midst of this web of audits.

4.2.1. Accountability within counties and prefectures The enormous and complicated system of audits that confronts county leaders includes three types of targets. The first are economic

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development targets, including tax collection, increases in agricultural output, peasant income, the individual and private economic sector, and success in attracting outside investment (zhao shang yin zi). The second consists of targets for the construction of “spiritual civilization”, such as building up the legal system, social stability (petitions and Falun Gong), united front work, ideological construction, promoting civilized behavior, environmental protection, and gleaning subscriptions for newspapers and publications. The third consists of targets for party construction, such as organizational construction, building up party work style and clean government, democratic elections, propaganda work, ideology, and political awareness. At the end of each year, county authorities send down personnel to conduct inspections. This large contingent of inspectors, led by organizational departments with the participation of other relevant departments, inspects and assesses townships one by one. The township workers must fill in forms, which the inspectors then verify. In the counties, relevant departments organize personnel to pool and balance the data and draw up preliminary assessment results, which are then reported to the county standing committees for discussion. On the basis of the discussions, the townships’ work performance is ranked and decisions are made on awards, criticisms, and even “yellow card warnings”. Central to the system of audits is the “one-vote veto” (yi piao fou- jue). All 20 townships faced the one vote veto for family planning; 18 for administration of social law and order; four for fiscal income; three for party and clean government construction; one with regard to peasants’ burdens; one for petitions to higher levels and promoting civilized government; and one for protecting mountain land by prohibiting cattle grazing. The significance of the one vote veto is that if a single target among all those subject to assessment was not reached, the township in question was denied assessment as “advanced”, and the township party secretary could not obtain a promotion, no matter how well other items of work were completed. As a result, salaries and monetary awards were also affected. Most townships stated that the one vote veto put great pressure on the first in command (yi ba shou), and some pressure on the second in command and other township leaders. A few township party secretaries maintained that the one vote veto only put pressure on the first in command but not on any other cadres.

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All the townships stated that the one vote veto was effective and brought about advances in township work as a whole. However, problems were also evident. First, the one-vote veto made everyone feel insecure. Some felt that work had to be intensified to unrealistic levels in order to avoid being vetoed. There were frequent instances of compulsion and commandism, which gave rise to conflicts. Second, the one-vote veto encouraged fraud, trickery, and formalism (xingshi zhuyi). And third, the one vote veto did not give consideration to special circumstances and the effects of problems that were left over from the past. Since many problems arose from mistakes made by previous township leaders, it was unfair to blame current leaders when problems were eventually uncovered. The reason given for quantifying the audits was that assessment should be conducted in a scientific manner. In fact, it was fraught with malpractice. The contents of some work can be quantified, but because checking and verification are in many cases impossible after such quantification, everything turns into a game of numbers that can easily be manipulated and fabricated. For example, when the higher authorities’ assessment targets specify that every village must raise 20 cows for generation of milk, the townships can, without running any risk, fill in forms reporting that each village has raised 30 or even 40 cows. The contents of some work are impossible to quantify, but quantification is obligatory for audits and thus ridiculous situations result. Theoretical studies by leading township cadres are an important aspect of the audit. Quantification requires that they do six hours of self-study every week and write out 10,000 words of reading notes every six months. The way they cope with this is simple. A secretary is asked to write these out and send them up to the county. Everyone is aware of the deception, but all go about it with straight faces. Often, when county leaders make decisions on rewards and punishments based on these numbers, several assessment figures are over- turned by a single word.

4.2.2. Accountability within townships There are also whole sets of regulations on audits and incentives within the townships. There are two types of internal assessment

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methods used by the 20 townships. The first method is relatively simple and consists of assigning grades in terms of percentages to individuals or individual items of work at the end of the year and determining, which departments and personnel are excellent, standard, and substandard. Five townships used this method. The second method is more detailed and consists of a complete set of assessment procedures and methods of quantification. Such methods are used in the vast majority of townships. These complex audit systems fall into two further categories. In one category, audits are directed chiefly at work performance targets and focus on the results of completed work; the other kind of audit is even more detailed and assesses not only results, but also specific work procedures and even everyday conduct and behavior. Take, for example, the audits of township cadres who are responsible for an administrative village (bao cun ganbu). In the first instance, they are assessed on the completion of set tasks, such as the area of land dedicated to vegetables grown in large greenhouses, the number of individual businesses (geti hu) supported, or the number of workers with employment off farm. Points are awarded for every task completed. The second category assesses not only completed work targets, but also the number of days the cadre has stayed in the village, the number of villagers’ meetings they have attended, and how often they have shown up for work at the villages. Although the audit systems differ in their design, all township leaders felt that the audits have become increasingly elaborate in recent years. To give an example, a township in Shandong uses the following method: a 100-point system is implemented for the assessment of work objectives. Vocational work accounts for 40 points. There are specific requirements for each unit of work, and a corresponding number of points are deducted for failure to meet requirements. For example, six specific requirements are put forward for the work of the party and government office (dang zheng ban). Two points are deducted for each instance of the following: absenteeism; each error in transmitting information from the higher levels and vice versa; and each error of protocol in organizing meetings and receiving visitors. The family planning office puts forward six specific requirements. One is that point deductions during one year of vocational

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inspections and audits by the county should not exceed two points, and for every point in excess of this, two points are deducted; for every serious problem that is discovered during an inspection and that adversely affects the township and county authorities, 10 points are deducted; and where the adverse effects are grave, 20 points are deducted. Central work (zhongxin gongzuo)1 accounts for 20 points. Each time a person is absent without good cause from study activities, 0.5 points are deducted from their unit and one point is deducted from the individual. For each error committed by a unit during tax collections, preparations for investigations by higher levels, and other urgent matters, two points are deducted; and when an individual has caused the error, one point is deducted from the unit and two points are deducted from the individual. Units and individuals who make outstanding contributions to central work are awarded extra points within a 10-point limit. Health inspections account for 10 points. Appraisals account for 30 points and are based on the amount of points obtained during the year-end appraisals of all departments. Units commended or rewarded in the course of county-wide appraisals of units doing similar work are awarded an extra 10 points. The main punishments and rewards are:

(1) Audit results are linked with salaries. The monthly salaries of all personnel participating in audits include a monthly RMB100 “hazard salary” (fengxian gongzi), and for every point deducted as a result of year-end audits, 1% of the hazard salary is deducted. (2) Audit results constitute the main basis for working personnel being chosen for “advanced worker” titles, promotions, and citations for meritorious service.1 (3) Audit results constitute the formal preconditions for transferring, recommending, and promoting cadres to higher positions. (4) The five cadres ranked last in annual audits are subject to three months of out-of-job training during which they are issued a monthly living allowance of RMB200; they may return to work if they are deemed qualified after completing a period of training, otherwise they automatically lose their posts.

1 Interview Data: 2-10.

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(5) Area management heads and station heads who are ranked last by audits are issued yellow warning cards and are automatically dismissed if they are ranked last twice in succession.

The present audit and appraisal system was developed in the late 1980s and early 1990s. Previously, the methods used by counties and prefectures to assess township work and by townships to assess their own work personnel were relatively simple and basically consisted of ordinary audits and rewards for being “advanced”. During the 1990s, this set of methods reached “perfection”, exhausting the patience of both high- and low-ranking cadres and inflicting misery on those undergoing audit and appraisal. But the leaders of the townships we surveyed did not believe that the increasing rigor of the audit system would have done anything to improve enthusiasm among township cadres. Our interviews indicated that eight of the townships believed that there had been a drop in cadre enthusiasm; six believed there had been an increase; and six maintained there had been little change. Of the latter six, the township leaders stated that although there has not been much change in township cadre enthusiasm, the effectiveness of actual work had declined. The reasons cited by township leaders for the decline in morale were: tight township finances and inability to ensure salaries, bonuses, and other remunerations; large disparities between higher-level requirements and grassroots realities; unreasonable incentive mechanisms and excessive pressure created by the one- vote veto; the difficulties of rural work; serious corruption among local officials and lack of fairness in rewards, punishments, promotions, and transfers. Reasons given for increased morale included: higher economic remunerations; expanded personnel powers at the township level; higher awareness among the peasants; and greater competitive pressures.

4.2.3. Focus of the accountability system There are two basic goals of the townships’ accountability system. The first is to promote stability, the bottom line of which is absence of mass incidents and a limited number of petitions. The other is

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development, the bottom line of which is ensuring normal salary payments and governmental operation. The faster the pace of economic development, the better it is for the growth of the township. The two main development indicators are peasant incomes and government fiscal income, with more importance attached to government income. Figures for peasant income may be falsified, and many township leaders admitted: “Average per capita peasant income is as high as we say it is in our reports.” Nor is any importance attached to the rate of GDP increases. What really counts is fiscal income. Township leaders experience excruciating misery if the township governments have no money of their own: staff salaries cannot be paid, their cars lie idle, and their telephones do not ring. Hence, township concern for development is first and foremost focused on government revenue. Increased peasant income and increased government revenue are not always seen as mutually complementary. At times, township governments may hope that increases in peasants’ incomes will energize increases in government revenue. At other times, all that the township governments are interested in is increasing government revenue, for the sake of which they may not hesitate to extract what they can from the peasants. What township governments are most enthusiastic about is starting up projects. There are two main types of project. One is attracting outside investment to set up enterprises. Work in this respect occupies a salient position in the government’s level-by-level audits and in many localities is regarded as the task of primary importance. In this respect, prefectures set hard targets for the counties, and counties do the same for the townships. Some have even gone so far as to propose that one should “nominate heroes according to the amount of outside investment attracted”, “make seating arrangements according to the amount of outside investment attracted”, and “use cadres according to the amount of outside investment they attract”. At the semi- annual meetings to report on foreign investments attracted, many local authorities put those who have fulfilled quotas in the front rows and those who have failed to meet quotas at the back. Some assign tasks for attracting outside investors to each and every person in government, and those that fail to fulfill these tasks are “immediately

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relieved of their duties and assigned to attracting outside business and investments on a full-time basis”. Thus competition between regions for investment has become extreme. The attractions offered during this competition frequently have to do with land, and one often hears of businessmen being wooed by means of “zero land pricing” and “free gifts of workshops and land”. The price for this is, of course, borne by the peasants. Other projects are those that one wins from higher-level government departments. They consist mainly of projects for which the central government provides dedicated appropriations and direct investments. These include such projects as “grain for green”, water conservancy, and peasant vocational training projects. These all can be used to increase government income. If one obtains funds for peasant-training projects, one can first of all resolve the problem of office expenses in one’s own department; the subsidies for “grain for green” can be converted into peasants’ taxes and kept by the government, thus saving cadres the trouble of going door to door collecting fees. The importance of attracting outside investment and “contention and legwork” for winning higher-level government projects is becoming greater in audits. Where township leaders are concerned, higher-level praises, lower-level acknowledgments, and their own career prospects are all tied to these projects. Township governments also attach great importance for promoting adjustments in the agricultural structure, such as increasing cash crops and expanding animal husbandry as they can enhance their revenue on the back of increased peasant incomes. However, there have been many painful lessons of late: products cultivated by the peasants with township encouragement find no markets, triggering peasant revolts and making it impossible to collect taxes that ought to be paid. Therefore, township governments are increasingly cautious in this respect now, which is a welcome change.

4.2.4. Individuals in the accountability system All accountability and incentive systems must act upon the individuals. Although township governments face the same system, incentives

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and targets are different for staff working in different positions. The problem of staff morale should (in theory) be addressed by the accountability system at the township level.

Township party secretaries. For them, the incentive system offers three possibilities. First, a small minority can rise to positions in county-level leading groups, but competition is fierce. Second, the majority will be appointed as bureau heads or directors of committee offices in the counties. These appointments do not involve promotions in rank, but competition for them is also quite fierce because there are substantial differences in the status of various departments within the same county. Some bureaus have money and power and are full of activity. Other bureaus have little power and are moribund. A township party secretary in his forties who goes to the county usually leaves his post at the age of 51 or 52. It is quite likely he will have no more opportunities to change positions, so people often call moving from the township to a county section or bureau “going into retirement”. It is natural that many township party committee secretaries do their utmost to get the best possible “retirement” unit. In an inferior bureau they will have no opportunity to enrich themselves, and in their own words: “When a bureau is so poor it cannot afford to give gifts or dinners, it is very difficult to cultivate good relationships either with other units or with one’s superiors.” Worse yet are assignments to the position of secretary of a county-level department or vice-director of a bureau obviously falling short of being appointed bureau chief. In a county section or bureau, the bureau chief is the first-in-command and his position is equivalent to that of the secretary of a township party committee. In bureaus, the powers of a secretary depend on the secretary’s relationship with the bureau chief. These three destinies face a township party secretary from the moment he assumes his post, and serve as the hub of his considerations concerning his personal fortunes. From the perspective of the county party committee, it is bargaining chips like these that enable them to motivate township party secretaries.

Other township leaders. Township heads face two paths. The majority of them may be promoted to the position of township party secretary.

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If not, they generally return to the county government where they become deputy chiefs or perhaps secretaries of bureaus. A minority of township leaders in deputy positions may, if they fail to acquire leading positions, return to the county government to take up deputy- deputy positions (fu fu zhi) in sections or bureaus, or become mid-level cadres among mid-level cadres (zhong ceng zhong ceng ganbu). The rest work in the township government until they retire. In townships, deputy-ranked leaders (deputy township heads or deputy party secretaries) 40 or more years of age are typically in a “evening-of-life” frame of mind and say self-mockingly: “We are too old for promotion, too young to stop working, but just right for mahjong and drinking.” Because of their age, promotion is unlikely, and because of their low position and rank, going to live in the county seat is also out of reach. At this time, virtually all incentives in the system lose their effectiveness. Thus the standard of their work basically depends on personal motivation, and in their own words: “I work as my conscience dictates.”

Ordinary township personnel. There are actually two parts to this group of persons. The first part consists of mid-level cadres, that is, chiefs of bureaus (suo) and chief of stations or directors of centers, who pertain to the section level (gu ji) but are not in leading positions recognized by departments of the institutional staffing system. The chiefs of sections (gu), bureaus (suo), and stations (zhan) are the mainstays of the township and the leaders rely on them to complete various tasks. A few of them may be promoted to the townships’ leading groups. The other part consists of ordinary township staff. A few of these people set higher goals for themselves in their work, but the majority are “loose and slack”, dreaming neither of becoming officials nor of moving to the county seat. They feel they have nothing to look forward to, despite this fact they cannot leave the township government because it provides them with social status and remuneration. So a variety of life choices are possible. If asked, they will go and work in a village, but they will usually be invisible in the villages and are incapable of performing any real work. If asked, they will carry out urgent work, but in the long run they will loiter around and become

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“vagrants” in the grassroots government. Even more of them will simply treat their work as township cadres as a “casual job”, to be done in their spare time, and more often than not will be farming or engaging in other work.

4.2.4.1. Conclusion Township governments are grassroots institutions that work directly for the peasants. Logically, the accountability systems should give prominence to peasant participation and supervision and manifest the peasants’ role in the accountability of grassroots government. However, the current system of township accountability gives expression mainly to the constraints and requirements placed on grassroots governments by governments at higher levels and consists of closed operations in a top-down system of government. The peasant masses — the subjects of grassroots government services — are reduced to being mere onlookers, if even that. Clearly, this accountability process lacks social participation, and its orientation departs from normal requirements. Hence, we call this sort of accountability system “inverse accountability”. The result of operations by such an accountability system is that townships work for the sake of audits, and much of the governments’ work bears no relation to rural development. One might say that grassroots governments and the peasants independently go about their own business. Of course, the original intent of the audits’ design was to serve rural development, but in practice, it does not. Sometimes it has occasioned actual work; but much of it consists of chasing one’s tail and is unrelated to the peasants’ needs. There are also times when the work done during the audits causes harm to normal rural development. Some rural cadres state flatly that their job is “annoying people”. In a market economy, such a huge and intricate system of internal governmental audits is inappropriate. The objective of grassroots governments should be to provide public goods, but at present they concentrate on providing higher-level governments with one good: audits. One may state that the accountability system is divorced both from the multiple needs of society and from the needs of the peasants;

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it is a government-operated process with no inherent relationship to rural development. Even compared with the incentives system of the people’s commune era, the system is in many respects inferior. One county party secretary acknowledged: “Today government administration is even more of a planned economy than the planned economy.” Yet this apparently powerful and rigorous system of administration is weak when it comes to standardizing the conduct of government work personnel. In terms of the effects of this accountability system on the individual it only provides ample incentives for those seeking promotion, but is incapable of providing incentives for persons with no realistic chance of being promoted. If a government worker has already lost all expectations of being promoted, there should be a systemic design ensuring that he continues to work diligently, and if he fails to do so there should be specific pressures. In certain situations there should be a mechanism for dismissal, but there is at present no such mechanism in the township accountability system. We saw, in governments both at the county and township levels, there are many who had given up all hope of promotion and felt they were justified in idling around and displaying no initiative In such cases, even audits could do nothing. Among them are ordinary staff and not a few township and county leaders. Resolving this problem by systemic means is a fundamental requirement for effective governance.

4.3. Incentive Structures Compared with the incentive structures for corporations, the incentive structures for governments can be more complicated and have concerned many countries in the world. Seen from my study visits to the US and Europe, there are a lot more ways to evaluate program management than to personnel. The issue is even more complicated in China. In many Western governments, there is a clear division of labor between politicians and bureaucrats and thus the incentive structures would be different. For example, politicians are evaluated and motivated through elections. In China, political work and bureaucratic work highly overlap, which makes it very difficult to

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manage government staff. Therefore, the issue of government management is worth a serious study in order to establish rules for separation of politicians and bureaucrats and set up different incentive structures.

4.3.1. Dual dislocation According to my research, the power structure and accountability mechanisms are both misplaced in township governments. The two misplacements do not happen simultaneously but there exists a causal link between the two. The misplacement of the accountability mechanism (otherwise known as “reversed accountability”) is based on the misplacement of the power structure. Therefore, there needs to be an integration of government incentive structures. Seen from the power structure, the overall power of township governments is scarce but, within the governments, power is highly centralized. Party committees and governments are integrated into a single governing body where party secretaries hold centralized authority. Township governments lack autonomous power over personnel management. The existence of positions subject to vertical management further hollows out the township government management. Overall, township governments are weak if one looks at their internal power structure. Some township party secretaries sighed: “Township governments are fake governments. The issues laid with management authority, enforcement power and rewards, are all taken by the upper-level authorities.”2 At the same time, the top–down administrative system assigns extremely heavy workload to township governments, such as tax collection, keeping economic growth, attracting investments, increasing farmers’ income, enforcing the one-child policy, and maintaining social stability. There are even specific and solid evaluation rules regarding the number of banners and boards to be put in villages. The reason why upper-level authorities are able to delegate so many tasks to township governments is that they control the appointment of top township officials. Many

2 Interview Data: 2–17.

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township cadres complained that, whatever tasks assigned by county governments, township cadres cannot frown or say no. Otherwise the county government leaders would say: “Can you do it or not? Let me know if you cannot. Many people are willing to do it.” Under the heavy pressure, township cadres would spare no efforts to carry out the tasks. Since power is centralized in a few persons in township governments, they would pass along the pressure to all staff and even use local vulgar forces. If a task can be accomplished, then accomplish it. If not, then fake a result. If a task cannot be accomplished or a result cannot be faked, then one would have to violate laws and regulations. Though township governments have limited authority, they have many staff, and power is highly centralized. Supervision from above and accountability from below are both weak. Thus the unrestricted power may become out of control. While some irresponsible behavior of township staff may be attributed to their personal qualities, overall it is the government system that leads to the behavior. There is a growing gap between heavy demands from the above and real functions of township governments. The distance is longer between the demands of farmers and the goals of township governments. The main problem with the accountability system for township governments is that, despite a strong force that holds township cadres accountable, the direction of accountability is wrong. Township governments live in a grand and strict evaluation system. They are evaluated by upper-level authorities. And they evaluate their staff and village cadres. As a top–down process, the evaluation is separate from the demands of society and the participation by farmers. As a result, township governments are mainly working for the evaluation. A great part of their work has nothing to do with rural development. As a level of grassroots government, townships are supposed to serve farmers, and thus the accountability system needs to highlight farmers’ participation and power to hold local cadres accountable. But the current top–down accountability system operates within the government, while the people that the government is supposed to serve become onlookers, or they do not even have a chance to look on. Obviously, the accountability system lacks societal participation

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and is against normal demands of the people. We call the system “reversed accountability”. The result of this system is that township governments and farmers are separate. Despite the initial intention to better serve the rural development, the current accountability system cannot achieve the goal. Sometimes the huge amount of work done by township cadres has nothing to do with farmers. At other times their work is even harmful to rural development. Some township cadres are straightforward by referring their work as “disturbing the people”. Obviously, the sophisticated and large evaluation system is not applicable to the reality. The main goal of grassroots governments is to provide public goods, but now they are up to providing the “evaluation goods”. Basically, the accountability arrangement is separate from the social demands and farmers’ demands, and is a government operation process that has no internal connections with rural development. Compared to the incentive system in the time of people’s communes, the current system is not “advancing with the times”, but is backward. One county party secretary said: “The current government management is more “command” than “command economy”.3 However, even the seemingly powerful and strict management system is too weak to regulate cadre behavior. In terms of the influence of the accountability system on individuals, the system offers incentives only via promotion. For those that have no chance of being promoted, the system offers nothing. For a government staff whose chance of promotion is gone, there needs to be an institutional arrangement to ensure that he fulfills the responsibilities or face accountability pressure. Under certain circumstances there needs to be an exit mechanism, but such a mechanism is not available. From my research, those township cadres who have no chance of being promoted anymore, deal with their work perfunctorily, with their mind at ease. The evaluation system cannot do anything about them. Some are ordinary staff, and others are township and county leaders. The institutional problem needs to be addressed in order to ensure government vitality.

3 Interview Data: 2-18.

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4.3.2. Substitution of goals Target substitution is an organization management concept that refers to a set target replaced by another one in the process of organization operation. Due to interactive influences of the power structure and accountability system, there must be target substitution at the grassroots governments. The replacement of organizational targets in the process of organizational operations apparently is due to the problems with the organization system. The public institutions at the township level replace public goals with self-interest goals, and work for themselves instead of the public. In the fields that involve more public interests, the more negative results are entailed by target substitution. Take public security management as an example. Because local public security bureaus depend on fines to support their operational costs and even salaries, they would take a “hit and protect” strategy when it comes to the “sweeping pornography and hitting illegal publications” (saohuang dafei) campaign. On the one hand, they penalize the violators through fines. But on the other hand, they would make sure that the illegal activities are not completely eliminated in order to sustain their incomes through penalties. Another example is the one-child policy. Since bureaucrats who enforce the one-child policy depend on penalties (known as “social support fees”) to cover their costs, they would penalize those who violate the law, but keep the sustainability of penalties by allowing a certain number of violation cases. During my research, I came across a case where a young couple went to the Office of Family Planning to request a refund because their baby was accidently aborted but they already paid the penalty. The answer given by the office staff was: give another baby and we will keep the penalty. Similarly, the example of land management shows that, the main sources of income for many land management bureaus in township governments rely on fees collected from farmers who need to build houses. One township magistrate mentioned that, if less than 150 households build houses in a year, the township land management bureau cannot even pay full salaries to their staff. It would not be hard to imagine that, the target of controlling land loss due to house building may easily be replaced by the

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target of encouraging house building in order to increase bureau incomes. The process of target substitution implies that the grassroots governments are becoming conflict makers, and are growing with a predatory nature toward the rural society. The disintegration of social structure may engender various social systems, actors, institutions, and norms and values. These different elements may further produce unique internal rules and external relations, which entails autonomy and professionalism, and needs a new integration status. Professionalized government organs are a result of modern social disintegration. As a social actor, professionalized bureaucrats see their values, norms and behavior patterns influenced by an incentive structure. Ordinary staff positions in township governments do not have designated job descriptions. As a subordinate, the staff are often commanded by township leaders to accomplish certain jobs. Faced with important job assignments from the above, often it is only the main leaders that are anxious. Others simply respond in a perfunctory manner. The situation is a result of the incomplete accountability system in the grassroots governments, and is a cause of poor work efficiency.

4.3.3. Political control of the government The accountability problem is not due to township governments themselves but rather a government systemic problem. It reflects a problem with inter-governmental relations and an issue of political control of the grassroots governments. The problem with township accountability shows that there needs to be a transition, a political transition, of the relations between township governments and upper-level governments. The economic decentralization has brought great economic development. But scholars are divided on the basis of what economic reforms have brought to politics. My research on township government reforms finds that, despite decentralization and its positive effects on economic development, government reforms are yet to be successful. A balance of power between the center and local governments has yet to be established. More research needs to be done to examine possible options such as holding on to the economic decentralization

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and political centralization, going back to economic and political centralization, or decentralizing administrative power to complement the economic decentralization. It has been agreed that decentralization can drive economic development but may empower local governments to the extent that it become an opposite political power. It is a dilemma: decentralization for growth may lead to destabilizing factors to the political system. I believe that the way out is to continue the political decentralization. As some scholars have noted, an upper-level government with centralized power cannot easily push forward policies because policy implementation by local governments can be selective (O’Brien and Li, 1999). Others contend that political centralization is necessary. The recent research by Pierre F. Landry attempts to dis- cover how authoritarianism and decentralization are mixed together. In other words, how is political control sustained under the condition of economic decentralization? He argues that the cadre management system is not only a necessity for the party to exert absolute control over the bureaucratic system, but also an institutional channel through which the party keeps daily political authority. Therefore, in post-Mao era, there is a strong state capable of pushing forward deepened reforms. Political decay is on the surface and limited to certain areas, and will not lead to political systemic change. His alternative explanation to stability is that, in the time of economic disparity, keeping control of the cadre nomenclature is an important reason for political stability (Landry, 2008). As I have observed, the reason why higher- level authorities are able to command lower-level governments is that they control the appointment power. In other words, upper-level leaders are the sources of positions and power for the grassroots leaders. According to Pierre Landry, this is an effective way to exert political control on local governments. He defines “political control” as control of behavior choices of local policy makers through rules and institutions. The ultimate measure of political control is whether local policies are in line with the central policies. It needs to be pointed that, although Landry’s research demonstrates the core function of the organization and personnel system in maintaining the top–down centralized power system, his observation seems to touch upon the surface only. My research finds that the

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political control over the grassroots governments is very problematic in fact. The problem is that, the grassroots governments are responsible to the upper-level authorities only but not to the people, which leads to organized lies and fake work in daily operations. Control through cadre appointment may not mean effective management. Over-reliance on the cadre appointment system is a mistaken direction in handling the central–local relations, and is a source of conflicts between the center and the local. The effect of using cadre appointment to control local governments is very limited and may further wear out the authority of upper-level governments or the center. Despite centralization, the central authority is rather weak, meaning that centralized power does not guarantee that the power will be followed. The situation is hard to sustain, and even if it sustains, the grassroots governments must be stuck, not capable of making innovations. The way out is to speed up the political power decentralization between different administrative levels, while holding up to the economic decentralization. First, institutionalized inter-governmental power division needs to be carried out. The upper-level governments should feel free to exert “vertical management” to lower-level governments, meaning that they should take back power or give power at their will. The inter-governmental relations need to be written into the law. Upper-level and lower-level governments are equal before the law. The loci of power need to be clear, and any arbitrary takeover of power is illegal. Second, with institutionalized power division, the accountability system by the people needs to be strengthened. In other words, there needs to be institutionalized democracy. For example, under the condition of institutionalized democracy, the size and organizational setup of the grassroots governments would be determined by the constituents through procedures, not by upper- level authorities. Without the guarantee of democracy, the grassroots governments are not held accountable by either the higher-ups or by the people, and may turn into “vassals” that can do whatever they want. So, in order to solve the organization system problem of the grassroots governments, we need to change the model of political control in order to achieve a complete transformation of relations between the grassroots governments and upper-level governments.

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Control Systems

5.1. Obligatory Interactions in the Affairs of Township Government Township officials have difficulty in coping with the seemingly endless flow of meetings, documents, briefings, receptions, and inspections. If these various kinds of work are lumped together under the heading “obligatory interactions” (ying chou), then such interactions form a significant part of township government life. This chapter describes these obligations.

5.1.1. A sea of meetings Attending meetings convened by the county authorities is a basic activity of township cadres. Meetings are conduits for receiving tasks and reporting on work. According to our research, the leading township cadres attend about 60 meetings convened by county authorities each year, or one or two every week. Those with the fewest meetings attend 30 per year, or more than two per month. Those with the most meetings attend 80 per year, or six or seven per month. The great majority of the meetings last half a day. It would appear that the scheduling of meetings has first of all to do with work cycles, such as

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making arrangements at the beginning of the year and reporting at the end of the year, and secondarily with special work tasks. A township party secretary remarked: “I often go to meetings in the county town. There are too many meetings — big meetings, small meetings, long meetings, short meetings, at least four or five times a month, sometimes on Sundays, sometimes at night. Sometimes a meeting concludes one day only to be followed by one the next. There are many kinds of meetings — organizational meetings, meetings on politics and law, on basic construction, on industry, agriculture, water conservancy, on building cement roads, spur-of-the moment meetings, meetings to prepare for inspections… every imagi- nable kind of meeting.” Sometimes different leaders on the county committees hold meetings simultaneously and all demand that the heads of townships attend. Some township party secretaries complain that although the newspapers and television always say that the number of meetings should be cut down, it does not seem that this has had any effect. In addition to participating in meetings convened by the higher authorities, townships also convene meetings of village cadres. But the number of meetings of village cadres convened by the townships themselves has obviously decreased. The main reason is that calling such meetings has become more difficult, as a substantial proportion of village cadres are reluctant to participate in meetings. The number of meetings of principal village cadres convened by the townships does not exceed 20 per year, and may be as few as 10. To reduce meetings, village cadres are assigned the task of transmitting and distributing documents. The meetings held in an economically developed suburban township in Zhejiang are relatively few. Meeting records show that 14 cadres’ meetings were held in the township in 2003, 12 of which were attended by village party secretaries and 10 by village heads. The rest were attended by other cadres in the villages. Three of these meetings concerned periodic work summaries, two birth control, two social order and security, two relocations related to land requisitions, one training for village heads, one village-run enterprises, one the construction of primary schools, one rural minimum livelihood

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guarantees (di bao), and one was a year-end greetings-and-solicitude meeting.

5.1.2. A mountain of documents Townships receive between 300 and 500 kinds of documents per year. These documents come mostly from county departments, while a small number come from prefectural- or provincial-level departments. For instance, in 2003, a township in Hebei province received 470 kinds of documents from above, 451 of which came from the county level, 12 from the prefectural level, and seven from the provincial level. More than half of the documents from the county level contained assignments for work tasks. While receiving tasks assigned to them by means of documents, the townships also sent large numbers of documents down to the villages. By and large, each township sent down about 100 kinds of documents per year. A survey we conducted in a township in Zhejiang province shows that the township sent down 180 documents in the year 2003. According to content, these documents may be divided into three major categories. The first category consists of documents of a macro-guidance nature — those that put forward overall requirements for the year’s work and defined objectives and tasks. There were 90 of these. Examples are: “Policy Opinions on Promoting Industrial and Economic Development in Our Township”, in which specific ways for assessing awards for “catch-up-and-surpass” industrial and economic development in each village are described, and “The Acceleration of Rural Industrialization and Infrastructure Construction”, in which an RMB300-per-mu subsidy was stipulated for newly built farm that produces greenhouses extending over 20 mu. There were also documents like the township’s “Main Points for Propaganda Work in 2003”, “Family Planning Work in 2003”, “Civil Administration Work in 2003”, and “Cultural and Sports Work in 2003”. In addition, there were documents providing guidance for important last- moment matters, such as “Conducting ‘Party Establishment Month’ and ‘Double Solicitation and Assessment’ Activities in

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Grassroots Party Organizations Throughout the Township”, “Carrying Out the Accounting Proxy System in the Establishment of Village-level Financial Accounting Centers”, “Further Intensifying Villagers’ Self-Governance in Family Planning and Carrying Forward Reforms Related to Community Population and Family Planning”, “Standardizing the Out-sourcing of Work on Small Below-quota Construction Projects”, and so forth. The second category consists of task-assigning documents. There were 71 of these. Examples are: “Doing a Proper Job of the Work of Soliciting Subscriptions for Party Newspapers and Party Publication in the Year 2003”, specifically prescribing the number of subscriptions solicited for newspapers and publications in each village and the time limit for completing this task; “The Establishment of Township Government Leading Groups for Correspondence and Petitions Work”, explicitly requiring that each village set up a leading group headed by the party secretary, with other leading cadres serving as deputy group heads and as special cadres for handling letters and petitions [from persons voicing grievances]; “Taking Specific Responsibilities in Poverty Alleviation”, making specific arrangements of peasant households with which government functionaries would form “assistance bonds”; “Setting Up Township Government Leading Groups for National Health”, requiring that all villages set up the corresponding leading groups and report on the matter to the township governments’ cultural and sports centers; “Protecting the Land Contracting Rights and Interests of Rural Women and Higher and Secondary Polytechnic School Students”, and so forth. The third category consisted of documents regarding cadre management. These documents detail regulations on requirements, com- petence training, assessment criteria, and wages and benefits for village-level leaders. There were 19 of these. Examples are: the township’s “Conscientiously Carrying Out Term-Expiry Re-elections of Village-Level Organizations”, “Village Cadres’ Job Responsibility System and Their Remunerations”, “Implementation Measures for Participation by Village Cadres in Social Old-Age Insurance”, and “Standardizing the Expenses Issuance Criteria Related to Village Cadres”.

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5.1.3. A plethora of reports “Reports” refer to report-back and summarization materials presented in written form. Townships send between 70 and a hundred kinds of report-back materials through their party and government office systems every year, not including the materials pertaining to family planning. Generally speaking, report-back materials are required for every inspection on matters such as increased financial income, increased peasant income, construction of grassroots organizations, grassroots democratic construction, comprehensive governance, discipline inspection, attracting overseas Chinese business and investment, popularization of laws, assisting the poor, and “three represents” study activities. Special written reports are required for virtually all forms of inspection and assessment work. To handle such work, every township has a person in charge for writing materials, and sometimes more than one. Though the volume is large, writing reports is not difficult. Secretaries describe three basic formulas: (1) Write them on the basis of the original work plans, converting the plans’ “future progressive” tense into the “past perfect” tense when copying in numerical quotas; (2) Write them on the basis of documents issued by the higher-ups. These documents generally specify important slogans, formulations, and work methods, such as “The main leaders shall personally take charge”, “Concurrently-in-charge leaders shall come forward”, “Special institutions shall be set up to take specific charge”, “Assign responsibility to specific persons”, and “Have funds in position”; (3) Flexible use of “exemplary experiences”. Most townships have a certain number of exemplary experiences. The key to writing report-back materials is to know how to use and develop these experiences so that “one serves 10 uses”. For instance, a certain village in the township has an exemplary experience with peasant households raising cows. This example can be used when summing up experience in “adjusting the industrial structure”, or when summing up “using science and education for revitalizing the rural areas”, or when summing up “branch party committee leadership in bringing prosperity to the masses”. It can also be used when summing up the “abundant fruits

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of learning and teaching the three represents”, or when summing up the “three ways of linking up with family planning work”. As for how these cows were bred and raised, explanations can be tailored to the circumstances. In short, although writing reports can be time consuming, it is not difficult if the secretary has a grasp of the essential formulas for doing so and possesses basic writing skills. The family-planning department has the biggest work load when it comes to writing reports. They produce many written reports and fill in many forms. Their written reports belong to a separate system and generally do not figure in the textual report workloads of the township governments’ party committees. During our investigation in one township, a deputy in charge of family planning found it impossible to calculate the workload in terms of the number of copies of materials sent up, or the number of words used in them. He only said: “In the fourth quarter alone, the family planning office used up a whole ream of paper to print report-back materials.” One ream consists of 1,000 sheets of paper, or the equivalent of 16,000 pages of size 16 paper.

5.1.4. Unceasing visitors Receiving cadres from higher levels of government is an important part of the townships’ everyday work. Personnel from all relevant county and prefectural departments come to the townships, but with varying frequency. In terms of work content, the highest concentra- tions of visitors are from the departments of forestry, water conservancy, taxation, communications, agriculture, and family planning. Next are visitors from departments in charge of justice, land, civil administration, propaganda, organization, and discipline. After these, there are visitors from the departments in charge of science and technology, auditing, finances, personnel, education, planning, and environmental protection. In terms of temporal distribution, the largest numbers of inspections and assessments occur at the end of the year. Family planning departments come to the townships with the greatest regularity, since they conduct routine inspections every quarter and even every month. Visits by other departments depend on specific circumstances.

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Many leading township cadres mentioned that personnel from a number of county departments often drop in on the townships around noon time with their sights set on eating a meal. In fact their work could be discussed and disposed of in a few minutes, or even settled with a phone call. But if they come in person they must be received. In most townships, leaders entertain, on average, one or two tables of guests every day of the year. Some township party secretaries declared that more than two-thirds of the visits by persons from higher levels produced no positive effects whatsoever. Receiving the guests poses little difficulty; the problem is the time and money required. This varied considerably among townships. The minimum was 20 days, and the maximum, 300 days. Principal township leaders averaged 100 to 150 days of reception activities every year. In terms of expense, one township cadre said: “Reception expenses for our township were shown as RMB50,000 on our final accounts tables, but in fact last year’s true expenses amounted to RMB160,000. Our entire fiscal income was RMB1.2 million.” Generally, accounts do not reflect all expenses. In those townships that frankly discussed this problem, we found that reception expenses accounted for 5% to 10% of the fiscal income of townships with mid- dling or poor economies. The smaller the townships’ income, the greater was the proportion of reception expenses to their income. When VIPs come to visit, expenses add up quickly as reception standards have to be raised by arranging for receptions at higher-grade venues in nearby cities, and including karaoke singing, sauna sessions, and mahjong. Township leaders said that in the 1980s there were fewer inspections and assessments, fewer visitors from higher quarters, and most importantly, those that did come did not need to be especially enter- tained. Even county committee secretaries who came to the townships took their meals at canteens; if extra dishes were ordered it was often paid by the township party secretary. The same, of course, went for other higher-level persons who came down to the townships. The situation began to change in the early 1990s. As inspections and assessments became more numerous and complex, the number of persons coming from higher levels increased. A good many of the

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currently prevalent rigorous and detailed measures for assessing standards began in this period. The inspections and assessment involved family planning, attainment of school standards, solicitation of subscriptions for newspapers and publications, party member studies, and so forth. Many of these items were assessed by means of points, and all affected the leading township cadres’ political performance reports. Among the visitors coming from above were personnel from departments capable of reviewing and approving projects and appropriating funds — they had to be treated with even greater care. In this case, poor townships could afford even less to be regarded as poor hosts. Leading township cadres also informed us that there has recently been a marked decrease in the number of county and prefectural leaders coming down to the townships. More often they were in the counties receiving visitors from yet higher levels, or visiting the higher levels themselves, or going abroad. Similarly, leading township cadres were going down to the villages less often, but spending more time on receptions in the townships or running around the higher levels.

5.1.5. Frequent inspections Generally speaking, there are as many kinds of inspections as there are higher-level departments. Under normal circumstances, the township leaders have to come out in person to receive all inspection teams headed by responsible persons of county and prefectural departments. On average, townships play host to between 20 and 40 inspection activities every year. This does not include the inspections for which the various township stations (zhan) independently give receptions. Some inspections end with the production of documents. Inspections of this type begin with the reception of documents from the higher-ups and end with the sending out of township-level documents. This is called “using documents to implement documents”. Tasks of the “political studies” type, “spiritual civilization” type, or “construction of clean government” type often use this system. “Using meetings to implement meetings” is more frequent at the county level.

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Today, the townships avoid holding meetings as far as possible. Even the previously indispensible township statistics meetings are no longer held. In the past, statistics personnel were assembled at the township every year to discuss suggestions on how to fill in reports with quantifi- able socioeconomic objectives. Today, township statisticians do as they see fit, subject to approval by the principal leader. Some of the work inspections focus on the external walls visible from central village lanes. Party members study systems, for example, they are all inspected to see whether the systems have been written out and “put on the wall”. “Putting slogans on the wall” is also very important in family-planning work-objective examinations. For instance, it is clearly stipulated that every village must permanently put up two slogans about equality between boys and girls (such as “Daughters, too, carry on the family line”), otherwise points are deducted. During the days of major inspections, one often sees cadres alighting from automo- biles and making straight for these walls. Some inspections require examinations of file cabinets and minute books, including records of such things as “party member study days” and “democratic activity days”. The way to deal with such work is to get someone to compile and write out the minutes on the spur of the moment, or to directly use the previous year’s minute books but put current-year covers on them. Some work inspections must be dealt with by urgent mobilizations. Most typical of these are “surprise attack inspections” related to family planning. Such inspections have exposed problems, and are thus seen by the higher levels as successful. Generally speaking, these inspections are organized by the provincial authorities and their movements are as furtive as those of secret agents. When the inspection teams set out, even the team members are ignorant of their destinations. They learn the county to which they are going upon unsealing an envelope after entering in the vehicle, then learn of the specific township by opening a second envelope after arriving in the county, and then the village from a third envelope after arriving in the township. As soon as they arrive at the village, the inspectors conduct dragnet- type inspections, going to each household to check and verify births. Such inspections are usually conducted in only two or three villages in one county and one township, and the results of the inspection are

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taken to represent the standard of work in the entire county or township and are used as grounds for assessments. To a bystander, such inspections are mysterious and unpredictable, and would appear to be unbeat- able. However, some leading township cadres told us the following:

“We have some countermeasures. First, no matter how secret inspection arrangements are, we often know when [inspection teams] enter the local city, because we have inside connections in the province and we learn the license plate numbers on their cars. Second, once they enter our prefecture, the relevant departments in the prefecture and all counties keep them under observation and report on details like which restaurants they go to eat, what they eat, and at what time they intend to set out the next day. Third, the counties and townships place lookouts along the roads, and we get accurate information about where they have gone and where they get out of their vehicles. Finally, as soon as we trace their whereabouts, we can estimate the day on which they might come to our township. This way, we can give advance notice to the villages that fall within their sampling scope (generally only villages with more than a thousand people are inspected), so that families with out-of-quota children may take cover beforehand. Hence, we are usually able to get through these inspections safely.”

Of course, remedial measures are sometimes necessary. One township party secretary mentioned that an out-of-quota birth had been discovered in one township, and the township authorities “squared off” the inspection team members with RMB5,000. Generally speaking, if provincial authorities come to conduct an inspection, prefectural, county, township, and village authorities urgently mobilize to cope with the matter together; but if prefectural authorities come to conduct an inspection, county, township, and village authorities urgently mobilize to cope with the inspection together. For example, when provincial authorities conduct inspections, relevant departments in the prefecture probe for information before and provide the counties under them with “public services” in the form of inspection news and ways of dealing with the inspection. And when prefectural authorities conduct inspections, relevant departments in the counties provide the townships with similar

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services. In this process, the ones who conduct inspections are always isolated, and those being inspected share the same interests, unite with each other, and together confront the higher authorities and reduce the effectiveness of inspections. If even inspections on family planning can be dealt with in this manner, then other inspections, such as those that have to do with compulsory education and wiping out illiteracy, are barely worth mentioning. All government operations are inevitably accompanied by meetings, documents, briefings, inspections, and other such activities. Hence, there is no reason to level criticisms of a general nature at “ obligatory interactions”. The problem rests in whether the interactions currently required by grassroots government are justifiable. The over-imposition of such interactions leads everyone to complain. The central authorities have prescribed a variety of prohibitions to deter the extravagant and wasteful practices brought on by obligatory interactions. Prohibitions are important, but more important is finding ways to stop such undesirable behavior.

5.2. Township– Village Relations In the current system of rural organization, villages are defined as self- governing entities, and village-level organizations are the administra- tors of village public affairs. However, we observed wide discrepancies between theoretical structure and actual operations. Since 1990, a reverse operational logic has emerged as resources and organizational structures for village self-government have proliferated and the villagers’ impetus toward self-government has grown in strength while, at the same time, townships’ administrative controls over village organizations have not slackened but rather have become more strict, in some ways stricter than during the people’s communes era. The operational logic of local governments runs counter to the logic of rural society.1 The interaction of these trends has caused a formal strengthening of township control over the villages while splitting grassroots government from rural society.

1 Interview Data: 2-12.

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5.2.1. Township administration of village cadres Although village cadres are still villagers in their basic status, the townships’ incentives for them are modeled on methods of internal governmental management, that is, the townships manage them as government officials. All 20 townships conducted audits of village cadres using the “target responsibility system” and township governments set all salary standards for village cadres. Tasks set under the target responsibility system have relentlessly increased, objectives are becoming increasingly detailed, and the proportion of material incentives is expanding. Although township leaders maintained that this is the most effective system for managing village cadres, the effects of the target responsibility system have been barely satisfactory. Half of the township leaders believed that the effects of the target responsibility system were fairly good or moderately effective, while the others found the results to be poor or only superficial. Assessment methods fall into two categories.

5.2.1.1. Point-scoring audits About 15 of the townships adopted quantified points-scoring audits for assessing the work of village cadres, which consisted of a set of relatively rigorous methods. The contents of the audits were first determined by breaking down the townships’ objectives, and then related to various aspects of constructing a “spiritual and material civilization”. Townships awarded points for tasks completed, determined grades of various work performances, and on this basis determined awards and salaries for village cadres. A township party secretary from Shanxi said: “For village cadres, we set their objectives at the beginning of the year and conduct audits at the end of the year. The results of the audits are linked with their salaries, which are issued by the villages, but set by the township. We have a structured salary system: the first part is basic salary, set in accordance with the village population, and consists of four levels with a RMB200 difference between each level. The second is a length-of-service salary that is calculated according to the tenure of a

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village cadre — RMB10 for each year. Length of service is not calculated cumulatively; those who regain office must start all over again. The third is post salary: a party secretary gets RMB500, a village head RMB300, and an accountant RMB200. The fourth is performance salary, where points are allocated for various tasks, including family planning, finance and taxation, party construction, politics and government, afforestation, attracting investment and projects, repairing hazardous school buildings, and constructing paved roads. Contents differ and depend mainly on the year’s work tasks. A full score is 1,000 points, with each point worth one yuan. Village cadres who are among the top three in the township get bonuses of RMB500, RMB400, and RMB300; village cadres who score among the last three for family planning work are fined RMB300, RMB200, and RMB100; the last three for social stability are also fined RMB300, RMB200, and RMB100; and the last three in the overall count are fined RMB400, RMB300, and RMB200 respectively. The township also decreed that higher-level government cadres in charge of facilitat- ing work at a village (bao cun cadres) and village cadres receive the same awards and fines. We began this detailed method in 1996. The above account was representative.

5.2.1.2. Non-point-scoring audits These audits lay greater emphasis on the way key tasks are completed. Rewards and punishments were not based on the total number of points, but on the way certain items were fulfilled. For example, percentages or rewards were awarded for fulfillment of taxation tasks, and fines were calculated based on the non-completion of family- planning tasks. It was not necessary to first convert into points and then calculate fines according to points. Material reward was also at the core, but the township leaders also paid attention to non-material incentives. The party secretary of a township in Sichuan said: “I do not conduct target responsibility system audits for village cadres. I assess, in the main, the way agricultural taxes are collected. This method is simple and clear. The cadres are paid back a certain percentage of the

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tax payments. There are two situations in the collection of taxes. One is direct collection of cash, for which percentages ranging between 5% and 15% are awarded, the amount depending on the number of years such tax payments have been in arrears — the longer in arrears, the greater the percentage. The other situation concerns the remediation of government debt or collective funds, for which there are no pay- backs. Village cadres also get a subsidy for every day they spend collecting taxes in a village. There are also appraisals for political honors, such as “advanced village committee member” and “excellent party branch” citations and corresponding rewards. Village cadres who do not obey orders from the township are subject to organizational sanctions. Village party secretaries can be directly dismissed. Village heads cannot be sacked but can be ignored, not called to meetings or other events, or other ways may be employed to get rid of them. A township party secretary in Hunan informed us: “We, too, carry out target assessments for village cadres, but in reality these are meaningless. Their salaries are already pitifully low, and fining them on top of that goes against the grain. Besides, if you set targets and they see that these cannot be reached, they simply let everything drop. I have abandoned this practice and do not use the percentage system to manage village cadres. Instead I make use of economic, administrative, and personal means — the carrot-and-stick method — to stimulate enthusiasm. One way of encouraging village cadres is by increasing their salaries. But there is another way, and that is to put more effort into cultivating loyalty — for instance, by assisting them when their children are seeking work, joining the army, or going to college; by helping their families make business contacts, or by calling them together for meetings and some drinks before and after Spring festival. If village heads do not obey township instructions, they can be turned into figureheads and not called upon for anything. The party secretaries can be asked to handle matters. They are appointed by the party committee and may be replaced if needed. The party secretary of a township in Zhejiang told us:

“The economy here is booming, and many families of village cadres run enterprises and business projects with assets worth millions. One

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important way for me to mobilize enthusiasm among village cadres is by making them realize that being a cadre is helpful toward their personal enrichment. I tell them not to look down on the roles of village party secretaries and village heads, for these are indispensable in developing enterprises and side occupations. By taking part in meetings in the township and district, they can get the most direct policy and economic information and become acquainted with people who are helpful for expanding sales channels. Finally, their positions as party secretaries make it easy for them to secure loans and raw materials.”

5.2.2. Township control over village finances During the people’s communes era, all production brigades had their own accountants and cashiers, and enjoyed relatively independent finances. In the first decade of reform, village-level organizations also had their own independent finances. Since 1990, the degree of control by township governments over village-level finances has constantly increased and the post of village accountant has been eliminated. At first there was “single proxy management”, whereby the township government only took charge of village account ledgers and did not directly manage cash. This later developed into the fairly universal “dual proxy management”, whereby both account ledgers and cash were put under “proxy management” and the township governments assumed full control over village finances. The main reasons given by the townships for doing so were the chaotic management of village finances and the presence of financial loopholes, which aroused discontent. About 16 out of the 20 townships had adopted the “township-management-over-village-accounts” system. One village adopted a system of township and village “joint management” of village finances, i.e., the township only managed that part of village finances that concerned higher-level transfer payments, and the rest was managed by the villages. Among the 16 townships that implemented the “township-management-over-village-accounts” system, six practiced “single proxy management”, and 14 practiced the “dual proxy management” system. Implementation of the “township-management-over-village-accounts” system began largely in the late 1990s. One of the townships

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started in 1991, five started in 1997, two in 1998, two in 2002, two in 2003, and another two said they would start after the tax reform. After rural tax reform, village cadre salaries in many places will be coming directly from higher-level transfer payments, and independent village level finances will basically cease to exist. The system strengthened township governments’ control over village organizations. In the villages surveyed, there were upper limits of RMB300, RMB500, and RMB1,000 on funds that village cadres could disburse at their discretion. Funds exceeding these limits required signed approvals from the township’s cadre responsible for the village, deputy township head, or even the township head. The mechanism became more stringent after tax reform, as a village head from Hebei complained: “The village can decide on RMB1,000 of expenses. But drilling a motor-operated well requires RMB5,000, which means that the village has no right to decide on striking a well for irrigating the fields. I have been a village cadre for almost 40 years, but controls were never so tight even in the time of the people’s communes. Today, not a scrap of power is left at the village level.” A township in Shandong does things this way:

Dual proxy management is required here, but in fact the money is still managed by the villages, and the township agricultural economy station only manages the accounts. There are presently 24 cadres at the township agricultural economy station, but only eleven really work there. The township has been divided into eight work areas (gongzuo pian), with one agricultural economic staffer serving as accountant for each area. The villages’ expenses are entered into the accounts after party secretaries sign for them and the villages’ democratically elected ﬁ nance management teams afﬁ x their seals. Unreasonable expenses are rejected, and those that exceed standards are not reported.

From their own experience, the township leaders summed up the pros and cons of the system. The advantages are: (1) it lessens confusion and standardizes village finances; (2) it reduces disputes among cadres and rural residents; and (3) it exerts control over unreasonable expenditure items, reduces the debts of village organizations, and

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guarantees the salaries of village cadres. The disadvantages are: (1) the original motive for the system was to concern about villages’ inability to properly manage their accounts and the indiscriminate use of public funds, but misappropriations have also occurred under township management; (2) removal of independent financial powers has affected the enthusiasm of village cadres; (3) fees collected to fund township management increases the burden on the villages and the strain on township finances; and (4) asking higher-level government for all village expenditures, large and small, violates the principle of village self-government. Leaders in three townships clearly stated that the management of village finances should depend on systemic supervision instead of township governments.

5.2.3. Townships’ area management and Bao cun systems When a township arranges for a government cadre to liaise and assist a village’s work, this is called bao cun or “sponsoring a village”, and when the township assigns a cadre or sets up a special institution to coordinate and manage the work of several villages, this is called “area management” or “district management”.2 This form of organization was extensively used during the people’s communes era to guide village work. Even today, this method of management persists and is undergoing a revival.

5.2.3.1. The area management system The area management system has become more systematized in recent years. Some township party committees and village branch committees have set up party branches themselves and appointed administrative area chiefs to lead the work. Among the 20 townships surveyed, six had established management districts or management

2 “Area management” or “district management” is called “guan pian” in Chinese. “guan pian” is an unofficial administrative arrangement in rural China. The management level is above the villages but below the townships. “Pian” typically refers to geographically adjacent three to six villages.

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area organizational institutions, and seven had defined such areas, although they had not established formal institutions. In general, positions of main responsibility in the management districts or areas were held by deputy township leaders, and capable village party secretaries were assigned as deputy area heads. In most townships, management areas did not constitute independent management levels; the principle reason for setting them up was convenience and connectivity, and their main task was to fulfill various tasks in accordance with the instructions of the township party committees. In a minority of townships, the management areas were independent institutions and had substantial management powers over village organizations; effectively a level of management had been created between the townships and villages. Among the townships surveyed, the area heads in three townships had substantial powers to manage village affairs, such as assessing village cadres, selecting village-level leadership teams, deciding the salaries of village cadres, reviewing and approving village-level finances and recommending new village cadres. The strengthening of the area management system is linked to township amalgamations. Many township leaders admit that after the township mergers, it will be difficult to find positions for cadres, which is why the number of management areas are being increased. It is worth noting that, along with the growth in the number of areas implementing township mergers, management areas may emerge as the new growth points for institutions and the new channels for cadre employment.

5.2.3.2. The Bao Cun system Compared to the area management system, the bao cun system is more widespread and all of the townships surveyed had implemented it. Bao cun cadres constitute a permanent channel of liaison between the township governments and village-level organizations, and township governments’ audits of village-level organizations were effectively also audits of bao cun cadres. Bao cun cadres have become fully involved in all village matters, especially work assigned to the villages by the townships, supervising and assisting village-level cadres. Bao cun cadres focus on resolving destabilizing factors or major incidents

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in the villages. For instance, bao cun cadres were expected to take the lead in tax collection, during the organization of elections for village- level leading teams, or when handling peasant complaints. When the village party secretary and the village committee were at loggerheads, bao cun cadres would assume the duties of village leaders. Village-level organizations have recently faced increasing numbers of problems — in particular, conflicts between party branch committees and village committees — and many village-level leadership teams do not function. Thus, there has been a notable increase in township government personnel acting as village party secretaries. There are two kinds of bao cun cadres: one lives in the village, while the other only occasionally visits the village. The majority of bao cun cadres are the latter type. Generally, cadres live in the villages under two circumstances: one is when a crisis has emerged, with potential for even bigger problems to break out. At such times the higher levels will station cadres in the villages; the other situation is when the village is exemplary and the higher authorities wish to nur- ture it into a model village, or are preparing it for an inspection by higher-level leaders. Many bao cun cadres are not from townships and counties, but come instead from prefectural and even provincial-level organs. Some provinces and cities are promoting it as a learning experience and constantly sending down large numbers of cadres — dispatching as many as thousands or tens of thousands of institutional cadres at a time to bao cun and be stationed at one location. Judging from the government’s own summaries, this method seems to be very successful. However, the township leaders with whom we came in contact universally disagree with this. They maintain that, apart from a few wealthy and powerful departments that can furnish certain projects or funds, the great majority of cadres from upper-level organs are absolutely useless. They cannot aid either the peasants or the township governments. On the contrary, grassroots cadres have to treat them with kid gloves and, when writing up summaries, must say that these cadres have resolved a great many problems in the villages and that their work has been very fruitful. Some township leaders put it bluntly: “If the higher-ups have money or projects, they should just give them to us directly. Sending down all these aging bureaucrats brings nothing but trouble.”

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5.2.4. Performance of village cadres Township governments have long sought effective control over village-level organizations; however, the great majority of township leaders lament that village cadres are becoming difficult to manage. Eight townships reported that village cadres have become less enthusiastic in recent years; five townships reported an increase in zeal; four reported little change; and another three noted that village cadres were keen on matters beneficial to themselves and to the villagers, but showed no interest in other matters. Reasons cited for increased zeal among village cadres were: increases in salaries (three); belief that being a cadre was beneficial (two); increased competition due to the pressure of reform (one); and improvements in the townships’ management methods (one). The main reasons cited for lessened zeal among village cadres were: the low salaries of village cadres and lack of wage guarantees (six); difficulties in carrying out tasks and in moderating disputes in the villages (four); corruption among some township leaders had damaged the image of the party and government (two); and lack of career opportunities for village cadres (two). Other reasons cited were: the village collectives’ lack of money to provide for fellow villagers; fear of being voted out of office by the villagers for being too subservient to the township government; uncertainty created by frequent replacements of township leaders and resulting adjustments in village-level leading teams; and the power of village clans, which deterred persons from households with fewer “fists” and less wealth from serving as cadres. According to the township leaders, relatively easy tasks were those that were closely linked with peasants’ livelihoods, and that were beneficial for the village cadres or rural residents, such as constructing roads, connecting electricity, building schools, and distributing materials and subsidies. Difficult tasks included tax collection and family planning, and empty ideologically driven tasks that the public disliked. Generally, work that townships found hard to complete was also hard in the villages. Some township leaders said: “Things that dis- please the villagers, such as family planning and tax collection, are becoming harder to carry out. Village cadres make great promises and

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high-sounding statements at meetings, but are unwilling to do the work. They even show little stomach for holding ‘democratic life’ and party branch meetings.” These township leaders feel that village-level organizations are increasingly “uncooperative” and are becoming less useful and increasingly lacking any independent capacity to complete government tasks. Some township leaders lament: “The village level is less and less like a level of organization. They seem to be incapable of getting anything done on their own, and township cadres must personally get things moving. In many circumstances, village cadres do no more than furnish township governments with information and tip-offs and show them around.” Village-level organizations are currently in the awkward position of taking on a stronger administrative hue while losing their real functions. Some township leaders even jokingly refer to the village-level organizations as “weichi hui”.3

5.2.4.1. Conclusion Since the 1990s, interesting changes have taken place in the relations between township and village organizations. While the vigorous launch of direct village elections (including direct elections of village committees and the “two recommendations and one election” system in party branches) for the election of village cadres are initiating a process of democratization, township party committees and governments are concurrently promoting a process of intensified administrative control over village organizations. As village socioeconomic life is becoming increasingly market-oriented and self-determined, organizations of public power within the villages are increasingly controlled

3 “ weichi hui” was a village organization established by the Japanese army during the anti-Japanese war. Its primary function was to help the Japanese army to control and manage village affairs in the occupied areas. However, the members of “weichi hui” did not have a strong incentive to work for the Japanese army. Therefore, for most of the time the “weichi hui” just pretended to be working for the Japanese, while in reality the organization and its members had no accountability for the Japanese army.

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by higher administrative levels (ke ceng zhi). Is this the right direction for the construction of grassroots organizations? We must also ask: Have these efforts at administrative control achieved the intended results? When viewed specifically, they have been effective in some situations, but not in others. But overall, their effects are unsatisfactory, as township governments are less able to accomplish their tasks. Relations between township governments and village organizations have become closer, but also more strained. Closer, because the township governments’ efforts to exert control are increasing; and strained, because a number of new variables and social factors have emerged between the townships and the villages, and discord is increasing between the levels. When talking about cadres going down to the villages, some township cadres said: “It is like when a gourd falls in a well. Seen from above, they have gone down, but seen from below they are still floating on the surface.” There is a disconnection between these “grassroots” levels of government. The third question raised is: Even if the townships’ administrative control over village cadres is effective, is the townships’ control over village society also effective? The answer is also doubtful. Some village cadres still focus on carrying out the township governments’ directives, but most do not, and the peasants even less so. The peasants do not know what the village cadres busy themselves with, and care little about what they are doing. They do not even care whether they exist, so long as they do not make trouble. Some village cadres busy themselves with township leaders, filling out forms, reporting information, hanging systems flow charts on the walls, and showing far more interest in meaningless work than in meaningful work. Work that pleases the higher-ups consists of grassroots governments “playing games among themselves” and has little to do with the peasants. Thus, in addition to a split between township governments and village cadres, there is also a disconnection between grassroots organizations and rural social life, between grassroots governments and the peasants. The reports heard at the higher levels indicate that the grassroots respond immediately to various directives and exhortations and closely follow up every step in their implementation, but in many circumstances the grassroots are divorced from them and straying

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further away. It is difficult for us to make a value judgment of this disconnection between the townships and the villages. From the governments’ angle, much work is just muttering to itself without having any real effect on rural society, and this is disheartening. From the peasants’ angle, the governments’ administrative controls and intervention are weakening, society is operating in a self-determined manner, and this is a positive development. The split between government operations and peasant life constitutes a real challenge to government reform and rural governance under the conditions of a market economy. An issue that requires deep reflection is: How should the government manage rural areas? In the last two or three years, important changes have taken place in rural society, tensions of a structural nature have markedly decreased, and the trust enjoyed by the central government has increased because it has launched a series of new rural policies. When evaluating the effects of the policies, one should by no means conduct a simplistic economic accounting of peasants’ incomes. More important than that are the improvement in the rights of peasants as a social group and the improvement of the government’s overall image in the peasants’ eyes. The implementation of these policies have once again made the peasants feel that they are cared for and respected, and they personally sense that “governance is for the people” instead of merely hearing the words on television. I can state with certainty that if the situation returns to its previous state — with heavy tax burdens on the peasants, rampant and indiscriminate requisitions of farmland, and unchecked harassment of peasants who work in the cities — there is bound to be even more instability in rural society. Without the peasants’ trust and support and rural stability, the “well-off society” (xiao kang shehui) is mere fantasy. However, we also found during our investigations that the central authorities’ policy changes and changes in the image of grassroots governments are not intrinsically identical. Contradictions arising from past policies have decreased, and relations between the cadres and the masses have correspondingly improved (as best illustrated by tax levies), but policy changes do not inevitably bring about an awareness of accountability or improvements in the abilities of

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grassroots cadres, because such problems are inseparable from the government’s structure. That is why the situation described by the peasants has emerged: “Although policies have improved, cadres have not.” This has not only created policy implementation difficulties within the government, but is also producing an array of other problems. Thus, rural stability remains tenuous, which is a cause for deep concern. The fundamental way to resolve the problem of “cadres changing for the better” is to change the governmental system. Hence, to lay a harmonious foundation for rural society, it is necessary to change policy direction and further reform the system of government.

5.3. Deadlock of Control Since the 1990s, the government has highly emphasized on the top– down universality of political commands, and protection of authority of the center and the higher-ups. All levels of governments have carried out ways to achieve the “universality” and “authority”, but the effect is less than satisfactory. The highly demanded control has come into a deadlock.

5.3.1. Policy malfunctions Studying the township authority and accountability may help us understand the failure of many policies. Some foreign scholars have showed great interest in examining the reason behind the failure of the central policies. It is commonly thought that the failure of policy implementation is due to lack of central control over the bureaucracy. In his research on the failure of the government to reduce tax burden on farmers, Thomas Bernstein contends that it is due to lack of control by the higher-ups on lower- level governments. Others argue that it is not simply lack of control capacity, but a problem of selective policy implementation at the grassroots level. Kevin O’Brien and Lianjiang Li argue that many grassroots cadres go out of their way to carry out those policies

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unfavorable to farmers, but decline to implement the policies favored by farmers. They argue that three factors have caused and strengthened selective policy implementation — decentralization of cadre appointment to the local level, end of mass campaigns, and the “responsibility system of cadre position target management”. Although these reforms strengthen the authority of the higher-ups, they have no control on rural cadres’ behavior. Thus, the cliff between cadres and the people grows deeper, and the grassroots cadres become more rude and selfish (O’Brien and Li, 1999). The argument provides an institutional explanation to selective policy implementation, and goes beyond what higher-up cadres often complain, the “low quality” of rural cadres. The core issue is the cadre system, which enables the higher-ups to use the personnel power to make the grassroots cadres carry out the disliked policies, but cannot guarantee that the grassroots cadres carry out policies that are favored by farmers. Therefore, if the higher-up governments do not involve popular participation in the cadre evaluation system, or carry out nationwide free and fair grassroots elections, they cannot guarantee loyal fulfillment of the policies meant to protect farmers’ interests. Some scholars have noticed that the internal conflicts of central policies have made these policies unable to be implemented. Maria Edin points out that, the failure of some policies are not due to the lack of control capacity by the center, but due to the fact that the central power has conflicts with its policies. The key is to look at whether the policies are given priorities. For example, because the policy of tax burden reduction is lower in order than some other policies such as economic growth, the implementation of tax burden reduction policy must be taken with less force. Edin emphasizes that, with reforms, the administrative and political control of the center over local cadres is growing, and the “state capacity” of controlling and managing lower-level governments is growing as well. However, the control capacity does not turn into the capacity of policy implementation. Through the cadre evaluation system, the center is effective in pushing forward the priority policies. But it is effective only on a selective basis. That is, it is effective on priority policies, to major local leaders, and in certain areas only. There is a large space left for

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local governments to treat those non-priority policies. And the center has less control over the less important areas. Some scholars further point out the complice problem in local governments. Based on the observation of a township government in Hebei, Zhou Xueguang studies the phenomenon that the upper-level governments require lower-level governments to provide matching funds for local economic development. He calls the top–down resource extraction “inverted soft budget constraint”. He further points out the issue of complice in local governments as they need to pass the evaluations. It is well known that “the higher-ups make policies, but the locals have policies to respond” (shangyou zhengce, xiayou duice). As a result, policy implementation deviates from policy intentions. In the Chinese administrative system, the complice in local governments has become an institutionalized informal behavior. Zhou explains the phenomenon from three paradoxes in organizations: (1) Paradox between policy consistency and flexibility; (2) Paradox between strength of incentives and target substitution; and (3) Paradox between bureaucratic impersonalization and personal connections in administration. He emphasizes that, it is not appropriate to simply attribute the complice behavior to the “quality” or capability of cadres. The consistent existence and recurring of the phenomenon is a result of organizational structure and institutional environment, a result of separation between policy making and implementation in the current organizational structure, and, to a large extent, an unintended result of the institutional design that features decentralized policy making and strengthening of incentive structure. Only if reforms are taken on the government organization structure and institutional environment, these problems can be overcome. The research by the Western scholars is very valuable. They not only analyze the decrease of central control capacity, but also analyze the conflicts of policies. But their observations are not systematic and fall short of dynamic demonstration of the government operations. This research comes from a new perspective to demonstrate how policies are dismissed by systematically examining the operation processes of the government. From the observations of the government control system, it finds that, the problems not only concern how higher-up

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governments manage the grassroots governments, but also how the grassroots governments manage villages. Obviously, the core issue is how to define the direction of the grassroots governments.

5.3.2. Disappointment of the grassroots levels It is inappropriate for higher-up governments to exert strict control over township governments that face the people directly and are not a department of county governments. The more complicated the management system is, the less likely township governments would fulfill their functions. Operations of any government would involve meetings, documents, reporting, and inspections, so a simple criticism to these routines does not make a lot of sense. The question is whether these routines are reasonable, and more importantly, why the routines still are prevalent despite criticisms from all over the place. The formalism that results from those routines leads directly to faking and feigning. Because of information asymmetry between the upper-level and lower- level administrations, the grassroots governments would make a lot of efforts to create and even exaggerate their political achievements. In fact the work of many grassroots is hard to measure. But the higher-ups are enthusiastic about inspections and ranking, thus are easily cheated by the grassroots. The feigned achievements will not deceive the people, who, however, do not have the opportunity to supervise the grassroots cadres. Those routines also generate personal corruption. In order to be acknowledged by the higher-ups, the grassroots cadres would have to not only report well and handle inspections well, but also take good care of personal relations with their superiors. Therefore, symbolic reports are followed by banquets and gifts. Endless receiving activities see repeated scenes of toasting, dancing and red envelops. These banquets and parties have led to loss of trust and even finger pointing between the higher-ups and the grassroots. The higher-ups denounce the grassroots being perfunctory and fake, while the latter criticize the former as unrealistic, full of commands, looking for exag- gerated achievements, and, as a matter of fact, “forcing the innocent to become a whore” (biliang weichang). In fact, the relationship of

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“high” versus “low” is relative. Many bureaucratic offices are both a superior and a subordinate. But everyone is denouncing the higher-ups and believes that the problems lie with the higher-ups. Under the current government system, the grassroots government leaders feel very suppressed. At the end of the government system, they have the closest observation of the systemic faults and have the most pointed criticisms. When faced with top–down assigned tasks and inspections, they feel powerless but have to undertake infi- nite responsibilities, and often feel played around or even sold by the higher-ups. As leaders of the grassroots governments and the front- line cadres to carry out government policies, they are most aware of which ones, among the many tasks, targets, and requirements, are real and serious, or symbolic, or temporary, while the higher-ups do not even know. They stand at the bottom to watch the system’s operation, and gain a clear insight on many issues. The higher-ups have created many “Nots” and “Prohibitions” to put a stop on the corrupt and luxurious atmosphere as a result of banquets and parties. Although these prohibitive rules are important, it is more important to improve the government operation mechanism, because the root cause of these unhealthy behaviors derives from the mechanism. As to the institution of villager self-governance, some research conclude that it is an institutional arrangement to allow the center and the grassroots society to directly cooperate to hold the grassroots cadres accountable. In reality, there is an imbalance between the control by township governments over villages and the constraint held by villagers over township governments. The institution of villager self- governance does not decrease the level of township power holding. Even the villager self-governments are integrated into the administrative system and become a subsidiary organ of township governments. In other words, a huge gap emerges between the policy intentions and policy results.

5.3.3. Management malfunctions By looking at the relations between the grassroots governments and rural society, it is easier to identify the mismatch of the management

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systems. We have seen thought-provoking changes in the township– village relations since the 1990s. On the one hand, with the implementation of village elections (including villager committee elections and village party secretary nominations and elections), the democra- tizing process has been launched. On the other hand, township party committees have intensified the administration of village-level organizations. Despite ever increasing marketization and autonomy in village socioeconomic lives, the public authority organizations in villages are increasingly being managed as part of the bureaucracy. It is a wrong direction for the grassroots organization development. More seriously, the bureaucratic control has not worked to its effect. It works at one time but fails at another. In general, it has become less effective and township governments are less authoritative. Since the mid-1990s, the relations of township governments and village-level organizations have been both close and tense — close because township governments have exerted more control over village-level organizations, and tense because some new institutional and social factors have emerged, which have made control more difficult and exacerbated the mismatch between the two levels. While speaking of the institution of pairing township cadres with villages, some township cadres said: “It is like a gourd falling down a well. If you look down at the gourd, it is down in the well. But if you look at it from the bottom, it is floating on the water.” In short, we can predict that a mismatch between township governments and villages is emerging. Even if the township administrative control over villages can be effective under certain conditions, can township governments effectively control how the rural society runs? The answer is not certain. In some villages, cadres still follow around the orders of township governments, while in many others, they do not. Farmers care even less. Oftentimes, farmers are not aware of what township and village cadres are busy about. Nor are they interested in finding out. They even do not care about their existence, so long as the cadres do not come for any trouble. Some village cadres are busy with fulfilling township leaders’ tasks, making up statistics for report, putting up posters of rules and regulations, and paying more attention to things on paper than real needs. Their work appears to be meaningful to the

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higher-ups, but is no more than “playing with oneself” within the grassroots governments, and has nothing to do with farmers. Thus, in addition to the mismatch between township governments and village cadres, there is a mismatch between the grassroots organizations and rural lives, or one between the grassroots governments and farmers. If one hears reports by the grassroots governments, it looks as if they are following very closely every orders, but in reality, they are going far away from expected. It is hard for us to make a value judgment on the mismatch. From the government perspective, it is not good that their work has become irrelevant to farmers and they have less influence on rural society. But from farmers’ perspective, it is not bad that government control and intervention are weaker and the society is running autonomously. Overall, the mismatch within the government and the one between the government and farmers reflect a lack of institutionalization in the government, and a real challenge for government reforms and rural governance under market economy. While county and city governments are able to control township governments on the surface through various ways, township governments have far less means to control village cadres. They hold village cadres accountable mainly through exchanges or by managing village financial accounts, but the control is useful only to village cadres and only to some of them. There is no real control over villages. From a historical view, information flow among the central government, local governments, and the common people is always a big problem. Especially at the time of special incidents and phenomenon, the information system has been the foundation of constructing government operations. American historian Philip Alden Kuhn demonstrates what information flow means to state power operation through his research on “soulstealers” in Qing Dynasty. “We now have read several stories: about sorcery panic spreading among the common people; about a monarch becoming convinced that sorcery is a mask for sedi- tion; about agnostic bureaucrats struggling to cope with demands from both sides but failing to satisfy either. These stories are layered one upon the another, several texts written on a single historical page.”4 It

4 See Kuhn (1999, Chapter 9, p. 244).

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makes one think that, at the grassroots villages in China, some incidents, especially the contentious ones, are often described in different versions by the government and farmers and by the higher-ups and the subordinate. The twisted government accountability system in fact has led to the political impasse of collective lying within the government. Both the higher-ups and the subordinate lie, and the former expect the latter to lie. Both the ex-officials and the incumbents lie, and the former hope that the latter lie. Speaking the truth may lead to political suicide. Looking a little far back, the Great Leap Forward and People’s Commune campaigns in the 1950s, and the Great Famine and the “Learn from Dazhai” movement in the 1960s, were all results of the accountability system. The current issues of fake economic growth, government debts accumulation, and political education activities turning into entertainments, are also results of the accountability system. The core issue is that, for the grassroots government leaders, the trust from above and from below is disconnected. The trust from above determines their political future, and the trust from below is hard to measure and is next to nothing. Management of government leaders is a political activity. But using economic means like the accountability system to manage cadres is to use economic means to management politics. And using thought education to manage government leaders would make it look successful on the surface but would lead to no real effects. As some Western scholars have mentioned: “The challenge of curbing malfeasance among lower-level officials poses serious difficulties for all political systems — ancient and modern, democratic and authoritarian alike. China offers an unusually rich site for investigating grassroots political reform, due to its lengthy political history and huge geographic expanse. With thousands of counties and hundreds of thousands of villages under its jurisdiction, the Chinese state for centuries has grappled with the problem of restraining grassroots authorities” (Perry and Goldman, 2007, p. 14). The struggle is still going on. Obviously, the management of the grassroots cadres needs to bring in more political means such as elections and independent and reliable public opinions, but should not keep the traditional dynastic old means.

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Public Services of Township Governments

According to the deployment plan written in the central government documents in the 1980s, the objective underlying the separation of political and social management and the establishment of township governments is to demarcate the roles of party, government and economic organizations in order to ensure their proper functioning and adaptation to the changing rural societies. The notion of “service- oriented government” was not brought up back then, but the idea that the government should provide public services was already raised only that it was not defined as explicitly. The provision of public services comes down to social management. Put differently, to the extent that the government provides good public services, the society is well managed and good governance is guaranteed. Overseas studies have identified three inter-connected fundamental dimensions conducive to good governance: First, the ability to mobilize political supports and seek a broad range of trust from the public; Second, the ability to provide good public services and meet the demands of the society; Third, the ability to resolve conflicts effectively through good channels (Minxin Pei, 2002). Good social management is necessarily indicated by the fact that public services are effectively delivered. For township and village residents, their appraisal of the grassroots government is primarily based on public services provided. The township and village public services comprise many aspects such as

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public security, education, public health, infrastructure, social support, environmental protection etc. Field investigations have revealed that the grassroots government has performed poorly in social management. The core of the issue is that the government fails to position public services at the center in its actual functioning. The grassroots government is still most enthusiastic about economic development. Although “public service” is a clear-cut label attached to the government, it is not integrated into its functioning. Chapter 6 examines the township government performance while delivering public services and analyzes the drawback of township institutionalization.

6.1. Primary Areas of Public Service The following discussion focuses on three areas of public service: public security, education and public health. According to the township leaders’ report and judgment, progress has been made with respect to all three kinds of public services in the rural areas since the new century. However, the degrees of efforts that township governments have committed to them are different, resulting in very different work performances in the three areas. In the area of public security, township governments have spent lasting efforts on it and achieved very positive results. As far as compulsory education is concerned, efforts have been taken in phases and the outcomes were sometimes trivial and sometimes distinct. Township governments have come forward to attending to public health issues and have taken some efforts on it, but have achieved minimal results.

6.1.1. Public security in towns and villages The situation of public security in most of townships investigated in this study is good. Generally speaking, the number of fatal or criminal cases has decreased, but property theft cases have increased. Compared to the late 1990s, the situation of public security in townships and villages is getting better day-by-day. Among the 20 townships being investigated whose primary leaders were interviewed, eight of the township leaders held the opinion that the local public

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security situation is getting better, five were of the opinion that the situation is getting worse, and seven of them commented that there is little change. As the interviewees pointed out, the fact that the situation of public security is getting better lies in three factors. First, governments at all levels pay close attention to this matter and focus on adopting effective measures to handle the problems. In particular, the one vote veto on comprehensive management of public security has resulted in positive effects. Second, the peasants concentrate on working to contribute to local economic development. Very few townships and village residents are unoccupied and thus the incidence of trouble making dwindles. Third, the legal sense among peasants is strengthened. The peasants are getting more conscious to learn more about policies and legal supports to resolve conflicts. To speak about the differences in public security across all townships being studied, the situation of two townships in the east coastal region is particularly good due to advanced economy and good employment situation. A township party secretary told us: “Generally speaking, the situation of public security in the rural areas is good, with few criminal cases. Most of the local people have complained of thefts. Some peasants have to sleep at the side of barns, ponds or orchards to protect their own property. The public properties such as electricity transformers and cables in villages are all likely to be stolen. The government and the police station have no time and good ways to deal with the theft cases.”

6.1.2. Rural education Since the early 1990s, with the township financial difficulties exacerbated, nation wide wage arrears for teachers in the countryside led to teachers’ strike, petitions and other issues. What is more, it also led to rural school arbitrary charges, which in turn led to increase in the dropout rates of rural students from school. Given this situation, the State Council decided that the funds for compulsory education should come from both the township government and county government, instead of only the former. Though the grassroots government just started implementing this policy, they are doing well. In a survey comprising all 20 townships, 18 villages and towns were found

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to have implemented the county-level funding program, where the county government pays teachers’ salaries in rural areas. However, two township governments are still responsible for paying teachers. How about the effects of the implementation of the county coordination system? About 13 towns have made it clear that teachers’ salaries are paid by the county government and the regional variation is low, as a result, teachers are relatively satisfied. The other towns have not changed. For reducing the peasants’ fiscal burden, there are significant variations among townships. Eight towns reported that they were unable to reduce the financial burden while other three were able to. Seven of them reported that township governments have less financial pressures. However, some townships reported that county-level co-ordination did not alleviate their own financial burden, because in these places, the county government took the townships’ fund for education and then disposed it countywide. Therefore, the township governments’ expenditure on education has not diminished. Compared with the late 1990s, the most significant improvements in rural education can be understood from the following: eight townships mentioned reduction in the number of school dilapidated buildings, teaching facilities has been enhanced greatly to improve the teaching conditions; five townships mentioned improvements in the quality of teaching; four townships referred to the popularization of nine-year compulsory education system that increased the enrollment rate; two towns mentioned the increase in the teachers’ wages and emphasized that the teachers were paid in full, which made them happy. The main problems in achieving rural compulsory education are reflected from the following responses: six townships mentioned poor quality of teachers in meeting the requirements of quality-oriented education; five towns emphasized on the high primary and secondary school fees; five towns mentioned inadequate funding for education which was because the state invested significantly less than normal; five towns mentioned that a big way to encouraging rural education would be to construct school buildings and lend funds to farmers for renovat- ing their dilapidated houses, however, the debt repayment was considered difficult; three townships referred to the higher dropout rate in the

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primary and secondary schools and low quality of education; two townships referred to the system management problems — the separation of financial authority and powers, and that the investment in education has become a heavy burden upon rural finance; a township mentioned that the teaching conditions vary between urban and rural areas. A Sichuan township secretary said: “I think the main problems of rural basic education and vocational education is that most children are too poor to afford books. Compared with the pre-reform years, school facilities and environment have improved, but people are still not satisfied. In the last few years, government raised loans to construct a large number of new school buildings in rural areas. Even now, the debt has not yet been paid. But now the higher-level government merges the village primary schools and township middle schools, leaving the campuses unused. The people say: the compulsory education standards are a whim and harm the farmers. It is too difficult for farmers’ children to go to school! In the past few years, the higher-level government reduced the taxes but raised tuition fees, a move which did not help reducing the farmers’ burden.” In Shandong, a township party secretary said: “The main problem is that the tuitions are too high. For rural families, in order to support a child to go to school, the family has a rather tight budget, living frugally and sometimes having to borrow money from others. For children living in the mountainous areas, the situation is even more difficult. Girls from the poor families often have to drop out of school, and cannot complete primary schools, not to mention going to college. Another problem is the debt before the formation of educational standards. It is difficult to repay. They do not know how to repay. Contractors often go to schools to request for the repayment of debts. The rural school enrollment rate in the mid-nineties was higher than now because the fees were lower back then. Now some schools, especially secondary schools, charge all kinds of fees and donations. They have become the richest work units, building houses and buying cars. The school teachers often resort to parents of their students for personal matters. The atmosphere is very bad. Another problem in rural education is that there are simply too many teachers than what is needed. Of course, the teaching conditions are greatly

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improved. The quality of teaching has also improved to some extent. In the annual meeting of the county and township people’s congresses, many representatives recommended to take measures to end the arbitrary charges in rural primary and secondary schools.” In late 1990s, many township leaders responsible for compulsory education registered strong complaints about their work. They believed that in this work, considering the limited size of national investment, pulling out a little money was negligible compared to a university where hundreds of millions or even more than a billion was invested. It was further believed that a strong executive order to engage in compulsory education standards for a few years bears “deformed fruit”. The term is so used to denote both advantages and disadvantages of compulsory education. Fruit, because compulsory education results in building the required school infrastructure, however, the downside (or “deformity”) is that the local government has to bear the entire expenditure. The farmers also pay the price. Villages are forced to borrow money for the construction of schools when most of the other already existing schools are under debt or they charge higher fees. Therefore, this situation forces the farmers’ children to drop out of schools resulting in 30% or 40% dropout rates in many rural junior high schools. As reflected in the summary of the work of government departments, “compulsory education” must be complied. An increase in number of schools with few school-going children has resulted in empty school buildings. Such idle school buildings have now become a place of pigs and chickens. As far as vocational and technical education is concerned, all township leaders surveyed generally believed that the enthusiasm among farmers to learn practical agricultural techniques had increased compared to the previous years. Rural work arrangements in mobilizing the farmers (including party members and cadres) to participate in virtual activities, such as political study classes, are difficult to achieve; however, if such arrangements are for non-virtual activities then it becomes easy to secure their participation. Compared to previous years, it was now easier to get the farmers’ support for spreading agricultural technology. Township leaders, mainly because of the farmers’ culture and advancement in science, are able to improve their

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awareness about the market economy. At the same time, improvements in working methods among the township cadres are also important factors. Earlier, township leaders used to indulge in administrative interventions and coercion. Now they focus on demonstration and guidance, providing technical and financial support and even organizing study tours for their farmers. In general, in the early years of the 21st century, fiscal burden toward funding compulsory education and protecting the incomes of the village teachers eased, at the county and township levels. In the past few years, the government had vigorously pushed the implementation of compulsory education, also taking into account the concerns of the leader of villages and towns toward such education. In this process, the grassroots government through various channels supported the renovation of dilapidated buildings and the construction of the schools to enable the actual implementation of the nine-year compulsory education goal. Despite this, implementation of rural compulsory education, conditions of schools and the continuing debt of teachers are still serious problems. As part of the county level’s overall policy advancement plans, the Township Education Management Department was directly placed under the county government. Therefore, the role of the township government in the implementation of rural elementary education was significantly reduced. To a certain extent, the rural basic education is out of the vision of leader of villages and towns. Just as it is necessary for the government to provide public goods overall, elementary education has been basically in the township government within the scope of duties.

6.1.3. Public health These town leaders speak highly of the development of public health in rural areas. According to them, this development is clearly manifested in the following three aspects: first, there are more clinics than before, and facilities have been improved; second, more and more private medical service providers are providing villagers with easy and convenient medical care; and third, village doctors are becoming more skillful and experienced.

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An interviewee in Shanxi tells: “10 years ago, medical service in the village was poorly regulated; now it is very different. At that time, some villagers went bankrupt from medical bills, and some of them just could not afford to go to hospitals. In my opinion, this problem could not be settled solely by the villagers or by the government. But the government should increase the financing and support for rural clinics, and improve the medical facilities.” Similarly, in Shandong Province, “local medical conditions have been remarkably improved. In the past, medical service was privatized and unregulated, now it is unified — clinics, facilities, medicine, assessments, salaries for doctors are all managed under the same framework, unqualified medicines and medical malpractice have been reduced. However, the main problem for public health is the low ability of rural doctors, and behind this is the insufficient budgeting of local clinics — better doctors leave for better hospitals, ordinary ones stay.” The problems of public health in rural areas can be understood in the following aspects: first, villagers without medical insurance cannot afford expensive medicine or medical treatment, many of them are impoverished by bad health; second, rural doctors are poorly trained; third, rural clinics are poorly financed and medical equipment are outdated while the charges are too high; fourth, rural medical service is malfunctioned; and fifth, unqualified or counterfeit medicines are widely proliferated and used in rural areas. A township party secretary in Sichuan tells us: “public health has been greatly improved in villages in comparison with pre-reform years, every village has set up at least one clinic, many pharmacies are opened in towns, and big hospitals have become well equipped. But it is widely reported that qualified doctors and cheap medicines are under-supplied, medical service is much too expensive, and corrupt doctors often ask for illegal money, causing patients to avoid going to hospitals.” A Shandong officer says: “for many years the national government did not stress upon the development of public health in rural areas, financial support was insufficient, causing many grassroots clinics heavily indebted, and some bankrupted; medical service to local villagers was thus unguaranteed. To solve this problem, policies of

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public health management must be reformed; hospitals should be maintained mainly with government financing, and second, with minor profit; networks of medical service should be established and medical conditions in rural areas should be improved; besides, medicare safety net should be set up for villagers to ease their worries.” Another interviewee says: “the economic condition is not good here, hospitals do not have enough facilities. The county could only subsidize the salaries of doctors; without surplus or government financing rural clinics cannot purchase better medical equipments. Villagers are impoverished, they do not go to doctors for minor ill- ness, but when serious diseases invade, they can by no means afford the treatment.” To improve public health in rural areas, the higher authority has agreed on a new rural cooperative medicare policy. But the prospect is not promising according to our interviewees. In one town being investigated, this new policy has already been carried out. The local Party Secretary tells us: “the new rural cooperative medicare policy works like this: every month the villager and the town/county governments pay 1 yuan respectively, but the effect is not so good. Because, on the one hand, villagers are distrustful of the policy and are unwilling to pay their share; and on the other, this new medicare could only cover up to 800 yuan per year, which is of little help to the patients.” And in another town, the new rural cooperative medicare system was established but now abolished. “The town government assigned 50,000 yuan to the villages every year, villagers were obliged to pay 30 yuan every year, and the villages paid their shares accordingly, thus formed the cooperative medicare foundation. However, few people applied for the medicare, because they were not sure about it, and most of them thought it was unreliable. The transparency of the foundation operation was questionable, and the premium was low. Since villagers were unwilling to join in, therefore, the system was abolished then.” Besides, these grassroots cadres are quite doubtful about establishing another new medicare system. Some town officers regard the provision of medicare in rural areas as a problem for the state, rather than for the town. They argue that the state had invested in high-profile promotion of education in the

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countryside, however, little was done; instead, town government was obliged to build schools with money collected from villagers. On the other hand, the state has neither invested nor valued public health. And naturally, town governments devalue it too. The establishment of rural clinics and local disease prevention system is well beyond the powers and responsibilities of governmental institutions at the township level. As long as the provision of health service is marketized rather than administrated, villagers will continue to be marginalized. The central government has already realized these problems, and has employed various methods. It is possible for the current situation to be reserved, although more work should be done. In studying town governments’ performance in the fields of public security, education and public health, we conclude that their response to the demands of local societies is inadequate. As governmental institutions at the grassroots level, they should do more practical work to draw the needs of villagers; and at the center of their work should be the provision of social public service. In practice, however, town governments are driven more by quantity than quality; rather than actual performance and reaching out to their people, they are blindly submissive to higher authorities. Therefore, when public security is considered crucial to the development of economy and society, or to the assessment of senior officers, town governments tend to prioritize the problem. When the central government highlights the development of education, or when it sets certain goals, town governments work accordingly but superficially; so the education problem in rural areas is still troublesome. Last but not least, the central government does not value public health as much as public security and education; although town governments attach great importance to public health, the effect is not satisfying. In other words, town governments’ work on this problem is guided by demands of higher authorities.

6.2. Management of Social Conflicts The management of social conflicts is an important indicator in meas- uring governance performance. In this section, we discuss the topic in

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the light of village conflicts. Our studies find out that the two aspects of village conflicts are developing in opposite directions. On the one hand, conflicts between villagers have subsided. In the early stages of rural reform, villagers conflicted with each other over leased farm land, homestead land or water source quite frequently. The main reasons were that the structure of rural interests had not been established yet, and the rules to regulate villagers’ relationship had not been applied; at that time, village conflicts were managed rather simply. After 20 years’ of development, interests of villagers have become better structured and regulated; therefore, the number of conflicts has declined significantly. On the other hand, conflicts between villagers and grassroots governmental organizations grew in number. Since 1990, the relationship between villagers and local cadres has become more tensed, local governments have been considered untrustworthy, conflicts have increased and the foundation for the stability of rural society shaken. Fortunately, this situation has been gradually reversed since 2003. New policies in fields such as taxation, employment and land expropriation have greatly improved villagers’ living quality. Besides, the institutionalization of grassroots governments is problematic, exemplified by the way officers at the township level manage social conflicts.

6.2.1. Intra-village conflicts With regards to the subjects involved in conflicts, two main categories of intra-village conflicts are identified in our studies: one is those between villagers, the other between villagers and local cadres. Experience of officers at the township level who busy themselves with managing these intra-village conflicts is very helpful to our investigation into the social situation, so our analysis is based on it.

6.2.1.1. Villagers versus villagers Generally speaking, villagers conflict with each other over two main issues. The first is directly related with the economic interest of rural households, and has close connection with the production and

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reproduction of rural families. Of great importance to these conflicts are land disputes, which 12 townships regard as the most troublesome. Of these disputes, some are linked to leased farmland, including disagreements over the claim to water source, the establishment of boundaries, the management of grazing land, and the right to unclaimed land and so on. Other disputes are linked to homestead land, including those over the base and the height. However, land disputes have remarkably declined due to the improvement of regulations on homestead land and leased farmland, and also to the reduction of the fundamental factors that lead to these disputes. The second main issue is rooted in inter-personal affairs, such as fights between children, gossip among women and other disputes between households. These conflicts are comparatively rare, and are declining as well. Besides, some cadres also refer to inter-clan conflicts as inter- villager conflicts. Most of the officers being interviewed point out that inter-villager conflicts have been greatly reduced in recent years due to two main reasons. First, the institutionalization of public administration at the village level has provided norms and standards with which disputes over homestead land and leased farmland could be solved accordingly, and villagers have also become more apt to reconcile with each other through deliberation. Secondly, villagers have become more knowl- edgeable about law and policies, and are more capable to manage conflicts accordingly. In addition, as more and more villagers find jobs in cities as migrant workers, their interests toward their home regions become less significant. This makes inter-villager conflicts less frequent as never before.

6.2.1.2. Villagers versus cadres In the 1990s, the relationship between the villagers and the local cadres became increasingly tensed and petitions against grassroots cadres surged in number. This situation worsened in the late 1990s. In some places, such petitions replaced the birth control as the most troublesome problem for cadres at the township level. Specifically, the following question areas were emphasized: (1) dissatisfaction with

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local charges or taxation, and inappropriate means used by village cadres, with 11 townships regarding this as the most important reason for intra-village conflicts; (2) dissatisfaction with ignorance or unfair- ness among village cadres, which is regarded by eight townships as the most important reason; (3) dissatisfaction with policy making and budgeting behind closed doors, this is especially problematic in villages with collective enterprises, where members of local economies are highly concerned with the lack of transparency in decision making and budgeting; (4) economic development, such as the construction of rural infrastructure and compensation for expropriated land; and (5) birth control. In one town, the conflict between villagers and local cadres arose because only few people were employed for tree planting and road constructing in the winter, since most young people had migrated to cities. The year 2003 marked the watershed of the situation. Conflicts between villagers and cadres reduced both in number and intensity. For instance, conflicts over taxation declined due to the implementation of tax reform, and so did conflicts over birth control due to the amendment of the one-child policy. However, conflicts over village development increased considerably where the villagers shifted their focus to problems such as poor rural infrastructure, inconvenient village lives, malfeasance of local leaders, undelivered public service, and so on. Different methods were used to highlight their grievances such as public complaints, refusal to pay taxes, and petitions, to name just a few. Generally speaking, these years have seen both the decrease of malfeasance of cadres and the increase in demands of villagers. Villagers have become increasingly concerned about the credibility and accountability of local cadres; they hold that cadres must be kind- hearted rather than ego-centric. On some occasions, however, this expression of “impeachment consciousness” has also led to conflicts between villagers and cadres. As mentioned before, intra-village conflicts happened continuously mainly because of problems such as land expropriation, allocation of homestead land, adjustment of leased farmland, and taxation, etc. However, conflicts beyond the village level increased due to problems related to land expropriation, environmental degradation,

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and cadre corruption, etc.; in other words, the focal point of village conflicts shifted to the relationship between village and local governments. Petitions could be seen as an indicator of the intensity of conflicts, while mass incidents are more significant.

6.2.2. Petitioning by villagers Petitioning is the externalization of intra-village conflicts. When a conflict goes beyond the village level, it becomes a problem for local government. Leaders at the township level play two roles in this process: “mediators” or “referees” where that subjects being impeached are village cadres or grassroots officers in town government; or, “defendants” when they themselves are being sued. But when petitioners bypass the township level and plead directly with governmental institutions at the county, municipality, or even higher levels, these town leaders anyway become defendants. Although they are not directly impeached by petitioners, their political performances have been flawed in their superiors’ eyes. Or in other words, petitions beyond township level are seen as villagers’ claim of mistrust or dissatisfaction with their town leaders. In this chapter, we focus on petitions that go beyond the town, or that have an impact outside the town. Our investigation shows that the situation is quite steady, with six towns indicating that the number of petitions has not changed much in the years following 2000, nine towns indicating that the number has decreased and five towns indicating that such numbers have increased. The villagers’ growing awareness of the law and rights is considered the main reason for such increase in the petitions. Some cadres also point out that this trend will be reversed as the rural policy environment is improved, and the performance of government is enhanced. The State Bureau of Letters and Calls of China has made “two 80%” statements about the nationwide petitioning situation: 80% of all petitions are rightful or partly rightful; and 80% of all petitions could be answered at the grassroots level. This statement also applies to our analysis of villager petitioning, according to local cadres and officers in related departments. In one county, the head of local

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Bureau of Letters and Calls tells us: “I am busying myself with meeting petitioners every day, and I know that they struggled to make this decision, some of them think really carefully before coming to us. What is more, some petitioners searched the shelves and consulted with experts beforehand, so when they entered the building, their claims were mostly rightful.” Some town leaders speak highly of petitioners’ use of reason in the process. One Party boss in a town in Hunan Province told us a story: “in 1986, the town government, in association with one village, planned to develop a piece of mountainous area by afforestation. The revenue was divided between the two parties, with town government claiming 90% and the village 10%. In 1992, the town government profited more than 90,000 yuan, and local villagers about 10,000 yuan. But, in 1995, the town government sold all trees without paying the village its share, and since then local villagers have been petitioning and refusing to pay taxes. In October last year, I called villagers of the two brigades involved, asking them how much they should be paid, and they asked for 10,000 yuan; since no evidence was presented, I proposed the compensation at 3,000 yuan, and we finally agreed at 4,000, although I was not so sure at the time. Then I asked my colleagues to work out the villagers’ unpaid taxes, which, even offset by 4,000, amounted to 3,000 yuan. At the end of the day, villagers from the two brigades were surprisingly satisfied with the result, and paid the taxes accordingly. I learn from this story that, villagers are not over-demanding people, what they truly want is, first of all, clearance; and secondly, understanding; and thirdly, sincerity and care from the government — that is, to comfort them when necessary.” Another Party boss in a Sichun town told us: “Last year we successfully prevented a potential mass incident. The county agriculture department purchased a large number of citrus seedlings from the provincial supplier. One year after that, these seedlings were found ulcerous; some existing fruit trees were infected too. In only three months, more than 120,000 infected trees were cut, buried and burned, including over 70,000 ripe ones. The famers were very angry, and planned to plead with the provincial government for compensation. Upon knowing the plant epidemic, officers in the town

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government went down to the farms, working hard with farmers to spray disinfectant and to deal with the dead trees, trying their best to lower the loss. Those farmers were deeply moved by the cadres’ sincerity and decided not to petition. What we learn from this story is that, as long as we do something wholeheartedly for the villagers, we could win their understanding and support, and thus ease the tension between government and villagers.” Mass incidents have taken place in only three out of the 20 towns being investigated. Two are located in the Eastern costal area, and one in the undeveloped middle-West, but all were caused by disputes over compensation for expropriated land; more specifically, one over land and the others over money. In all three cases, direct conflicts between villagers and local cadres as well as employed workers took place necessitating the presence of the police. The consequences differed too, with two cases ending with the government stepping back and raising the compensation standards, while one ending with the organizers being arrested and other petitioners retreating. Leaders from the three towns gave different comments on the cases. For example, one told us: “with the support of government branches, especially the law enforcement agencies, these kinds of riots could always be repressed.” In stark contrast, another one says: “The government must abide by the law in dealing with mass incidents, and be thoughtful to the villagers; otherwise the situation will be exacerbated.” In the eyes of these leaders, some kinds of the petitions are irre- solvable, or, no clear solutions could be identified. The first kind is historical problems. For instance, petition over property dispute that dates back to the 1950s or 1960s, for which no proof could be judged in accordance with, although the demand may be reasonable. The second kind is problems that exceed the powers and responsibilities of the government. In other words, the government has no approach to deal with these problems, no matter whether their demands are rightful or not. A Party boss in one town told us the following story: “one year, a man in our town died in surgery, and the hospital claimed it was normal death. However, the man’s mother did not accept this, saying her son died from medical malpractice and went petitioning all

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the way to Beijing last year. Our superiors were rather angry with this and blamed us. But there was clearly nothing I can do about it. That is what the so-called ‘local management’ means: I am accountable for whatever happens in my jurisdiction, no matter I am directly responsible for it or not. This is really ridiculous.” The third kind is petitions by laid-off town cadres. A Party boss in a Jiangsu town narrated this story: “during the last couple of years, we were mainly dealing with petitions started by temporary workers and laid-off workers in town- owned organizations, as well as those started by unfunded people in other bodies. We did it in accordance with written rules, but these people continued to raise the bars, which is far beyond our ability. This is much more troublesome than petitions raised by villagers.” When talking about petitions, these town leaders complain more about higher authorities than petitioners. One interviewee comments: “I just cannot understand the way high authorities treat petitioning. There are rules in the municipality, saying that if petition goes beyond the grassroots level, then the head of local authority is to be blamed. They apparently never ask for the reason of the petition, or that who should be responsible for it. And it is more so during the National Day, the New Year Day, the Spring Festival, the annual Two Sessions and so on. I just cannot understand why is the Party so afraid to see the people? What could the people do with the Party? I think the channel of petitioning should be unblocked, and any administrative attempt to repress it will worsen the situation.” This point of view is shared by many cadres at the township level, as well as those at the county or municipality levels. In the eyes of town cadres, most village petitioners have rightful reasons, and their demands are mostly legitimate. If the petition is aimed at village cadres or town governmental members, and is not going beyond the town level, then the town officers would generally choose to mediate through persuasion; but if the petition goes beyond, they often try to intercept, otherwise their political performance will be influenced due to the local management principle. However, our studies find out that most town leaders are rather sympathetic with village petitioners; instead, they are quite resentful with higher policies that set the rules to treat petitioners. Quite a few think that the intensification

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of some conflicts is actually caused by those unreasonable policies. A party boss tells us, an aged villager in the town pleaded compensation with the government for his house that was confiscated and damaged during the Culture Revolution period; since there is no policy to refer to, the government could do nothing but give him little money for comfort. But the villager was not happy and went to Beijing to petition on every important holiday or on the meeting days of the Two Sessions. Leaders in the town were blamed several times and so they had no choice but to house-arrest the old man in the backyard of the town government; three cadres are employed to watch him. The interviewee says: “Of course we knew it was illegal, but there was nothing else we could do, we were forced to do so because of the assessment policy.”

6.2.3. Grassroots political trust Political trust is the basis of governance, and is crucial to the relationship between the government and villagers. In general, “good relationship” implies high trust, with only a few exceptions. In eight towns, the relationship between villagers and local cadres was considered getting better, in six towns, it was getting worse and in six towns, the situation was not clear. However, some town leaders argue that political trust and village–cadre relationship may not be positively cor- related. They may mistrust each other in spite of their seemingly fine relationship. Some interviewees say: “in our town, mutual-trust between villagers and cadres decreased, although they get along with each other quite well.” In six towns, the credibility of cadres was said to be increasing, whereas in 11 towns, it was decreasing and the rest remained unchanged. The Party head in one town commented thus: “the relationship between cadres and villagers is either improved or worsened. But the people are growingly distrustful of the government; and it is getting more and more difficult to negotiate with them.”

6.2.3.1. Factors that improve the situation What are the factors that contribute to the improvement of relationship between villagers and town government? In six towns among the

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20, people said the government actually did something to improve their lives; in three towns, people mentioned that local taxation had considerably reduced since the reform; in three towns, people reported that the quality of local cadres had improved and their practice bet- tered; in two towns, village cadres were elected by local constituencies, and were more esteemed by the people; in one town, people said the local government has redefined its role and improved its services, as a result, administrative efficiency had improved significantly. Most town leaders are pleased to see the change, and they referred to their hard work and local elections as the most important factors. A Jiangsu cadre says: “in recent years, the relationship between villagers and grassroots organizations has been getting better. That is because the local government has done lots of good things for the people, and has solved lots of problems for them. For example, a few years ago, roads and running water system were constructed, and today we are establishing cable television system. Besides, we do our best to raise villagers’ income. In 1999 and 2000, some villagers gave the town government silk banners to appreciate our instructions on how to plant hyacinth bean.” Another Party boss in a Shaanxi town has a similar point of view: “generally speaking, the relationship between grassroots organizations and villagers is getting closer. There are three reasons for this: first is that cadres are elected and thus represent the majority’s interest; second is that they have changed their way of work, coercion is not used anymore; and the third is that village cadres are now working more practically and have done lots of useful things than before”.

6.2.3.2. Factors that worsen the situation What are the factors that led to deadlocks between villagers and local government? In five towns, local officers were alienated from villagers, and problems cannot be solved without close communication; in five towns, people were angry with local cadres’ corruption and malfeasance; in three towns, people’s demands for public service has outgrown the government’s provision; in two towns, villagers’ real income decreased due to economic downturn; and in one town,

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people reported that local powerful clans tried to manipulate election, as a result, gaps between these clans or sections grew wider. Of great importance is the non-coordination between the institutionalization and management of grassroots organizations, and the changing circumstances. A Shandong officer told us: “villagers do not trust local cadres anymore, because corrupt cadres are unwilling to help them getting rich, and tend to rule behind the closed doors. Village collectives are heavily indebted, and have no money for maintaining themselves. This situation will probably worsen in the future, if grassroots organizations do not reform, like higher authorities have already done”. Likewise, in a Hunan town, “relationship between grassroots organizations and villagers worsened. Of all local government members, only about one-third are working, another third responding to assessments, and the last third playing cards. Local leaders do not perform their actual responsibilities, and are indifferent with people’s demands. Some of them hardly study or read newspapers, and become incompetent when engaging the people. It is unlikely for this trend to be reversed”.

6.2.3.2.1. The decreasing of political trust About a third of the interviewees were “optimistic” about the development of villager–government relationship in the foreseeable future, another third were “pessimistic” and the rest were “not certain”. In talking with these town officers, we conclude that the standards that people use to measure the development is rather practical, that is, whether the government has brought actual benefits and provided necessary service to the villagers. From this perspective, the result of tax reform should be rethought. In a Sichuan town, “relationship between local government and villagers has improved due to tax cuts, but the prospect is not clear. On the brighter side, villagers may not conflict with cadres over taxation as much as before; whereas, on the down side, the relationship between the two could also be harmed due to weakening communication”. Internationally, the credibility of national governments has been declining, as public surveys in both Europe and the United States

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demonstrate. In the 1950s and 1960s, most Americans considered the federal government as accountable and efficient, since it had res- cued the nation from the Great Depression and the World War II; but in the 1970s, the credibility of the government remarkably declined as people became increasingly dissatisfied with the nation’s defeat in the Vietnam War and the corruption of politicians. By 1990s, the public tended to see the government as fragmented, inefficient and untrustworthy. Likewise, the agreement of the Maastricht Treaty in 1993 and the establishment of the European Union are results of the fact that the public held that their indebted governments must be reformed, and that government budgeting must be supervised. Remarkably, central governments are often more discredited than local governments. This has become an unsettling problem for both politicians and political scientists. The most fundamental reason, according to some European scholars, is that people are growingly concerned with daily affairs, such as education for children, relationships at workplace, security of the community, etc.; at the same time, they become indifferent with national affairs. For example, 40% of the citizens in Maastricht did not know about the conference in which the Maastricht Treaty was signed nor the contents of the treaty. Politics in democracies is arguably localized. Another important reason is that in Europe and the US, citizens actively and directly participate in local governance; but at the national level, they could only be “represented” under the principles of representative democracy. Therefore, people are more inclined to credit local governance; the higher the government level is, the less credibility it gains. In other words, public participation could increase social capital. This means not only the institutionalization of participation mechanism, but also the opening- up of public engagement. “All politics are local politics”, as it is said. In fact, in democratic countries, local governments are often more successful in carrying out their duties, interacting with their constituencies, and governing with different means, therefore are considered more credible than the central government. Reversely, investigations show that in China, the central government is more trusted, while local governments are regarded not so credible. This idea is frequently expressed by villagers like this: “high policies are good, but local

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cadres are too bad” or “higher officers are kind, lower officers are evil” and so on. The internal mechanism and the political consequences of this phenomenon apparently deserve more emphasizing and studying.

6.3. Control and Governance In the government documents and slogans, we find that the Chinese governments, both at the central and local levels, are developing a clear idea of building a “public service-oriented government” in the last decade. However, if we look into the government practices, what we find is a gap between the government idea (public service) and daily operation despite public service being the grassroots governments’ main task. Here, we argue that the governance crisis in rural China is a direct consequence of the grassroots governments’ failed transition from an “economy-oriented government” to a “public service-oriented Government”. “Scientific Development” is not only a problem of ideology, but also institutions of government operation.

6.3.1. Public responsibilities of the government As we have discussed, the grassroots governments’ main tasks are to promote economic development, more specifically, inviting investment, enlarging tax bases and making short term “performance projects”, rather than to provide public services in theory. The task of promoting economic development overwhelms the task of providing public services. Though as the higher-level government started to increase public service expenditures in the last decade, the grassroots government also invested more resources in public services, but it is still far away from a “public service-oriented government”. Take education as an example. Here, we find that the county government is in charge of the fiscal and personnel power of the township education apparatus, and education is no longer a task for the township government. So does the public health — only in the rich townships, will the township government take the responsibility of building hospitals. Except the public safety issue, the township government places nil

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priority on other issues. The township government prioritizes public safety and maintenance of social order and spends plenty of resources, even though it is the responsibility of the police station (paichusuo) under the direct leadership of the county Bureau of Public Security to do so. The key for building a public service-oriented government is an institutional reform within the government. Though shortage of funds is part of the problem, it is not the most important one. Some of the public services can be provided even with limited funds, the key is incentive and intention to serve people: the real problem is that the grassroots government and officials have no incentive to provide public services, including education, public health, technology service, environmental protection, and peasants’ rights protection. Under the current political system, because of the defects in the cadre evaluation system, the grassroots government is not responsive to the peasants’ demands. The defects in the cadre evaluation may be broken into two categories: first, the public services require long-term efforts and manpower and it is hard to attract officials for short tenures. Second, public services performance is hard to measure, thereby enabling easy manipulation of the data to show “good performance”. Take epidemic control as an example, neither human nor animal epidemic control is easy to measure except when some epidemic really happens. So does obligatory education, which is also hard to measure compared to economic growth. To have good public services, the grassroots government must have incentives to provide public services, which in turn requires personal responsibility and an effective accountability system. Since the government has more expenditure in providing public services in rural areas, the challenge is to build a responsive and accountable grassroots government. It is important to empower the peasants to voice their opinion on public services as they know to appreciate the levels of services bestowed on them by the governments. Since 2003, there have been some significant changes in rural society: there have been fewer structural conflicts between the peasants and the government, and thus the government has received higher trust. The most important cause for these changes is a series of

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new government policies. To evaluate the effectiveness of these policies, we not only need to evaluate the peasants’ economic gains, but also the changes in their social statuses and rights as a social group, and their growing trust of the government. The enactment of these policies improved the peasants’ perception of the government, and the situation has significantly improved compared to years ago when the peasants paid huge amount of taxes and fees and were discriminated in working as a migrant workers in cities. However, my fieldwork also suggests that there is a time lag between the central government’s policy shift and the change of image of the grassroots government. On the one hand, some policy shift, such as abolition of agriculture taxes reduces conflict between the government and peasants and improves their relationship. On the other hand, policy shift does not bring any change of the accountability, behavior model and capacity of grassroots government, mostly because these are caused by government institutions rather than policies. As some peasants told me: “though the policies are becoming better, the cadres are not.” Because the cadres are not becoming better, some good policies not only cannot be implemented but also may lead to some other negative consequences. Therefore, it is rather far away to say that the rural governance and social order have improved significantly as there are still very serious problems to solve. To make the cadres perform better, the only solution is to reform the government system. To solve the rural governance crisis, we need to push the government reform forward and redefine the role of the government — from a developmental government to a regulatory government. This is a historical moment for the grassroots government and we need to start with empowering the society by enacting and deepening grassroots democracy. Only through grassroots democracy, can we make the grassroots government accountable and responsive, thereby providing efficient public services according to social demand.

6.3.2. Double roles of cadres The grassroots government plays dual roles in rural social management. On the one hand, the grassroots government is the dispute/

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conflict mediator and tries to solve many disputes and conflicts, as well as mediate interest conflicts. To survey all potential unrests is now a regular task for the grassroots government, especially during the “sensitive period”. Many grassroots government officials are sent to the villages to survey all the potential conflicts and report to the township and county government to ask for solutions. This is an effective mechanism in solving disputes among peasants. We can say that without the hard work of the township government, some conflicts could get intense and worsen. On the other hand, the grassroots government is also the conflict maker. As Ronald Reagan says: “the government is not the solution of the problem, it is the problem.” Renyu Huang (2007) makes a similar argument “the state build up a civil service system to solve problems, but the civil service turns out to be the problem.” Many social conflicts are directly produced by the grassroots governments. There are two causes for such conflicts, the first is some cadres “do something bad” like violating the peasants’ interests and corruption; the second is cadres’ “omission”, like they do not respond to the villagers’ demand on public services. According to my fieldwork, the first type of conflicts has declined significantly in recent years but the second type is rising. Therefore, to reduce social conflicts, we should not only punish the bad guys (cadres) but also meet the peasants’ demands on public services. However, the current institution arrangements fail to do both. The government, especially the central government, can and should solve this embarrassing situation by separating these two mechanisms and encouraging the functions of conflict resolving, punishing conflict making. The government, especially an authoritarian government, relies on public service provision as an important source for legitimacy and political support. Public services are public goods that are provided by both the central and local governments. The basic public services like public security and education are crucial for social order, stability and for protecting citizen’s basic rights. Public services should be provided by some agents. In this case, the grassroots government is an important agent. But as we discussed above, the problem is that grassroots government does not account to the people but to its supervisors’ evaluation system.

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6.3.3. Political intentions of rural conflicts The political implication of rural conflict refers to the political consequences of these conflicts or their meanings. Especially since the Renshou incident of Sichuan province in the early 1990s, rural conflicts have received attention and concern from the society, government and academics. Issues like peasants’ petitions, letters and petitions, collective petitions, and group violent incidents, were well surveyed and analyzed in depth. Based on a close analysis of the history and current situation of social conflict, we find that there are some new trends in rural conflicts since 2000: first, the conflicts are now between peasants and grassroots government, instead of between peasants or villages. Second, the peasants are well organized, new and modern ways of interest articulation and aggregation are emerging while traditional ways are fading away. Third, while legal (through the “system”) resistance is the dominant way, there are other movements such as violent resistance which is not part of the “system”. The western scholars started to study China’s post-reforms rural conflicts much earlier than Chinese scholars. In mid 1980s, some scholars studied the rural conflicts in early 1980s and compared them with Vietnam and Europe (Perry and Wong, 1985). Perry finds that “the first decade of the People’s Republic saw numerous instances of reactive protests against the state’s strengthened presence on the countryside, but today, rural collective violence is more likely to be of the competitive sort in which rival kinsmen or villages vie against each other for control over local resources”. She also notices that China differs from Europe in the organization base. Owing to lack of unions, traditional organizations like kinship group and secret society flour- ished in China. O’Brien and Li studied peasants’ conflicts in the 1990s and found that Chinese peasants’ resistance was “rightful resistance”, which meant they used laws and regulations, as well as central’s policies as weapons to resist the grassroots government. What is more, during the conflict, the peasants used organized and ordered ways to convince their government (O’Brien and Li, 1996, 1998). Chinese peasants used novel strategies when compared to similar resistances in other

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countries. These studies help us in two ways. First, they provide a summary of rural conflicts in different countries and historical periods thereby shedding light on today’s China. Second, there are many methods and theories that we can use in our analysis of rural conflicts. We can categorize the foreign scholars’ ideas into two schools. The first argues that these rural conflicts show the peasants’ new demand for citizenship and the second disagrees and argues they demand economic rights rather than “citizenship”. O’Brien and Li represent the first. They find “rightful resisters normally frame their claims with reference to protections implied in ideologies or conferred by policymakers. Since they often demand little more than scrupulous enforcement of existing commitments, theirs is a defiance based on strict adherence to established values”, and argue “when rightful resisters cite people’s congresses as a model for turning villagers’ representative assemblies into policy-making bodies or claim that the principle of mass line democracy entitles them to vote in party primaries, or use vague clauses stipulating direct election to demand open nominating procedures, their resistance is both “loyal” and pro- active. It is simultaneously a means to advance one’s interests within existing limits and a way to assert new rights and pry open channels of participation that few power holders at any level could have fore- seen (O’Brien and Li, 1997, pp. 54–55).” In other words, rightful resistance is a very gentle way of resistance and relies on existing channels for participation and the support of political elites. David Zweig argues that China’s political and social dilemma is a result of the conflict between “newly emerged ‘peasants with rights consciousness’ and corrupt entrepreneur style cadres”. Maria Herimer emphasizes: “the rising rights consciousness in rural China may lead to important political change.” Merle Goldman finds that for Chinese people, “in the last two decades of 20th century, a major change is rising rights consciousness, especially political rights consciousness”. The rapidly and widely rising civil rights and civil society may “lead to significant change in China as in East Europe”. The second school of scholars, like Andre Nathan and Perry, disagrees with the first school and argues that the peasants demand economic rights and rights to survive rather than “citizenship” in Western

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world. Therefore, we should not overestimate the social resistances’ innovativeness and opportunities of leading to political changes. In other words, these group’s violent incidents will not affect social stability. Perry argues that the Chinese meaning of rights is different from the Western world. In China, rights are regarded as a state endorsed means to serve the nation’s unification and prosperity, rather than the natural rights that may be against the arbitrary state. Therefore, resistance reflects people’s rule consciousness rather than rights consciousness and the people’s resistance and pursuit of rights may strengthen the state power rather than challenge it. Such a kind of resistance has little threat to the state which is much more resilient and powerful than estimated. Under the current political system, elections cannot provide effective check of the abused state power but resistance could. Therefore, resistance strengthens rather than weaken our political system. In reality, the central government’s reaction to resistance shows more political flexibility than fragility. After compar- ing all the constitutions since late Qing dynasty, Nathan finds that “none of these constitutions take rights as part of human nature. On the contrary, rights are derived from citizenship defined by the state”. This resonates with Perry’s argument. This debate on the political implications of rural conflicts needs more empirical studies to arrive at a consensus. The author has no new data to offer, but according to my fieldwork, both types of resistance exist while the latter (rule consciousness resistance) is more common. Perry’s classification of resistance is very insightful and provides a new framework, as well as policy implications. The author would like to suggest that the next research topic should be how these political implications cause changes in the society, since rule consciousness can be transformed into rights consciousness and build new a political culture in China. In cross-country political culture studies, scholars find that citizens in western countries tend to regard the government as their kids, while Chinese people take government as parents. These attitudes have an important impact on their political behavior. Chinese people are very tolerant of government misbehaviors and even brutal behaviors, while the Western tend to constrain the government. This survey also finds that the Chinese people’s political

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views and attitudes are changing and young people tend to regard the government as kids instead of parents. This is also consistent with the author’s personal observation: the rural youth, especially the immi- grant workers, start to take rights as natural rights. This may lead to political change in China.

6.3.4. Defining good governance Though the Chinese government has experienced significant change and differs from the traditional dynasties in nature, however, the political traditions of old dynasties and the totalitarianism have some impact on it. What we find is that the government is uninstitutionalized, which makes it appear powerful but very fragile at the same time. The dual characteristics are shown in many cases and also a major puzzle for studying Chinese politics. Since 1978, the government has retreated itself from many economic management issues after a wave of decentralization. But the paradox remains, on the one hand, the government power is still over-concentrated. On the other hand, the government cannot manage many issues effectively and has many defects within itself. In other words, the government fails to discipline or constrain itself. It will take a long time to solve these problems. There is an emerging literature on China’s rural governance. Based on a large sample survey, some scholars find that direct elections in rural areas promote public infrastructure investment. This finding suggests that reforms that improve local political leaders can promote rural development. However, Lily Tsai gets a different finding. Based on several surveys, in-depth interviews and case studies, Tsai finds that the informal institutions and rural organizations have a significant impact on the public goods provision and rural governance thus enabling economic development and controlling the election and bureaucracy. She argues that under a transitional authoritarian regime, the local government has limited formal accountability for the following two reasons: the centre has limited resources to monitor the local governments’ daily operations while the citizens have no power to choose or monitor the government (leader). Therefore, informal

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institutions play an important role in rural public goods provision: the temple and kinship organizations/groups make public goods provision a good way to achieve reputation, thus improving the political leaders’ responsibility. In rural towns and villages that have compara- ble social and economic development levels, the lacking of these social organizations makes provision of public goods unavailable. What these studies find is that both formal institutional arrangement like election and informal organizations can improve grassroots government cadres’ responsibility to provide more public goods. In other words, we need take more efforts to build a new accountability mechanism. The World Bank 2002 report is titled as “Governance and Development”, which shows the World Bank’s concern for the importance of good governance in development, especially in Africa. The rationale is simple — Money is not enough for development, we also need good governance. Bad governance harms development. Governance includes many aspects, corruption, officials’ loyalty to the country, trust, efficiency of public service, management of social conflict, etc. Therefore, to promote development requires promoting governance. For grassroots government officials in rural area, governance means regulation, management and even improvement and rectification (zhengzhi). This understanding is reflected by their “comprehensive governance office (zonghe zhili bangongshi)”. However, we need a new understanding of governance, which differs from “ruling”. We need a transition from ruling to governance, which means there will be many centers/actors for governing: government organizations and non-government organizations, corporations, individuals and interest groups, even social movements. These actors interact with each other through participation, negotiation and coordination, to solve disputes and achieve social order. In today’s China, such an idea of governance is urgently needed. Such a change of idea could lead to a change in practice. Currently, power concentration is still a dominant way of governance for most grassroots governments: they try to use more concentration to solve the problems caused by concentration, or the government tries to directly solve the problems caused by its own direct involvement. The higher-level government tries to solve problems caused by

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centralization through more centralization. In many government works, when problems emerge, the government just wants to strengthen government’s involvement and leadership, expanding government organizations and staffs, as well as empowering the government with more power. As a consequence, centralization of power and concentration of power become the trend. This trend is wel- comed by most grassroots governments in current rural areas. However, this is not the solution for today’s governance crisis. To improve governance quality, we need both destruction and construction. We need to decentralize the power within the government as well as decentralize the power system. There are two ways of destruction: the first one is the government initiating reforms and the second is the government forced to start reforms under social pressure. According to historical experiences, the Chinese government was forced to start reform by social pressure rather than initiate reforms by itself. Though this may also apply to rural government reforms, the grassroots governments’ initiations are of great value for exploration of further reforms.

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Township Government in Prospect

The county system is a quite stable regime system. In terms of fundamental governance and management functions, the county system has remained the same for not only a few decades, but over a thousand years. Certainly, the inner structures of the county system and operation modes have experienced constant profound changes. However, the township presents a different aspect. After the establishment of China in 1949, as well as the opening up and reforms in last 30 years, the township as an administrative layer forming in China’s modernization process has assumed continuous changes indeed in both outer forms and inner structures. Before the reforms, the people’s commune that transformed from township government used to be taken for the “golden bridge” leading to communism, and people believed that they had found the end-result and objectives of the regime. After the reform, new objectives and orientations have been set up for township governments; however, now, after 20 years’ of reform, people have realized that township governments have failed to keep the correct orientation. Although the function and operation of township governments have tremendously changed since the cancellation of agriculture tax; with respect to the construction of regime, vague prospects need to be clarified coupled with in-depth investigations. The cancellation of agriculture tax did hugely change governance activities of grassroots governments, but never radically changed the

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operational system of governments. The cancellation of agriculture tax has placed new variables into such transformative situations that give rise to thorny and complicated problems, and urgently requires appropriate orientations. It has become a public issue, how township governments operate in post-agriculture tax times. A large number of people engage in providing suggestions to township governments, particularly in terms of “what to do” and “how to do”. Undoubtedly, these ideas are a result of important research conducted by academics. However, the outlook for grassroots governments cannot be generated by researchers’ design, which is manifested by the transition of township regime since its rehabilitation. Looking at the future of the outlook for grassroots governments, the key factor is to observe their actual changes, especially the operational evolution and behavior features under new situations, and then probe the mechanisms of how these behaviors occur and analyze by evolving regular patterns of those behaviors.

7.1. Destiny in the Mid of Crisis Although grassroots governments confronted with various problems, high-level decision makers have not issued extensively influential policies. That is to say, high-level decision makers are in no hurry to plan the fortune of grassroots governments, which might be a result of learning from historical lessons. In practice, the fortune and circumstances of township governments are changing all the way.

7.1.1. Situation and changes Since the start of the 21st century, there have been a large number of articles and monographs on township government, which revealed a range of problems and presented diverse and specific solutions. However, in general, those research works have ignored a significant issue, which is that the grassroots governments themselves are resolving problems. The people trapped in trouble are most close to solutions. When researchers drastically discuss the solutions to relieve township governments of adverse conditions, township cadres and

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local governments are looking for a way out as well. Such mutual endeavors, especially the interactions between grassroots governments and grassroots communities, will depict a novel prospect for township governments. While identifying the problems and harsh situations for grassroots governments, we also need to observe their responses. In fact, their responsive behaviors contain revolutionary experience and transitional logic, and can even help in predicting the future. Since the mid-1990s, the majority of China’s township governments have faced fiscal difficulties, and many township governments have been in heavy debts or gone bankrupt. Tax reforms and the cancellation of tax exert a constant impact on the livelihood of township governments. On the one hand, township governments’ revenue from peasants are suspended, which makes finance worse; on the other hand, due to the increase of transfer payment from higher-level governments, township governments can sustain basic survival and avoid falling into bankruptcy from financial crisis. Through investigation, we find that confronted with the same financial crisis, responses are totally different depending on diverse township governments and township cadres. It is widely acknowledged that township governments have been caught in a trap. The author’s view is that no matter what the higher level of decision making is, township governments have actually made a breakout. That is to say, different local township governments have made individual choices according to their own conditions. Under similar living conditions, the living modes differ among township governments. Although life is tough, township governments adopt different living strategies that can be truly meaningful. In light of this research observation, the responsive living strategies of township governments can be concluded as below.

7.1.1.1. Type A: Suffering and waiting This is a typical township lifestyle. The unstable and low wages makes people feel that they are in an unsustainable livelihood. Cadres cannot help but feel calm. People are still at work but have less workload. They feel free to sleep at noon and sneak off in the afternoon, even

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play cards and watch TV. It is troublesome when the wage is late or absent, but they believe that the higher-level governments will never discard them. From an outsider point, such a life is really a torture and time-wasting, which wastes both governments’ finance and labors’ precious time. In contrast, a large number of township cadres consider it a quite good job. Occasionally, some young officials want a different life, and then they may study hard to take the graduate entrance exam or bravely engage in market investment. We have met some active youngsters and have been fully inspired by their positive spirits. But this lifestyle is far away from the mainstream and most township cadres are not willing to or cannot emulate. As to the future, township cadres are anxious but have no other better solutions. Some cadres say: “Now, we have to live like this as after all we belong to the government, and the future should be handled by the party”. In general, they do have concerns with the crisis, but they are prone to insisting on waiting passively.

7.1.1.2. Type B: Dispersal and withdrawal A number of townships have adopted measures to respond to governments’ difficulties, and the main measure is withdrawing cadres from governments. Such withdrawal includes two basic forms. One is usually called “cadres diversion”, an institutional innovation that buys out cadres based on their length of service or that pushes cadres to the labor market, both of which are regarded as reform experience and are promoted to other places. The other is secret “autonomous retreat”, namely giving the majority of people holidays or letting people off work for other reasons. The main characteristic of this strategy tends to be vague definition that does not invade township cadres’ vested interest, which means that cadres do not have to work but they can still obtain salaries and benefits. Township cadres feel free to work or not, and township leaders do not care or allocate cadres’ work. Some townships adopt a work-shift system and use individual applica- tion, organizational mobilization and election to decide who would leave position year-after-year. Some township governments retain leading groups as well as station and bureau heads, and allow other

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staff to leave. The staying cadres are responsible for higher levels of meetings, inspections and regular administration. Dispersal and withdrawal are conducted in secret and not open to the public and higher levels of administrative units. County-level governments are usually acquiescent and do not care how many township cadres go to work as long as they attend county-level meetings, receive work inspections from higher-level governments, and hand in work reports and materials on time. This living style reveals a kind of township independent decision making and government retreat on the basis of stable salaries and benefits. The main leaders in these township governments are generally open-minded. Some local leaders believe that there are three advantages in doing so. First, idlers will decrease, especially those cadres who are keen on disturbing peasants. Second, those retreated cadres who take part in public service will create social wealth. Third, retreated youngsters gain the opportunity of improving themselves, taking advantage of their potential, and thereby realizing their self- value. A township government secretary said: “Those youngsters have been ruined with nothing to do in township neighborhoods. We would better let them explore in the society, and they will live a promising life.”

7.1.1.3. Type C: Group transfer Group transfer is also known as self-help production. It is a strategy that all township cadres work together to find a way out. In face of a range of disadvantageous conditions including decreased fiscal revenue, overstaffed administration and unsustainable salaries, all township cadres initiate self-help production. In autumn 2004, we carried out an on-the-spot investigation in a poor northern mountain township of China. The new township secretary was contracted for 40 mu of vegetables. Accordingly, all the township cadres’ key work was growing vegetables. Besides, the secretary focused on marketing and the head of township was responsible for organizing production. As a result, instead of being in arrears with the salaries, cadres were granted bonuses. Cadres were busy in farm work and nobody played mahjong. Some township leaders had not gone home for two months due

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to heavy vegetable farming. Although township cadres complained about heavy farming, they felt great receiving rewards in the form of sustainable and high salaries. Meanwhile, township leaders’ prestige soared. Another case is a town close to a mountainous view spot that attracts numerous visitors. Driven by development values, the township government mobilized cadres to repair roads and build an entrance for tickets. The ticket income afforded a dozen of cadres’ salaries. To sum up, the core feature of the self-help production in terms of mechanism is that it merely takes the form of layoff. The rule of layoff is that cadres dismissed as civil servants start their own businesses in the market. However, the self-help production does not influence cadres’ administrative identity. The changes lie in the division of labor, that is to say, cadres take turns to conduct vegetable farming and remain on duty. Another key feature of self-help in terms of organizations is the solid leadership of township party secretary and government head.

7.1.1.4. Type D: Transition to predator In face of financial deficit and suspended salaries, township governments usually take two measures to respond. One is to resort to higher levels of administrative units, particularly county and city governments, and to apply for subsidies and special funds, which is known as “Pao Xiangmu”. The other is to look down for solutions by seizing money from peasants through both legal and illegal measures. Legal measures include collecting evaded tax and offering paid services. However, the legal ways of increasing revenues are constrained to very limited sources. On the contrary, there are a wide range of illegal measures, which can be strange, such as temporarily charging township construction fees, pass-by fee levied on motorcy- clists and environmental protection fee levied on restaurants. These fees are collected and managed by township governments. Moreover, some sectors independently implement such charged programs where the direct income belongs to certain sectors or people. We call this sort of behavior “predation”. Western researchers point out the concept of “predator state” in the course of investigating government

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corruption in Africa and East Asia. In recent years, American political researchers like Thomas P. Bernstein conducting research on Chinese rural citizens’ tax burdens also uses the concept of “predator state”. The rationale of “predator state” is that governments seize public resources but supply no public services. Accordingly, governments enrich themselves instead of serving the public. We cannot define township governments as “predator states”, yet we have witnessed that since 1990s the predating behaviors have developed. Moreover, with the cancellation of agricultural tax and increasing fiscal difficulties, the predating behaviors continue unabashed. We believe, therefore, the predating scales and patterns may change. For example, some governing behaviors during the process of making a requisition of land actually imply predating behavior toward peasants. With the increasing number of quasi predator government and cadres, the conflicts between governments and peasants are inevitably acute. The key solution to eliminating predation is by implementing governments’ institutional reform that may help restrain government behavior. In other words, radically, endeavors should be put into place to weaken and deprive grassroots governments’ predatory rights and capacity rather than simply turning off their predating interests once their financial needs are met. Some grassroots governments’ responsive actions to financial difficulties are constructive to rural development while others are destructive. The essential way of relieving governments from difficulties is by developing the constructive aspects and restraining the destructive ones, thereby generating a new type of governance. Grassroots governments’ transformation will be a complex and time- consuming process and be an integral component of China’s local government reform. Specifically speaking, township reform will be initiated along with the reform of county and city governments. Thus, for townships, instant reforming measures might hardly come into effect and by no means is there a one-off solution. Given the present situation, two measures will be unfeasible. One is to completely dissolve township governments and dismiss cadres. The other is for the higher-level governments to take care of township governments’ total financial expenses. Completely dissolving township governments is

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unworkable from an administrative point of view. It also assumes huge political risks. Meanwhile, it is not a good choice for the central government to provide financial support for all townships staff. The issue is that, even if township governments obtain sufficient transfer payment, thereby raising township staff salary to the same level as urban white collar workers, does it mean that township governments have no problems or have no needs to reform? This is absolutely not the case. No matter how wealthy the central government is, it is not wise for the center to pay the salaries of all township cadres. If no institutional reforms occur, the central government’s financial support can hardly alter township governments into service-oriented governments endorsed by rural citizens. Furthermore, external fund supplies cannot be substituted for internal reforms. Thus, emphasis should be placed on both enforcing governments’ institutional innovation and implementing diverse public projects.

7.1.2. Path of reforms Generally speaking, the essence of the present problems with township governments lies in “township”, not “governments”. Or it is a government problem reflected at the level of townships. In light of this, township governments’ future is tightly related to reforming the Chinese government. Without systematic innovation of the entire government, township governments’ reform can hardly succeed. However, it does not mean that township governments cannot carry on reforms or will achieve nothing at all. By contrast, at the lowest level of the government system, townships are encouraged with breakthrough innovations to a wide extent. In fact, a range of local governments have already embarked on actions. Under the present circumstance, if township governments implement innovative reforms, that would be a huge contribution to China’s government reform. The main difficulty in township reforms is not what kinds of organizations to be set up, but a basic problem that there are excess personnel in the existing township governments. The townships’ powers and finances become weaker, and their employment of a large number of personnel triggers a range of problems. Hence, presently,

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the local governments’ reform plans mostly target at administrative reduction. The general case is that, based on arrangements of upper- level authorities, local governments embark on consolidating organizations and reducing staff. In addition, on the basis of certain standards, local governments repay the arrears of wages, fees, and debts and pay endowment insurance. To conclude: “it is well accepted that reforms will entail spending, but the point is that who should be responsible for affording the spending”. In nature, it means that if there would be no reforms if there is no money allocated toward it. A core spirit transmitted from higher levels of administration is that reforms of organizations must be based on the bottom line of social stability. The embarrassing truth is that the central government with insufficient funds urges local governments to reform, which leads to reform bottleneck. As a result, local governments have to adopt practical measures in response to the central government’s instructions. Furthermore, even if there are adequate reform funds, can reforms achieve ideal objectives? It is not necessarily so. In practice, many local governments input cost but fail to realize fixed objectives. Having seen reforms in several townships, some county party secretaries conclude that township reforms can be conducted separately. They do not approve of higher-level governments’ unified arrangements and requirements, especially their requirement for a deadline. They think that higher-level governments should stipulate to reduce the number of on-budget personnel in principle and empower local governments to seek solutions on their own. The unified requirements, rigid deadlines, and rushed staff downsizing, unavoidably burst into conflicts in a concentrated period of time. Moreover, after the reform campaign is off peak and a large amount of money is spent, the opponents’ reactions come back soon. Now that higher-level governments cannot afford local governments’ costs nor have the capacity to order local governments to follow uniform instructions, they had better give more freedom to local governments and let them implement reforms on their own. At present, higher-level governments frequently put up new slogans and requirements, allocate tasks, and conduct inspections, which confuse local governments and make it hard for them to handle. Primarily, higher-level governments

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should enforce self-improvement mechanisms prior to instructions on the requirements to local governments’ correction and advancement. Without higher-level governments’ improving, neither they nor local governments can perform well in reforms. The institutional roots of organizations’ problems mainly originate in higher-level governments. The number of on-budget personnel is decided without any legal instructions. But what counts is what kind of work higher-level governments and leaders value. Hence, a piece of document or even a speech can result in a new organization, an increase of on-budget personnel, or advancement of administrative level of an organization. And, local governments have to obey the rule. In the process of township government reforms, it is a principle that grassroots governments can have autonomous reform rights to reset and adjust organizations. However, higher-level governments’ documents may stipulate that a certain organization must be retained and even reinforced. Obviously, higher-level governments control resources but do not clarify the rule of resource allocation. Therefore, grassroots governments have to liaise with higher-level governments for more resources. Sometimes, resources can only be distributed to grassroots governments when there are corresponding grassroots organizations. In such conditions, the situation where higher-level governments stubbornly push for local governments’ reforms will certainly cause ineffective reforms and break the trust between superior and subordinate governments. Local governments’ leaders put forward the “separate actions” strategy for township reforms, which actually touches the core issue of Chinese government institutions and the overall situation of Chinese government reforms. With the continuous burgeoning of market economy, the major problem of governmental systems becomes apparent. The agreed opinion of grassroots leaders is that higher-level governments attain more power while local governments remain weak. The problem becomes more serious as the level of administration deteriorates. In terms of financial system, the central government allocates over-concentrated funds to local governments, who then allocate funds to local governments without any regularized and transparent rules. As a result, local governments usually visit the central government to implore for more benefits, which gives rise to

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corruption. Problems also exist within the inner system of local governments. The power of county/city level outweighs that of the township level. As a result, nowadays, townships are becoming less like governments. Government corruption is deeply rooted in the concentration of power. From this point of view, many grassroots leaders assume that the root of corruption is generated from the higher levels of governments. To sum up, the establishment of grassroots governments should be resolved based on the reconstruction of macro frame of government institutions. Generally speaking, township reforms are like the popular expression “crossing a river by touching the stones”. The problem is in ascertaining who would pragmatically initiate the reforms. Would only the central government take initiatives or would the local governments do so independently? At present, the preferred choice is for allowing the local governments do it separately. If only higher-level governments are allowed to touch the stones (as in initiating the reforms), the risk would be that lower-level governments may simply watch and miss critical opportunities. More importantly, when higher-level governments make mistakes, all levels of governments below them are doomed to end up with failures. If local governments touch stones separately, possible failures may not exert influence on the whole situation. Moreover, each local government may find distinct stones that best fit individual needs. Therefore, it is most important that higher-level governments do not set up many forbidden zones for township reforms or stipulate unified actions. Rather, they should let township governments themselves choose individual paths to wade across the river.

7.1.3. Challenge of reforms In comparison with the visible difficulty of grassroots government’s reforms, the invisible difficulty with the transformation of functions seems more complicated. The principles and plans of top–down township reforms all speak loudly about functional transformation, which implies a clear objective. However, relevant grassroots cadres are confused of how to realize this objective. Even the specific civil

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servants whose responsibilities include designing various schemes, have complained about their work. It is not too hard to clarify the objective of functions in the schemes, yet nobody knows how to achieve such an objective. Ever since the reform era started, the government has played a leading role in economic development. In fact, it has become the main body of economic development. This function not only brings about high economic growth, but also results in many problems, primarily the neglect of public service. The shortage of public services and the inferior quality of service delivery have led to governance crisis. Although economic growth is kept at a high speed, the government has overlooked the fulfillment of social responsibility. Consequently, there is a sharp decrease of citizen trust in the government, which can be generalized as a “trust crisis”. At present, the toughest challenge is that governments’ orientations should be reasonable and effective in the governance process. The central government advocates a scientific outlook on development and building a harmonious society. Such an outlook can target at redressing devia- tions from previous developments, particularly in government functions. Instead of problems with development notions, it is more of an issue with government’s functional transformation. The foundation of government’s functional transformation is not the notion, but the system. Admittedly, it seems easy to state the ideology. The government behavior patterns do not stem from politicians’ ideology but from the government’s operating mechanism. Nowadays, although it is widely agreed that government functions must be transformed, the basic government operating mechanism has not yet been advanced. To be specific, the change in government’s operating mechanism essentially implies the process of institutional innovation. The government’s main objectives still focus on the pursuit of GDP and fiscal revenue. By contrast, there is a lack of efficient institutions to ensure the provision of public services. The government’s operating mechanism has a distinct feature of administrative coercion, which is shown as a mode of government mobilization. Thus, conflicts exist between the slogan advocated by the government and its own operating mechanism. In other words, politicians’ outline

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conflicts with bureaucratic operation. Against this background, the problems with township governments break out. On the surface, the problems seem to concentrate on institutions, staffs and financial difficulties. But the profound problem is with the government’s operating mechanism. In light of this, the transformation of government functions is not only about the township level. Both administrative structure and political structure determine government’s operating patterns. To construct a government that is oriented toward public service calls for simultaneous reforms in administrative and political aspects. Only the increase and decrease in the number of staff and organizations are far away from the essentials of the reform process. As for government leaders, making up their minds to carry on positive reformative adjustments is a huge challenge requiring great intelli- gence and courage. In the course of reforms, in comparison with the difficult transformation at the macro and higher levels of the government system, there is less difficulty at the micro and lower levels of the government system. As a result, there may be an appropriate breakthrough at the grassroots level. At the bottom of the government systems, the grassroots level is prone to initiate reforms which, and even if these reforms get into trouble, they may not have serious impact on the local economy. At the moment, the grassroots governments are trapped in serious crisis and are searching for a way out. But a crisis to some extent is a motivation for reforms. The searching process itself can be seen as a breakthrough of reforms and hopefully, the grassroots governments can make some meaningful changes in government reforms.

7.2. Future in View of the Reality The development of grassroots governments’ prospects will be a historic evolution process. We have no intention to predict or suggest readymade reform plans. However, in face of the heated issue of what course to follow for grassroots governments, this research could be of some help. We are committed to conduct a close observation on township governments’ future under practical conditions. In other words, we will probe into the possible future out of real changes.

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7.2.1. Realistic choices of reforms This research finds that township governments are suffering from upper county governments’ suppression, parallel organizations’ exclusion and inner corrosion of township fiscal system controlled by county governments. Hence, township governments thoroughly lose independent power space as a level of governments. Many township leaders complain that township governments’ nominal functions out- weigh their essential functions, which renders such township governments fake. From the legal angle, township governments are neither empowered with administrative permission nor administrative penalty. In fact, township governments are no longer a power entity. Now it appears that under the condition of decentralized decision making, the current township governments will take on a range of specific forms. Some may develop into fully functional township governments. For example, in more developed eastern areas, a few of townships enjoy high-speed economic development and have a large population with more flowing migrants than locally registered residents, where fiscal revenues far exceed that of a county in the middle- west areas of China. Besides, these townships have high needs for infrastructure, public services and social management. In such areas, the approved governmental structure and on-budget personnel positions are far away from meeting the needs of management and services. Taking examples of the developed provinces of Guangdong, Zhejiang and Jiangsu, a town with a population of 50,000–60,000 including 20,000–30,000 permanent residents usually has hundreds of large-scale enterprises. With respect to security administration, employment, management and social security, prior principles of institutional and personnel arrangement cannot sustain the normal operation of social economy. In view of this, in such areas, township governments should be strengthened rather than be dismantled. To be specific, township governments need improvements in institutional and administrative functions especially in need of enforcement power. In some remote regions, due to the small size of the counties and townships, there is less workload for social and economic management. Hence, it is unnecessary and repetitive to set up township

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governments. Instead, county governments can directly exert administration without township governments. We believe that, in terms of specific setting of township governments, the decision-making process should be decentralized to local levels rather than central government issuing a unified rule on the number of on-budget personnel. As to the township governments with average conditions, according to their actual needs in social and economic activities, the majority of them may become the county/city governments’ branch agencies. There are two basic reasons. First, seen from township governments’ current operational conditions and granted authority, they have almost turned into branch agencies. In other words, the effective functions of township governments are identical with the functions of branch agencies. As a consequence, it is reasonable to adjust township governments’ functions to the orientation of assisting higher-level governments with social management and public services. What is more, no extra burden should be posed to township governments for promoting such unachievable objectives such as local economic development and fiscal revenue growth at the township level. Following the reform path of branch agencies, township government reform would succeed when mature conditions are met. Second, under present conditions, from the viewpoint of real needs for rural development, an administrative level between the county/city and village is necessary, while complete and abrupt removal of the level appears unreasonable. In the period of economic transition and social transformation, a large amount of demands emerging in public services are to be met by governments and social agencies. Besides, governments are obliged to handle regular work comprising monitoring and managing social affairs. If all concrete affairs have to be handled by county/city governments, the latter can hardly manage smoothly and rural residents are less likely to live a convenient life. From the perspective of public services, a few number of staff members in a township branch agency are able to cope with administrative affairs on behalf of governments. Meanwhile, it is the responsibility of these staff to respond to the needs and special circumstances of rural communities. Some scholars put up potential reform measures to bring

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the village self-government up to the township level and implement township self-government. In conclusion, endeavors are to be made in above orientation, and reforms should be gradually pushed forward with specific methods and strategies. Else, both the state and citizens would be trapped in an awkward situation if reforms are launched under top–down instructions.

7.2.2. Future in uncertainty Since the founding of China, township governments have experienced an upheaval fate. At the beginning of holding power, the Communist Party of China set up township governments. With the advent of culmination of agricultural collectivization, township governments were absorbed into the institutional structure of people’s communes. After the establishment of family-managed farming, township governments made a comeback in the mid-1980s. At that time, decision makers believed that the superstructure should be matched with economic foundation and family-managed farming should be applied to the reconstruction of township governments. In the process of rural reforms in the mid-1980s, the key issue was to reconstruct township governments and, particularly, to establish township finance and to make the county’s vertical branch agencies governed by township governments. It is commonly called “clarifying the relations between tiao (lines) and kuai (pieces)” or “tiao is submissive to kuai”. At that time, people were dedicated for constructing solid township governments. However, a few years later, the reform circumstances of township governments hugely changed. During the adjustments of inter-government financial relations, township governments were oppressed to the edge of survival. The reforms in those years were fixed on the orientation of weakening township governments. In doing so, township governments turned from reform’s outcome into reform’s target. Township governments’ rise and fall stemmed from reforms. Commonly speaking, township governments were given birth by reforms yet may die from reforms. This phenomenon has some implications for us and the most direct one is that during 20 years of reforms, township governments did not evolve

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in accordance with the path designed by the decision makers, which may imply that the reform design is unsuccessful. Furthermore, if we admit that there are inherent laws in social reforms and development, can these laws be understood and mastered? The process of rural reforms reveals that none of the family-managed farming, township enterprises and large-scale migration are results of reform designs. On the contrary, according to decision makers’ designs, these innovative measures used to be suppressed as they were identified as actions against the mainstream of social development. The decision makers’ wisdom is reflected in acknowledging and supporting for rural citizen’s exploration rather than providing a fixed development orientation. Accordingly, practical lessons can be learned by decision makers to give grassroots government ample opportunities and space to explore and find specific development path rather than pre-determine reform designs. Township governments are fighting for their future and demon- strating a variety of governmental behaviors in the process. However, not all the behavior benefits rural citizens. For the higher-level governments, the most significant task is to regulate township governments’ behavior and ensure that their behavior evolve at the trajectory to meeting rural citizens’ expectation. This evolving process represents the innovation of administrative mechanisms and continuation of institutionalization. It proves that grassroots governments’ future will not be generated by researchers’ design. Marx said that social development is a natural historic process, and emphasized the material movement feature of this process as well as its independence from human beings’ will. In the author’s opinion, government transformation is such a process as well. During this process, irrespective of grassroots governments’ specific organizational forms — a complete level of administration, branch agencies of grassroots governments, or advanced grassroots autonomy — the basic principle is that government reform must be based on practical changes and needs of social and economic conditions. It should not be a hollow principle. With current transformation of economy, society and politics in China, local and grassroots governments have more favorable opportunities to timely react to real life than the central government. Therefore,

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local governments should have enough autonomous space. Only in this way, China’s exploration of new governmental systems is possible to have fewer detours and more smooth.

7.3. Macro Capture of Micro Reforms The above-mentioned practical choice of reforms is the analysis on the basis of the existing government framework. From a long-term prospect, the government framework needs a transformation as well, which is an institutional requirement by Chinese social and economic changes. In terms of grassroots government reform orientation, the dominant trend is grassroots autonomy, which is the main social trend and the basic component of the Communist Party’s political philosophy, namely the realization of “people to take leadership” in governmental systems. The future forms of grassroots governments should be the outcome of interactions between governmental systems and grassroots communities. From the macro view, there are three aspects of relationships directly influencing grassroots governments’ evolution.

7.3.1. Central and local government relationship In the mid-1990s, the central–local relationship was a very heated research field, especially among overseas scholars. Some approached it from the fiscal perspective, while others from the political perspective. Since the 2000s, there have been an increase in research interests in political aspects, and some researchers have even pointed out the issue of federalism. In recent years, researchers have started focusing on fiscal relationships. The basic problem is that the tax-sharing system reform in the mid-1990s made the central government gather a large amount of financial resources. The tax-sharing process is a negotiation process. To be specific, the new tax division system determines how much fiscal revenue governments can receive. The lower the level of governments, the less bargaining power they have in negotiations, and the less revenue they receive. Hence, in local

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government systems, the financial conditions below the provincial level become worse. At that time, there were various jingles describ- ing such financial conditions. For example, “The central finance is bursting with happiness; the provincial finance feels proud of itself; the municipal finance manages to survival; the county finance sways; the township finance cries”. Meanwhile, under the power mode of top–down centralization, the central and local governments all assign work quota to grassroots governments, such as construction of schools for compulsory education, construction of facilities for birth control, and other assignments related to departmental interests like subscription to magazines and building the communist’s activity room. When failing to achieve the quotas, the grassroots governments would face political penalty. In this process, higher-level governments are merely responsible for assigning work quota, and grassroots governments have to bear fiscal expenditure by themselves. In order to survive and achieve the quota, there are two economic solutions. One of them is attracting investments to accelerate development and expand fiscal resources. The other is charging a range of fees toward rural citizens. Consequently, heavier burdens on rural citizens resulted in strained relationships between peasants and grassroots governments. The central–local relations evidently and directly exert impacts on township governments’ survival conditions and behavioral logic. The central government and local governments are responsible for grassroots governments’ problems. With the increase of the central government’s fiscal transfer payments and even the cancellation of agricultural tax, obvious changes have taken place in terms of grassroots governments’ survival strategies and relations between grassroots governments and rural citizens. However, the basic pattern of central–local relations still restricts or regulates grassroots governments’ behavior and their future. At present, the fiscal problems are as follows. During the process of transfer payments, the central government gathers too much financial resources and is willing to distribute resources to lower levels of governments. However, the opaque distribution rule and non-standard procedure bring about corruption and become the reason for local governments’ distrust of the central government. Through the

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concentration of fiscal power, the higher-level governments exercise administrative control on grassroots governments, which leads to conflicts between various levels of governments. For example, a western impoverished township intends to build schools, and the concrete proposal needs to be approved by relevant central departments. Even the change in number of toilet pits must have the approval from higher-level governments. Some rural middle regions have planned to construct biogas generating pits, and relevant provincial departments straightly ratify individual households’ applications. Even moving biogas generating pit from one household to another has to be reported and approved. This process not only loses efficiency but also breeds corruption. The nature of fiscal problems is the issue of government power division. As a result, in order to radically clarify grassroots governments’ basic power and orientation, we need to make efforts to adjust the framework of relations between the central and local governments as well as various levels of governments.

7.3.2. The party and government relationship More than 20 years ago, during the 13th National Congress of the Communist Party of China, the issue of separating the state from the party was clearly raised. In the following 1–2 years, some concrete actions were initiated at the center but were stopped before spreading to a larger scale. Nowadays, there is no further development either in theoretical or in practical fields. From the historical viewpoint, the non- separation of the party and the state has its necessity and rationality. The new China was founded by the Communist Party. The party was founded first, the country second. On the foundation that the party established the state, it is inevitable and essential for the party to replace the state. Under this historical condition, competitions between political parties are not existent. Therefore, it is not reasonable to blame China for its shortage of western political party system. American two- party system gradually formed in the process of competition of different political powers after the founding of the state, which was different from the Chinese circumstances. It is widely admitted that history should not be censured as fixed facts. At the moment, shall we persist

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in non-separation of the party and the state? Furthermore, if the non- separation cannot be sustained, how long should we hold up to it? What is the proper timing for a reform? All these questions should be examined profoundly according to the reality of China’s political development. As seen from the last 20 years of reforms, division of labor between the party committee and the government at the township level appears to be operating in an opposite direction to the policy design. On every level of local governments, the party–government relationship evolution does not show the trend of separation. At the grassroots level, the party committee’s work tends to demonstrate an increasing administrative feature. For example, the party organization departments in some municipalities directly lead the landscaping work and other work belonging to various departments. Some local com- missions for disciplined inspection are responsible for evaluation of special funds programs from higher-level governments or for examination of environmental protection, thereby becoming relevant governmental departments’ direct leaders. In terms of direct effects, the administrative measures of party committees are effective because party committees have more influential power than those of governmental departments. In townships, the integration of party committee and government is obviously enhanced. Under this background, many local leaders always adhere to their suspicions, “Why the party should be separate from the government?” or “There is no need to separate government from party”. From the long-term prospect of governmental system reform, maybe this pattern of party–government relationship will not sustain for a long time. The realistic issue is that if party leaders become government leaders and party departments turn into administrative managers, party committees will develop into administrative executives, and the party’s political status will alter. As contradictions and disputes are unavoidable in governance, is party committee going to be a subject of administrative litiga- tion if it stands at the front-line of administration? This is a problem hard to be coped with. Under the condition of non-separation of party and government, if party committee has administrative legal obligations, the ruling party’ political leadership status actually does

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not exist anymore. If party committee does not undertake administrative legal responsibilities, the government will turn absolutely lawless. Meanwhile, if all negative consequences in the process of administration are to be attributed to the party, the party image will be threatened and ruined and the party authority will be greatly weakened. At present, the non-separation of party and government at the grassroots level works fine. But fundamentally speaking, party–government relations need to be clarified in the political system. The clarification process will certainly exert direct impacts on the basic framework design of grassroots governments. To be concrete, the outlook of grassroots governments relies on the explicit definition of party–government relations. Today’s ambiguous state of party–government relations is far from the ideal objective.

7.3.3. State and society relationship Generally speaking, the central–local relations and the party–government relations belong to the internal issue of the state system, but the state–society relations pertain to the state’s external relations. During the governance process, the state should not close itself to the society, but should keep active interactions with the society. For the state, the primary principle of carrying on social management issues is to meet social needs. In early 1960s, China suffered from a severe famine which caused millions of death and left a deep impression to many people. By contrast, in the 20th century, it is hard to imagine such a miserable famine. The state ideology aims to serve the people. But lessons need to be learned from the huge tragedy. Undoubtedly, it was a significant fault of the state in social management. From the institutional perspective, the reason to the fault was the lack of democracy. Under the natural and economic conditions at that time, if rural citizens had effective expression channels, millions of lives could have been saved. For example, the people’s congress system could have been effective to influence top decision makers. Or if there were freedom of information and speech, the phenomenon that people were dying from starvation could have been spread and criticized in the society, and the huge tragedy could have been avoided

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or largely lessened. While the horrible tragedy was happening, the media was flooded with articles that extolled the good life and flat- tered the leaders. This shows that the state was severely cut from the society. Democracy can play an important role in avoiding disasters for citizens. As Amartya Sen contended, democratic practice can spread the information with immense impacts on the policy to prevent famine from happening. Therefore, the power of media can never be ignored. Progressive media is the main source of the basic conditions in remote regions threatened by famine. Particularly, it may be inspired by a democratic system to disclose facts that could place the government in an awkward situation. By contrast, authoritarianism governments usually remove those facts in the name of censorship.1 The same rationale applies to the development of the people’s commune system. Though detested by rural citizens, the system had existed for over 20 years under the state coercion. It again highlights the state’s isolation from the society and serious confronta- tion between the state and the citizens. After several years of reforms, nowadays the state has made great progress to make national policies accustomed to social lives, particularly in terms of enlarging the space for democracy and freedom. Meanwhile, in a range of aspects, there still exist the institutional arrangements that are inapplicable to social needs. Due to insufficient restraints from the society, the state behavior is uncontrolled. Government officials have been engaged in so many irresponsible practices and even malfeasance and corruption. Democracy is the most effective approach to streamline the state– society relations and is a basic rationale by the ruling party. As to the grassroots governments, it is significant and urgent to establish an operating mechanism based on democratic institutions. At present, the top–down governance represents the dominant trend. The main reason is that a large number of people believe that if higher-level governments do not exert strict controls, grassroots governments will encounter more problems. As a result, there is a logic circle that higher-level governments do not trust lower-level governments and the central government does not trust local

1 See Sen (2002, p. 177).

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governments. Accordingly the central government gathers the power belonging to provincial governments, and provincial governments gather municipal power. The relations of city–county, county–township and township–village, may be deduced by analogy. Consequently, grassroots governments maintain less power but assume many responsibilities and high political risks. Actually, it might not be beneficial when the power is concentrated in higher-level governments. Centralized power increases the level of vested interests of civil servants, which gives rise to government corruption. The same problems exist in the party–government relations. The party committees do not have trust in the governments, so they take the government authority. Up to now, the phenomenon that concentration of power at higher- level governments and within the party committees does not fade out but even becomes more obvious and serious on many fronts. This situation is not sustainable and may lead to severe problems. It is a significant hurdle to political reforms. From a long-term perspective, over-centralized power must be altered, and citizens and the society will exert restraints on grassroots governments. To conclude, grassroots governments eventually should be held accountable to the citizens. The process of establishing the mechanism of accountability by people is a process of establishing democracy. China does not have a tradition of democratic political culture. But political culture is not changeless. In history, China suffered from imperial autocracy for over 2,000 years but could not bear it anymore in the late 19th century and the beginning of the 20th century. It can be attributed to the change of political cultural and national conditions. The foundation of such changes is concerned with the changes of social economic conditions. Nowadays, through contacts with rural citizens and migrant workers, we strongly feel that the Chinese citizens are changing rapidly and more and more people have recognized the importance of democracy and are pursuing democracy. Life tells the truth that democracy is the security of people’s own rights. The fact that the mass are trying to understand and pursue democracy is what is known as the historical trend. The basic situation of grassroots governments will be profoundly influenced by the development of Chinese grassroots democracy.

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Government Functions and Alienation of Institutions

The grassroots government plays an important role in promoting China’s rural development as well as rationalized its structure since the initiation of reform and opening up in the late 1970s. The progresses include the gradual improvement of standardization of government administration, rationalization of state market relationships, and improvement in government transparency. However, though the township government has built up the structure and formal organizations of a modern state, further investigation suggests that there are serious defects with its operation mechanisms and some degree of structural degeneration, which I call “local government involution”. Local government involution has the following characteristics: it functions as a corporation instead of a public institution, it has greater autonomy and is out of the control of both the voters and higher-level government; its authority structure is fragmented and not well integrated into the state power; its behavior model is characterized by campaign style (yun- donghua), i.e., using political mobilization to replace modern administration, therefore, it is hard to achieve routine government operation. Factors such as corporationalization, fragmentation and the campaign style work together and cause each other, thus trapping the local government into some kind of “political dilemma”, i.e., continuing economic development with political degeneration.

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The mechanism behind government involution is institutional alienation. In theory, government should provide public services according to people’s demands. However, in reality, the government gradually becomes more and more autonomous and works mainly for its own interests, it neither represent the society’s will and interests nor implement the higher-level governments’ ideas and policies. Institutional alienation works through irregular operation of rules. To contain and reduce the institutional alienation is a major challenge of innovations in the government.

8.1. Grassroots government and Rural Development 8.1.1. Historical progress The grassroots government has pushed reform, as well as reformed itself, since the beginning of rural reform. Reforms have caused behavioral changes among the government cadres. Some of these changes are intentional, while others are not. Regardless of whether these changes are intentional or not, they are repeatedly felt and experienced in the cadres’ daily works. The cadres do a cost benefit calcu- lation of all the choices and form new role identities for themselves and the government. There have been at least three significant positive changes in the grassroots government operations since 1990s. The first change occurred when the grassroots governments redefined its economic role. Since the beginning of reform, the grassroots governments have been emphasizing the promotion of economic development, but now their strategies have changed significantly. Before mid-1990s, the grassroots governments’ strategy to promote economic development was to run enterprises and make investments into projects directly: both the township governments and village committees worked hard to be the owner and manager of industry projects. The township and village leaders directly controlled the enterprises as chairmen of CEOs of various boards. Things have changed significantly since the mid-1990s. Though the township and village governments maintained economic development as their priority and wanted more projects, their strategies changed from directly

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running new projects to improving the investment environment and inviting investment, especially by providing high quality public goods. This change in government role is reasonable because it works better under market economy. To correctly define the government role in economic development is very important and so far the government is on the right track: as the operator of public power, the government leaders should not take positions in corporations. This inspiring change, however, is not based on the grassroots government officials’ theoretical reflection of how the governments’ role should be under the market economy, but based on the practical lessons they learnt from directly running corporations in the last decade. The lesson was that most government run corporations and projects went bankrupt or been forced to privatized. Working together with other factors caused serious government debt crisis that exists until today: some township governments have debt value of millions or even tens of millions Yuan and some village committees have debt value half or a million Yuan. When the government retreated from running enterprises directly, it not only provided better public services, but also avoided direct conflicts with the peasants and enterprises. In sum, marketization has helped in reshaping the grassroots governments. The second change is improvement in democratic governance and rule by law. Nowadays, many township leaders insist that the peasants are still not ready to run direct village elections because “the peasants’ qualities (sushi) are too low”. But it is hard to say what level of peasants’ quality is acceptable for local democratic governance. The good news is such a suspicion does not stop the government and village officials’ smart use of some democratic methods in village governance. So, there is a paradox: On the one hand, the grassroots officials complain that the peasants’ quality is too low for democracy, but on the other hand they use democratic methods to solve difficult situations and get the peasants’ trust. The grassroots officials also acknowledge that the villagers are more aware of laws and policies, sometimes even know more than they do, therefore it is important to use the laws and policies while working with the villagers. Some grassroots governments are beginning to check the laws and policies, or even invite lawyers to attend meetings, while formulating new policies. The

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grassroots officials are searching new working models of grassroots governments, which assumes that the villagers are capable of participating in governance and democratic mechanisms that are considered as good ways to solve problems and improve performance, intentionally or unintentionally. The grassroots officials’ use of democracy is instrumental rational rather than value rational. They strategically choose democratic or non-democratic methods for serving their goals and interests. Under some situations, the officials believe that the villagers cannot elect good village cadres because the election can be influenced by many “unhealthy” factors. Therefore, direct election is not only troublesome but also obstructs the government’s work in leading the village. Under some other situations, however, the grassroots officials grant concessions to the villagers and use democratic methods for resolving disputes, when the villagers display radical behaviors. For example, when villagers suspect cadre corruption, the officials may agree or even offer to open up the village accounting records, or when villagers demand to remove some village cadres, they will ask the villagers to vote. In our fieldwork, an important change we find is that the village representatives have more frequent meetings now and the village party committee or village committee always asks the representatives to discuss troublesome issues. In short, the grassroots officials have a paradoxical attitude toward democracy, which reflects both in the limited progress of village democracy and in its bright future. Despite the academia debating whether direct democracy can integrate rural China or not, and township leaders complaining about laws and policies of grassroots democracy attracting much trouble, the grassroots officials’ daily usage of these democratic methods undoubtedly suggests that democracy is becoming an important working method in some areas and may grow steadily in rural China. The third change occurred when social service became an important task of the township government. With the abolition of agriculture taxes, the township government became free from the task of collecting agriculture taxes, and disputes caused by agriculture taxes also disappeared. At the same time, social services related to the improvement of the villagers’ life assumed significance. These services

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included the following: implementation of new rural cooperative medical system, building of rural social aid and subsistence allowance program, pension system, improving free rural compulsory education, implementing central government’s fiscal subsidy for agriculture production, etc. At the same time, maintaining social stability in rural areas became a more important task. This change in government tasks was mainly caused by the central government’s policy adjustment, instead of by the grassroots government. However, this change was not a comprehensive one because it only changed government’s daily routine, without changing its operation mechanism. To understand the grassroots government better, there are several important questions needed to be answered on their operation mechanisms.

8.1.2. Theoretical debate The government’s role in economic development is a core concern of political economy. The classic political economy theorists argue that what the government should do for economic development is to provide a stable international environment, such as protecting property rights through laws for economic development. The East Asian countries’ economic miracles in mid- and late-20th centuries provided different development models than the ones suggested by the classical economy: the East Asian states not only provided stable international environment and protected property rights, their governments directly intervened in the market behavior at micro level through industry policies, fiscal policies and financial policies. Chalmers Johnson (1982) uses “developmental state” to analyze the role of Ministry of International Trade and Industry (MITI) in economic development. The development state is the third developmental model between the Soviet Union’s planned economy and the United States’ free market economy: Here, the government plays a leading role in economic development, but it differs from comprehensive control; the market plays an important role in promoting economic development but it differs from the US model. A developmental state uses selective industry policies for promoting some strategic industries and economic development: (1) the government asks/commands the

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banks to provide products at low interest rates against bank loan to enterprises for upgradation or expansion; (2) the government sets high tariff barriers for protecting the local producers; (3) the government uses tax breaks and financial aid for supporting some national enterprises. The key for a successful developmental state lies in the Northeast Asian states’ characteristics: the politicians rule (providing enough space for an autonomous government for taking initiatives) and the bureaucracy governs; a small but competent bureaucracy; and a “pilot agency” like MITI. Contrary to a developmental state is a “predatory state” or “Kleptocracy”. Predatory state is based on some African countries, where the government serves the interests of the ruler and some related interest groups for exploiting the society. In a predatory state, the ruler’s personal interests are more important than public interests and, therefore, the government lacks the willingness for promoting sustainable development. A predatory state restricts rather than encouraging private enterprises, and collects government revenue at a higher rate than the GDP growth rate. For models of government business (or interest group) relationship, besides “ developmental state” and “predatory state” models, there is a “regulatory state” model best reflected by the US model. A regulatory state does not intervene in the market directly, but tries to influence market and enterprises by formulating regulations and law. A regulatory state does not cooperate with business but plays an independent role as a regulator. Scholars of China studies use the developmental state theory to explain China’s rapid economic development. Since China’s economic development after the reform and opening up is significantly associated with the government behavior, it seems reasonable to consider Chinese government as a developmental state. However, further examination suggests that while other East Asia countries are ‘ developmental states’ at the central government level, in China, however, the local governments play a similar role, therefore, they are known as the “local developmental states”. Jean Oi uses “local state corporatism” to analyze the micro mechanism of local developmental state.

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Oi argues that the rapid economic development in rural China can be better explained by government business cooperation based on collective ownership than by privatization, which she calls “local state corporatism”, i.e., local government works as a diversified corporation by coordinating economic units within its jurisdiction. She finds that local government works like a corporate in many aspects where the officials behave like board members. From a sociology perspective and based on a case study of Daqiuzhuang, Nan Lin’s “local market socialism” complements Oi’s local state corporatism by arguing that we should study the economic system under reform through hierar- chical collaboration, market regulation and local coordination. The last factor, local coordination, is the most important factor that is based on local social network, especially family and relative relationships (Lin, 1996). Different from “local state corporatism”, “local market socialism” introduces family and social network into analysis. The supreme leader’s authority comes from his control of all the economic, political and social resources within the community, instead of the top–down political power and ideology within state hierarchy. Vivienne Shue’s study revises and complements the local state corporatism theory through a study of Xinji city of Hebei. Shue argues that local government follows the ‘developmental state’ model instead of the ‘corporate state’ model: Local officials promote regional economic development by providing high quality infrastructure, bank loans and by establishing connections with outside market or/and organizations, rather than directly intervening in the corporations’ market behavior. She finds that in traditional China, each family (clan) or village is a natural autonomous “self governed” community, which forms a “honeycomb structure” thereby rendering the state ineffective in integrating and mobilizing resources in rural areas. Things have been changed in the reform and opening up era. Marketization has expanded the villagers and cadres’ networks and market accesses. Therefore, the traditional cell-like honeycomb structure has been destroyed and replaced by a web-like structure. The local cadres’ role moves from paternalistic local politicians to corporation managers, who are responsible for economic development and seeking new networks and opportunities. Shue calls the local cadre as “cadre/

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businessman”. When involved into the market, these state agents work independently but deviate from the direction of serving the state (Shue, 1998). Though many scholars have appreciated the local governments’ positive role, there are some scholars who have found its negative role in economic development. Thomas Bernstein and Xiaobo Lü (2003), for example, asked the question: Why China’s development strategy causes tension among peasants, central government and local governments? They argued that though the central government tends to support the peasants’ requirements, it is unable to solve the peasants’ high tax burden by building a fair and trustworthy institution. The population size and great economic, social and ethnic diversity make it a very hard task for policy making and administration. What makes it worse is that China is a unitary country, where the central government takes more responsibilities than a federal country, and it makes same rules and policies nationwide regardless of local diversities. The peasants’ tax burden was very serious in “rural provinces” of central and western China, but not in the industrialized eastern China. This was due to the fact that the central government could not define a policy for different regions in China. A huge bureaucracy has many defects. The scholars argued that the Chinese government has two faces, a predatory one and a developmental one: though China’s rapid economic growth rate reflecting the government is “developmental”, however, prevalent corruption and clientalism in government business relation suggest that the predatory side is also very important. A major concern of these scholars is the local government’s role in socioeconomic development, especially whether it has moved from promoting economic development to predate the society, or moved to promote comprehensive social development. While Bernstein and Lü are pessimistic and worry about the predatory behavior of local governments, Oi is optimistic about China’s local governance. The real world has changed significantly since Bernstein and Oi did their researches. The agriculture taxes that Bernstein studied have been abolished and the township and village enterprises (TVEs) that Oi studied have declined, however, the questions they asked are relevant today. Though the agriculture taxes have been abolished, the tension

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between local government and peasants exists and is caused by the former’s predatory behaviors, for example, land grabbing. Some other problems get more complicated. Though TVEs no longer exist today, the complicated government business relationship exist, the local government leaders do not run enterprises directly today but they still intervene in the management of enterprises directly in many ways, which lead to wide and serious worries. China’s local government operation and local governance continue to face severe challenges, and how to deal with these changes will shape the future of local governance.

8.2. Involution of Grassroots Government Involution is a concept contrary to evolution, Geertz (1963) defines it as a culture pattern/model, where both the external economic demands of the Dutch rulers and the internal pressures due to population growth led to intensification rather than change in Java, Indonesia. Philip Huang uses involution to explain China’s socioeconomic change in the 19th and 20th century. Huang calls the economic model of achieving economic growth through increased labor in a limited land, a model of decreased marginal output, as growth without development, or involution. Huang argues that it is possible to increase family income through full use of family labors, or increase working days of each labor. But it does not mean increase in produc- tivity, which could only be achieved by improvements in the organization, technology innovation or higher capital/labor ratio. In other words, involution explains the paradox of growth without development (Huang, 2000, p. 427). Based on these researches, Prasenjit Duara (1988) proposes the concept of state involution, which, he argues, is similar to agriculture involution in many aspects: growth without development (or improvements in efficiency), reproduction and maintenance of some unchangeable patterns (for example, profit making state broker). The difference between them is that state involution has a daily conflict between rationalization and involution, and malfunction goes with involution. For taxation in early 20th century, Duara argues that the state did not try to improve tax revenue by

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improving efficiency, but by expanding the organization and adding new taxes. The consequence was that the fiscal revenue increased at the cost of increasing “profit-making brokers’” corruption. The state involution in fiscal revenue generation reflects the failure of China’s state building in the first half of 20th century. In studying today’s grassroots government, we can derive many inspirations from these researches. The author’s investigation suggests that the operation mechanism of local government is trapped in a path dependent process of “ involution”. Several rounds of reforms of local government in the last several decades failed to achieve the reform goals. Not only the government functions, power and authority, but also its operation mechanism, are stereotyped into a mechanism that combines corporatism (in function), movement style (as operational mechanism) and fragmented authority. This mechanism has evolved in the last several decades and is locked into a path dependence pattern, therefore, hard to be changed within the government system. The man- dates for reforms from higher-level government could not be implemented as such campaigns always ended as some “movements” or “slogans’; the new institutional arrangements were adopted but not used, therefore, remaining non-functional. Thus, government operation mechanisms keep reproducing and maintaining themselves leading to government’s malfunction and no real political development. As a result, the state involution blocks further government reform.

8.2.1. Corporatism as government function Developmental state cannot sustain for a long time, it is a transitional form that works during the short period between “undeveloped” to “developed”. After a period of development, a developmental state faces new challenges and will be hard to maintain. A successful developmental state should be transformed to a regulatory state, as the Japan case suggests. The question is, if the Chinese government is a developmental state, is it the time to change its economic intervention to regulation?

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The core operation mechanism of local government is to pursue GDP growth, especially to increase fiscal revenue. Local governments treat investment and business opportunities from outside as its number one task and overemphasize the function of promoting economic growth. To make a metaphor, we can take the local government as a corporation, GDP as the government’s sales and fiscal revenue as its profit. The government’s obligation in providing public services occupies the second rank after the “economic development”. Words like “cheap land”, “tax breaks”, and “cheap labor costs” are frequently used in the local government leaders’ speeches. The investors from outside are the government’s (as a corporation) valued customers resulting in neglect of local residents’ demands. When the business interests conflict with local residents, the local governments tend to protect the business, not hesitating to violate the law. There are some funny slogans on the walls which says “if you make trouble with invited investments and businesses, you are making trouble with all people in the county”. The investment friendly environment promotes industrial development but does not define the government role, making it a player in the market instead of a regulator and public service provider. Government officials care for such enterprises and riches more than the public. The public policies too favor the rich instead of the poor. When the government is deeply involved in the market, the boundary between market and government is blurred and a fair market economy is hard to build. A government believing in corporatism weakens its responsiveness to societal demand because its channels are closed to its public. Public demand can only be heard through some uninstitutionalized, even radical ways, like petitions and mass riots. The government is unresponsive even after it hears public’s demands, mainly because the government officials have pressures and incentives to invite more investment, rather than provide public services to local residents. In short, the government functions as a corporation. Local state corporatism plays an important role in promoting economic development, but it also causes a governance crises: (1) Large amount of resources are used for local economic development but public services remain underprovided. The current cadre evaluation

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system values regional economic development, therefore, local government has strong incentives to mobilize all resources for promoting economic development. At the same time, a rural society under an authoritarian state is too weak to create institutional constraints for the local government or to make it to provide public goods. (2) Local government is unable to solve the tensions and conflicts in the grassroots society. It has low incentives to resolve social disputes and sometimes directly causes conflicts as in the land grabbing disputes. (3) The local government does not enjoy adequate social and political support from the society because it does not provide enough public services. A corporate-like local government has strong autonomy, which has two aspects. The first aspect is its autonomy toward the central government, mainly because the local government has autonomous fiscal power under the tax sharing system. The second aspect of local government autonomy is its autonomy to the rural society where it acts autonomously with low responsiveness to social demands. In short, the local government uses the institutional resources without taking the responsibilities and avoiding the institutional constraints.

8.2.2. Fragmented government authority The local government operates in a fragmented way, which means its administration system and political process are badly coordinated where the different parts of the government and the different stages of its processes are not well organized. The concept of “fragmentation” was first used in the studies of American local government. The term has two definitions. The first definition is that a region is divided into different areas with different characteristics, for example, areas of the rich and areas of the poor. The local government provides unequal public services to these different areas. The second definition refers to the problem where there is lack of sufficient government departments for important public issues. This may be due to the fact that in a large government, a government function may be shared by many departments, leading to a poor division of responsibilities and powers between the many

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departments. The fragmentation also refers to the de-concentration of powers among the executive, legislature and judiciary, as well as between different levels of government. Lieberthal and Oksenberg (1988) first used “ fragmented authority” to analyze Chinese politics. In their study of policy making in China (energy policy as their case), they found that Chinese politics was characterized by personal rule with low levels of institutionalization where the decentralization during the reform period worsened matters. The Chinese government is structurally fragmented and the policy making process is disjointed. There are three reasons for this fragmented authority: (1) Weakened ideology. As the shared norms that facilitate policy making and implementation, the weakened ideology can no longer make the officials loyal and compliant to their supervisors. Different departments form their own interests and culture. (2) Change in the political structure. Decentralization disperses authority and resources. Fiscal decentralization and the policies that allow different government departments to raise revenue to meet expenditure empower the local government with economic decision-making powers and provide strong incentives to secure extra-budgetary funds, which only serves department interest and sometimes at the cost of public interest. Therefore, the local government has its own policy preference, power, incentive and resources to achieve its interests, thus, its loyalty to the supervisors is re weakened. (3) Faked information. The local government’s control of information is important because of fragmented authority: The lower level government can selectively provide information to higher- level government to serve its interests. My research on fragmented authority is based on Lieberthal and Oksenberg, but expands the following two aspects. The first aspect applies fragmented authority to study local government, while the existing literatures focus on higher level government. The second expansion applies the fragmented authority to analyze government operation, while the existing literatures focus on policy formulation. My research finds that fragmentation is better reflected in the process of policy implementation than policy formulation, better reflected in local levels than in higher or central levels, better reflected in political issues than in economic issues, and has worsened in the first decade

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of 21st century than in 1980s. In other words, this is an overall cen- trifugation in the government system, which is reflected in many aspects. The first one is fragmentation of value where the government officials’ compliance to their supervisors is symbolic than substantial. The government officials disagree with their supervisors’ orders and commands. Therefore, on the one hand, there are tougher evaluation indicators for the local government officials. On the other hand, the local government’s disagreement, suspicions and even resistance of these evaluation indicators become stronger and sometimes they show their discontent publicly in some cases. The second aspect of fragmentation is institutional fragmentation: governments of different levels and different departments implement policies to serve their own interests. What we can see is that the political leaders’ speeches will be repeated in lower levels, but only limited to speeches without substantial impact on implementation; the policy documents will be rewritten at lower level but will only remain on paper. Regardless of what the central government says, different levels of government and different departments have their own interests and their ways to achieve them, which lead to frequently “quarrels among documents” and “quarrels among policy implementers”. Even in early 1980s when the central government’s first round of “No. 1 document” on agriculture and rural works was introduced, its principles and policies were resisted and weakened by some ministries and local governments. The peasants complained that “the central government’s No. 1 document is very good but the (local governments’ and ministries’) “No. 2” document is very bad.” In short, the Chinese government is not as coherent as it seems to be. The third aspect is functional fragmentation mainly caused by a bad design of division of government function among different departments (or ministries at the central level). From the central to the township, the departments are designed, neither based on functions nor issues. Taking food issue as an example, we can say that the functions of production and distribution are divided and different departments are in charge of them. These two functions should work closely but they always conflict with each other: when the food production is low, the distribution department sells food instead of

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purchasing food to meet the domestic demand, vice versa. Another good example is rural labor training. Since 2004, the government has taken labor training very seriously and spends a large amount of money on it. However, the training program and expenditure are poorly coordinated because they are divided between the labor department, agriculture department and bureau of poverty reduction. At the local level, these training programs among different departments use the same training organizations and the same group of trainees. Therefore, resources are wasted. Some departments even fake data to collect the money. Fragmentation becomes an emerging problem for local governments’ daily operations. Both the government behavior and the interaction between government and public are under-institutionalized, which leads to high discrimination power. Government operation becomes personalized and informal rules dominate, or in other words, the government operation is deeply embedded into the social networks within the government. Though there are formal rules on how to get government permits, what really matters are the personal connections (Guanxi), or people’s social capital, which can also influence official’s promotion, getting a project and more allocation, etc. When Guanxi dominates the formal rules, the government’s daily work, especially when the lower level goes to higher level, become private affairs. The public affairs cannot be concluded unless they can be transformed into private affairs. At the same time, the supervisor’s private affair will be dealt with as important public affairs by the subordinates. Only in this way, a good relationship with the supervisor can be maintained. Personalized bargaining between officials, whether of same level or different levels, is very common. Bargaining becomes an important way to make government work. It exists not only in the process of policy formulation, but also in policy implementation. As a result, the formal rules just exist on paper, but cannot generate shared norms and procedures. The last but not the least aspect is the fragmentation of the budgetary system. The undergoing budgetary reforms, like department budgeting, separating collection and expenditure, treasury single account system, etc., can only solve the problem of rationalizing the bureaucracy but has nothing to do with the public’s participation in the budgetary

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process. Therefore, even these limited reforms are hard to implement because of low social pressure. At the higher levels of government, because of lack of democracy and participation, the budgetary reform only empowers some powerful departments (like the department of finance), renders personal connection more important in getting more allocation. At the lower level, there is very limited coordination between departments and each department has its own budget or budgetary goals. These departments play important roles in implementing government policies and projects, therefore, resources are wasted and works are inefficient and the policies cannot achieve their original goals. As the federalists argue, the two major tasks for organizing a government are, first, make the government capable of controlling the people, and second, make the government capable of controlling itself. The fragmented authority makes it hard for the government to control itself. Though as a concept, fragmented authority is based on American experience, it also applies to China but with different consequences because of differences in the institutional backgrounds in these two countries. The USA has a federalism system, which enables division of power among the legislature, executive and judiciary at all levels of the government. Different interest groups get many channels to lobby and influence government policy making. Besides, US has a strong civil society, the autonomous “third sector”, with the government and market and plays an important role in providing public services. Sometimes, this system does not work well and some public goods are not or under provided because of lack of coordination among different departments or/and levels of government. But this system is better institutionalized and predictable. The government is responsive, accountable and effectively supervised by the public. But in China, this fragmented authority significantly weakens the government’s public service and governance quality. The next question is, what kind of political economic consequences will it bring to us?

8.2.3. Campaign style government behavior A rationalized modern bureaucracy conducts routine administration, which is characterized by standardized institutions, legal procedures,

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differentiated structure, clear division of labor and abundant resources. The township government appears like a modern bureaucracy, but it operates in a movement style rather than in standard ways. James Thomson argues that post-Mao China has a paradox of institutionalized movement: reform means to standardize, but reform can only be conducted in campaign style. The problem is that the campaign style reform does not achieve its goal of routine administration even after several decades of reform, instead, campaign style operation itself becomes institutionalized. Not only the daily work and various types of evaluations, but also the reforms, are conducted in a campaign style way. In other words, mobilization replaces routine administration in the local government’s daily operation. Campaign style operation mechanism means to mobilize most, if not all, human resources and financial resources in a very short time period, to act rapidly, with intense propaganda, to achieve some specific goals. Because of high cost, a campaign would not be able to sustain for long time, so it must be able to achieve the goals in a short time period. The campaign style government operation replaces routine public administration by political mobilization and hence the government administration turns to be composed of some “campaigns”. This campaign style operation mechanism has its historical legacies developed during the revolutionary era. It was continually used in the next three decades after the establishment of PRC: the political legitimacy developed during the revolutionary era still existed and provided legitimacy for campaign style operation, to achieve some specific political, economical and/or social goals. All resources, including ideologies, were mobilized through a strong organizational network that penetrated into every corner of the society. After the initiation of reform and opening up in late 1970s, campaign style operation continued to be used, even though the government made significant improvements in building rule by law and administrative reforms. The reason for campaign style operation is not the administrative reform but the unfinished administration and political reform: the government still cannot successfully deal with the public affairs through routine procedures. In other words, it is because the grassroots

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government is under-institutionalized. This campaign style operation serves the government’s interests rather than the public interests. New rules are implemented in a campaign which fade away and are unable to be turned into routine procedures. This campaign style operation is a government-led “movement” rather than social movement led by civil society. These movements or campaigns are covered widely. Most of them are economic issues, for example, establishing many TVEs and developing small towns, in the 1990s, to industrializing the agriculture and promoting labor export economy in the 2000s. Some of them are social issues, for example, promoting nine-year compulsory education and achieving the family- plan goals. Some of them are political, such as keeping the public informed of the government affairs and some nationwide political studies, etc. Some of them are nationwide, some provincewide and some of them are at county and township levels. Though all these campaigns or movements have different names and levels, they share some similar characteristics: (1) The campaign starts with a leader’s order, as the appraisal and evaluation are the main methods, always with an intense propaganda. (2) There are some “models” of the campaign some of which are self-made while others are “created” by the governments for propaganda reasons. (3) At the end of the campaign, leaders at different levels look very satisfied with the results that are achieved under a genuine hardworking leadership. However, this is not real. The real story is formalism: “the documents are implemented in other documents” and “the meetings’ policies are only implemented in other meetings”. Or even worse, meeting the campaign goals regardless of costs generates some negative consequences. An example is the huge township and village debts created by these campaigns. The authors’ fieldwork finds that most of the grassroots governments’ work is conducted through these campaigns, leaving little space for the routine work. At the township level, a frequently used term is “central task”, while the government departments’ daily work is called “professional task”. The central tasks are implemented mainly through campaigns and give priority to the professional tasks. As a result, some government officials who are responsible for professional

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tasks spend most of their time by working on the central tasks. In other words, the township government does not work like a modern bureaucracy, i.e., follow the procedures and perform routine works. The campaign style grassroots government has high mobilization ability, but the negative consequences are also significant. Some scholars argue that compared to other political systems, the Chinese political system has an advantage of “concentrating the power to do great things”. However, this advantage could be a disadvantage, to “concentrating the power to do bad things”. A good example is the “Great Leap Forward” movement. This campaign style government has some similarities with the “mobilization style government”, which is defined as the state monopoly over all resources and political organizations, including mobilizing the people. It is characterized by organizational concentration and personal concentration of power. Both of them are “top– down pressure based”, i.e., the higher-level government sets tasks and goals, which means pressure for the lower level. These types of government have four weaknesses. First, the campaign and mobilization style is contradictory to the rule of law and organizational procedures. Campaigns and mobilizations weaken and even destroy the formal authority. According to Weber, organizational rationalization and institutionalization forms the base for organizational capability. Second, to conduct administrative tasks through mobilization or campaign may work beyond or even against the law thereby weakening the law’s social control function. As a result, the priority of law is taken over by the administrative means. Third, mobilization and campaigns are intermittent and partial, which disturb the daily and routine administrative work. Fourth, the extreme mobilization may lead to social disorder, even disaster (Huang, 2003, p. 304). Huang finds that there are some structural characteristics in addition to these four characteristics in a campaign style government. First, administrative resonance. The lower-level government resonates with the higher- level government in many ways. Even if some of the higher-level government’s policies cannot be implemented, , the lower government would still try to implement and obey the policies. What’s more, they appear to be agreeing with the high-level government and

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report good achievements. Some grassroots government leaders say, “when the high level government leaders want to do something, they want others to say something good about it. So why not say it?” Second, the separation of power and obligations: between different levels of government, the higher-level government uses power but the lower level accepts the obligations; between the party and government, the party exercises power but the government accepts obligations; between predecessor and current leaders, the predecessor exercises power but the government accepts obligations. The government debt is a result of “the predecessor spends and the successor pays the bill”. Third, a closed government structure. The original goal of these government campaigns is to mobilize or influence the society. However, it turns out to be a game within the government, but has very limited influence on the society. For example, some campaigns to mobilize the peasants generate no response from the peasants, they just turn out to be “say to themselves” within the government. Therefore, though these campaigns have very weak mobilization capacity in the society, they do have strong mobilization capacity in the government. The deep reason is the concentration of power within the government where the powerful leader has the power to mobilize officials. At the grassroots level, power concentration is very intense, therefore, campaign style operation is also very common. Another deep reason for campaign style government is the difficulty in monitoring. Because the higher-level government need to monitor the grassroots government for many tasks, the multi-task monitoring becomes very difficult. So the higher-level government takes one task at a time to monitor the lower-level government. The lower-level government responses to this one-time monitoring in an opportunistic way by using campaign for meeting the goal. Since campaigns can mobilize abundant resources in a short time to work on a specific task, the lower- level government can meet the higher-level government’s goals. However, this is unsustainable and costs a lot. A campaign is followed by another campaign because the higher-level government wants to monitor task after task. Lack of effective monitoring mechanism is a deep reason for campaign style government, and it can only be solved by institutional building instead of using more campaigns.

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8.3. Institutional Alienation of Grassroots Government Corporationalism, campaign style operation, and fragmented authority structure make the grassroots government a closed system. For the higher-level government, this operational model can resist and avoid effective evaluation and supervision, using “campaigns” to cope with the supervisors and making policy reform and institutional reform hard to be implemented. To the society, which it governs, the grassroots government’s campaign style operation also resists and avoids the public’s demand. The grassroots government is locked in “corporatism” function. We can call it as institutional alienation.

8.3.1. Alienation Alienation, as a philosophy terminology, was well defined by Hegel and Feuerbach.It refers to the alienation of people from aspects of their “human nature” (Gattungswesen, usually translated as “species-essence” or “species-being”). Marx believed that alienation is a systematic result of capitalism and analyzes alienation comprehensively in his Economic and Philosophical Manuscripts of 1844 in which he argues that alienation includes alienation from the work he produces (the product of his labor), from working and from himself as a producer.

8.3.2. Institutional alienation Institution is a product of human interactions and defines a set of rules for interaction. Douglas North (1990) defines institution as “the rules of the game in a society, more formally, are the humanly devised constraints that shape human interaction….in the jargon of the econo- mist, institutions define and limit the set of choices of individuals.” Institution reduces randomness and uncertainty by providing a set of rules, which help people to predict the consequences and readjust their behavior based on these stable rules. Institution includes: (1) defining the players and their roles and obligations, (2) rules and norms of individual behavior, (3) costliness of ascertaining violations and the severity of punishment. All of these compose an institution.

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Institution provides rules and expectation for human behavior, therefore it is an important characteristic of modern government, which Weber calls as “rationalization”. Institution guides patterned behaviors, therefore, is the condition for routine government operation: it not only constrains government from power abusing, but also provides stable channels for citizen–government interaction. The citizen can adjust their behavior according to the institution and influence the government behavior through the institutional channel, which in turn promotes social stability. Institutions can be built up in two ways: The first way is through external authority, which uses commands and orders to design and achieve a common goal and build an order. The second way is from order spontaneously within the community. External authority is unstable but institutionalized order is more stable. Huntington (1968) argues that the degree of institutionalization determines the social stability. A highly institutionalized state can constrain all actors’ behaviors and lead the public’s political participation to the formal channels and create an order for the society. In societies with low levels of institutionalization, both the government and citizens are not constrained by the rules as well as have no rules to follow. Therefore, citizens’ political participation may be evolved into some “events” that influence social stability and political order. Since institution plays such an important role, we would expect the government to take efforts to improve the institution quality. However, institutions are hard to build up. Building an institution requires much more than legislation. Only when all important actors achieve some consensus can a new institution be built up and function properly, without their agreement, a new institution will stay on the paper. New rules are also required to be learned by the actors and get their behaviors adjusted, and it takes time to learn. Sanctions and punishments must be applied to make new rules be complied. We can try to use these factors for explaining the low degree of institutionalization of China’s local governments. The local government officials have no incentives for institutional reform because it may constrain their despotic power. The new rules are made without consulting relevant actors to achieve consensus, therefore not accepted and

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complied by them. After new rules are enacted, the citizens have no channels to learn it therefore hard to get them adjusted. People cannot achieve their goals through institutional channels but find that the extra-institutional channels are more effective, like make some riots or pay some bribes. In other words, new institutions may lack necessary sanctions and punishment to make people comply. Though an institution is stable once built up, it also may change according to changes in the social environment. As Marx argues in The German Ideology, institution is a product of social demand. People’s social demand is the dynamic of institutional change. People’s demand changes as time changes, so the institution should change accordingly. Institution also changes according to technology change, there are two mechanisms. The first is that people’s demand also changes as technology changes. The second mechanism is technology change may change (mostly reduce) the transactional cost. Political institution is also product of social demand, i.e., people’s demand for political participation and justice, and the government’s demand for political order and regime stability. However, once the political institution is built, it incrementally becomes autonomous and separated from the social context. The institution gets its own logic of change. The concept of “institutional alienation” includes these institution anomalies. Institutional alienation means that institution works or operates against its original goals. Further examination suggests that the deep cause is that the institution cannot meet social demand and becomes irrelevant and dysfunctional. People cannot achieve their goals if they use the institutional channels so they have to use extra-institutional channels. It leads to chaotic political participation, therefore weakens social stability and regime duration, as well as mar- ginalizes formal institution.

8.3.3. Government institution alienation The reason that we need the government is that it can provide public services. Therefore, the government institution should be designed to serve the public’s demand. However, the government is transformed to

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serve its own interest rather than the public’s interest. This is the institutional alienation that makes the government unresponsive to social demand when social demand for public service is increasing rapidly. Institutionalization is defined as a process where the organization and certain defined procedures work together to achieve value and stability. Institutionalization can also be defined as the process of internalizing external influence into the organization, which focuses on the structural aspect of institution, i.e., it develops according to the changes in the environment. So we can understand government institutionalization in these two aspects. On the one hand, it refers to the process that prompts the government to act according to a set of rules. On the other hand, it refers to the process where the government responds to the environment change, internalizes new external demand and values and adjusts to social development. The low levels of institutionalization of grassroots government means that the government does not act according to the rules, and the rules stays on the paper or only matters shortly during the campaign period, instead of being complied in daily operations. The grassroots government institution is thus alienated. There are four subtypes of grassroots government institutional alienation. The first is “shortage of institutions”, which leads to governance crisis because there is no coordination and constrains both the government and citizens. There are several causes for institution shortage. The first reason is that the rapid social economic changes in the last 30 years have rendered the slowly adjusting government institutions outdated, unable to meet new social demand. As a result, the social problems have accumulated and become a challenge to the existing political order. The second cause of is the historical legacy of a totalitarian state, which makes the grassroots government hard to adjust itself and weakens its motivation for reform. The second subtype is “dislocation of institutions”. There are many rules (laws, bylaws, regulations, etc.) for grassroots government, but these rules are badly coordinated, sometimes even conflict with each other. Some rules are too ambiguous to implement while some are too inflexible. In some cases, some rules are overemphasized and others get ignored.

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The third subtype is “institutions on the wall/paper”. There are many new rules and policies enacted everyday for the grassroots government to implement and comply. Some of them are from higher- level government while others from the same level. However, most of these rules and policies just exist on the documents and the leaders’ speeches, hung on the wall to publicize to the public. Rarely, the higher-level government officials come to examine how these policies are implemented. However, if you take a close look of what is happening in the grassroots government, you will find that these rules and policies are not implemented. The fourth subtype is “inversion of institutions”, which shows that the institution’s outcome differs from or even contradicts to its original goal. This is also very common: Some rules of “one child policy” makes it possible and even convenient for many families to have more than one child, some rules in land management allows illegal land grabbing that has become a common practice, and some rules of statistics lead to faked information, just to give some examples.

8.4. Origins of Government Institutional Alienation Why does the government institution alienate? We can provide two answers, among many others, based on two approaches of institutional theories. For the historical institutionalists, institutional evolution (includes alienation) is a product of historical legacy. The long history of dictatorship in China is the negative legacy that causes today’s governance problems. The rational choice of institutionalists, instead, argues that it is because both the personal interest within the organization and the organization’s interests are autonomous and different from the society’s interest. We will analyze the causes of government institutional alienation from these two aspects in this section.

8.4.1. Historical legacy and path dependence New institutions are built on the old ones. As we discussed above, only when all relevant (powerful) actors agree with the new rules and take

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efforts to learn them, will the new institution be enacted and accepted. The old institution influences the new institution through influencing the actors’ interests and learning process. If there is no appropriate re-distribution mechanism or incentive structure, it is very likely that some unintended negative consequences may happen during and after the enaction of new institution. Effective new institutions are hard to build and new rules often stay on the paper. Therefore, new consensus and procedures are also hard to achieve. China’s old political institution was characterized by high degree of centralization or despotism, i.e., combination of organization and personal centralization. Other historical legacies include the high mobilization capacity developed during the revolution era and the social control during the planned economy. Today, when the Chinese government is experiencing the transformation from a despotic and centralized political control system to a public service oriented government, these historical legacies are important causes of institutional alienation.

8.4.1.1. Paternalism Though the township government looks like a modern bureaucracy that has professional division, formal hierarchy, procedures and evaluation system, in its daily operation, the township government looks like a “one person government” with strong paternalism characteristics. A good example is that at the township level the cadres call the party secretary “boss”. T’ung-Tsu Ch’u argues that in Qing dynasty, only the government head, not his colleagues, was responsible for running the municipal and county governments. All the powers delegated to these two levels of government were monopolized by the government head. All his colleagues had no formal roles. The government head had four teams to assist him to govern. These four teams, i.e., attorney (or clerks who write documents), yamen runner (officials who do labor work, including tasks of policing and tax collecting), private advisor and servant (like personal secretary who helps the government head in monitoring the other three teams), were responsible directly

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to the government head and dependent on the government head. Their political roles depended on their personal relationships with the government head. The division of labor between these four teams was not based on functions, but on the government head’s orders. The servant and private advisor were the government head’s personal assistants who played a role in managing and monitoring the attorney and yamen runners, who were part of the formal institution (Ch’u, 1962). This one person government is also a paternalist government. A township party secretary told me that he is the contractor of that town without comprehensive contracting powers. On the contrary, a modern bureaucracy is based on legal-rational authority. A modern bureaucracy has professional division of labor, procedures, and hierarchies. It is an organizational model that coordinates many people’s activities to achieve some large-scale works and achieve the organization’s goals. A modern bureaucracy is characterized by the impersonal relationships within the organization that differs from the personal relationship-based organizations in ancient China. The personal relations may lead to low efficiency (Weber, 2004). However, Ch’u finds that the private advisors of the county head played an important role as administrative professionals, monitoring the other government officials (attorneys and yamen runners) and improved the efficiency. This is a legacy that exists till today. In a paternalist township government, the party secretary is considered as the housefather of the government where other officials are his staffs. This is the consequence of a politicized administration and the political power that separated from the society. This is a precondi- tion for a campaign style government: the government officials, as the personal staffs of the housefather, consider latter’s priority as their own priority. Another aspect of a paternalist government is that the township government is the housefather of the local community rather than its agent. The local state corporatism scholars also argue that the township government plays a housefather’s role and provide supports and services to the TVEs. I argue that the township government is not only the housefather of the TVEs, but also the local community. The township government is not responsible to the local community, but

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plays a dominant role in taking or giving to the society arbitrarily. The pressure-based cadre evaluation system allows the township government to consider economic performance (GDP growth rate) rather than considering provision of public services as working priority. What make things worse in the campaign style works is that the government behaviors are short sighted, always aiming to meet their supervisors’ evaluation and inspection instead of responding to the society’s demands. The fragmented authority structure makes it hard for the people to transfer their trust of the central government to the grassroots governments. The third aspect that a township government differs from a modern bureaucracy is its campaign style of daily operation. A modern bureaucracy is characterized by routine functions and procedures, but a township government works in campaign style that takes one specific task as the only priority in a given time period, breaking the routine operations. The “one person government” also blurs the professional divisions and hierarchies in the township government.

8.4.1.2. The legacy of campaign style governance of the revolutionary era During the war days, CCP mobilized resources in a short-time mainly through political mobilizations. As Tang (2007) argues, “campaign style of governance” is a traditional way of governance or ruling, it was “based on the legitimacy CCP achieved during the war days” and has significant influence on today’s governance model because of its inertia. CCP cannot quickly adjust itself from the mobilization way to a new one after it won the state power, even after several rounds of administrative reform, and reflection of using political mobilization and mass mobilization (Deng, 1994, p. 381). Although China has transited from a totalitarian state to a post- totalitarian state, it still has to face the legacy of totalitarianism. On the one hand, the state has incrementally retreated from the society. The society has got more autonomous space and its structure has become more plural. All these factors lead to more intense demand for political participation. On the other hand, the party government

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has not experienced substantial political reform to open effective formal channels for political participation. Therefore, the public has very limited influence on the government. What is more, during the process of policy making and implementation, some policies are not well coordinated and may conflict with each other. Sometimes the government power is used for personal benefits instead of public benefits, which is called as “the government power becomes department’s power, and the department power becomes personal power”. The result is that the formal institutions stay on the paper, unable to form shared values and procedures. Though there are different interest needs to be aggregated outside the government system, there are no effective channels of aggregation. Therefore, only when people take radical ways to express their interests, which may threaten the political order, will the government respond to them reluctantly. The logic of top–down political reform is also a legacy of totalitarianism, which believes to transform the society through top–down state planning but neglect the importance of bottom–up reform. On one hand, there are no stable and effective rules among different levels of government, between the government and society, therefore hard to make the government account to the society. On the other hand, because of the party government’s intentional or unintentional neglect of bottom–up political reforms, and its suppression of the people’s political participation, people has very limited effective formal channels to express their interests. This leads to

8.4.2. Self-interested government Both theories and daily observations suggest state/government autonomy. Not only do different levels of grassroots government have their own interests, but also different government departments, have their own interests. What is more, government officials’ interests vary from the state. Government institutional alienation is a result of vicious expansion of self interests. Before the reform era, under a totalitarian state, the Chinese government was a redistributive institution that monopolized power and

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penetrated comprehensively and deeply into the society. With the progress in reforms, the state retreated itself from the society slowly, and there are free spaces and resources outside the government’s control. At the same time, the government lost its monopolization of power (includes the redistributive power). With the deepening of decentralization, the grassroots governments have become more autonomous and behave more in a self-interest oriented pattern. Since CCP takes economic performance as an important source of its legitimacy, economic growth is the most, if not the only, important indicator of cadre evaluation. Therefore, the autonomous grassroots governments take economic growth as their working priority at the cost of other public goals including public service. The government’s self-interested behaviors must be effectively constrained to avoid severe political costs, and push reform forward instead of pulling it back. Scholars who study Chinese politics have similar worries, for example, Minxin Pei argues that China’s transition is a “trapped transition” or “partial reform equilibrium”, which is not development of market economy or liberal democratic reform. This may lead to political and economic stagnation in the coming future. The reason for a trapped transition is the self-destructive logic of the incremental reform strategy. The rulers want to stay in power so they adopt an incremental reform strategy, which will not violate the rulers’ interests and political instability. At the same time, rapid economic growth provides abundant resources for the government to maintain its power and delay democratization reform. Institutional and legal reforms become an alternative of democratization. In the long term, the reform will lose its dynamics and become more difficult and risky. The consequence of incremental reform is the emergence of a decentralized predatory state (Pei, 2006). We need to take efforts to deal with these problems to put the reform on the right direction. The institutional alienation of grassroots government could be regarded as political decay and the local politics is in great troubles. The central government cannot effectively regulate its local agents, and the political centralization cannot be transformed into effective administrative centralization. Though the state has successfully

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improved its extractive capacity, its political system fails to represent the diversified social interests and build a healthy central grassroots government relationship. The effective political centralization fails to administrative centralization. The government’s mobilization capacity also has been weakened and is not accountable to the society. As a result, the grassroots government becomes an independent agent that has its own interest different from the central government and the people. The extreme case is it is neither the central government’s agent nor the people’s, but the local officials’. This weakens the central government’s authority as some of its policies are hard to be implemented. The campaign style grassroots government can implement some policies very effectively but it prefers policies that benefit local officials instead of the people. It is, therefore, said that the policies cannot go further than the Zhongnanhai (where the policies are made). The highly centralized political system is an important reason for institutional alienation at grassroots government. First, the grassroots government finds it hard to resist bad policies that are made at higher levels. This drives them to commit more mistakes. Second, the quantitative cadre evaluation system enables high discount rate for the local officials, driving them to achieve some performance goals in short term regardless of the long-term negative consequences to get promoted. Third, the officials at different levels may conspire to over- report their performance to their supervisor at higher level. An over- centralized political system, which claims for people’s democratic rights in principle instead of providing institutionalized participation channels, is the deep cause for these problems. As the history tells us, to solve the grassroots governments’ problems is a very important task and has significant implications. As Renyu Huang (2007) argues, whether a policy can be implemented or not, be implemented successfully or failed, depends on whether it fits the officials’ shared customs. It has nothing to do with the perfect design of the policy. Without a reform of the current grassroots government’s institutional alienation, both institutional reform and policy improvement could be implemented at the grassroots level. The answer is to build a public owned grassroots government.

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Again, the history can shed light on our discussion about the 1583’s royal examination that was chaired by the Chinese emperor. He asked a 500-word question, which says, why has the corruption increased despite him taking so much effort to improve his rule? Was it because of his lack of love for the people, or his indecision (Huang, 2007, p. 28)?

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Institutionalization of Governments and Reforms

In general, the transformation of government lags behind that of the social economic changes, for the latter is the basis of the former. Yet, the problem that the Chinese grassroots government has is that it is not simply lagging behind, but rather, losing the ability to respond to the society. According to the observation, the local government does not keep pace with the society’s demands, instead it has been trapped by the existing institutions as well as its own interests, so it has been drifting away from the demand of the society or even becomes the rival of public interest. Hence, the governance ability decreases sali- ently and also, the issue of alienation is locked up. Under such circumstances, this study suggests that the institutionalization of the government should be the linchpin of the systematic and mechanical breakthrough of the reform of the grassroots government.

9.1. Basis of Government Institutionalization The institution alienation of the grassroots government illustrates that the relationship between government mechanism and the demand of the society is placed upside down, which not only reflects the faulti- ness of the governmental system related to internal control and the administration, but also suggests the discord among two pairs of

295

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relations: politics and administration, government and society. Yet the consonance of these relations is the foundation of the institutional innovation of the government.

9.1.1. Politics and administration The process of politics is different from that of administration, the functioning principles of which also differs. The political process is “a process related to the policy or the expression of the state will”,1 which usually is reflected in the delivery and integration of the daily will of the society, and establishing the process of state will and its policy, etc. The fundamental operating principle is “legitimacy”, or to acquire the support and trust from the society. Yet the process of administration is related to the “process of policy implementation”, which mainly involves the administration techniques and focuses on the efficiency and the effect of the implementation. While efficiency is not the ultimate consideration of the political process, it is something that the process of administration cannot shy away. For the grassroots government, the functions of politics and administration have long been tangled together. Even more, administrative process lacks independence and is almost assimilated by the political process. Administrative management, administrative officials and administrative affairs are highly politicized, which lead to difficulty in the standardization of government behavior as well as little attention being paid to efficiency. The grassroots government even resorts to political mobilization for centralizing resources to accomplish a specific administrative management assignment in order to meet the assessment of the superiors, which determines the unsustain- ability of this sort of management inefficiency. The insufficient administrative functions affects the supply of the public services at grassroots level and also renders the social conflict of grassroots unmanageable. Under this circumstance, a large number of social contradictions, which should have been addressed via the standardized administrative process, escalate incessantly to the grassroots government itself and

1 See Goodnow (2003).

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also the central government due to the over-politicization. And just because of the over-politicization, minor issues escalate into big problems, which forces government to use the excessive social resources and to exert the political means. The mismatch between the political process and the administrative process not only leads to waste of governmental resources and inefficient administration, but also prevents the grassroots government from fully performing the political functions. Thanks to the politicization of the administrative process, the grassroots government lacks interactions with the people and therefore, it is unable to integrate the willingness and wishes of the society at the grassroots level. In the end, the political process cannot be built effectively. To change the running mechanism, it is necessary to distinguish the political and administration functions. There are four aspects to be considered here. First aspect is to draw a line between the two functions. The political process is a process, in which the will of the people is to be conveyed and integrated, and also it is a reaction adaptable to the non-routine specific problems that are above the existing system. In contrast, the administrative process is a process of specific management and implementation, the behaviors of which have a sense of routineness. Therefore, the administrative process is everyday activity. For the grassroots governments, they are required to improve the structure, function and behavior patterns of the administration department in order to make it more efficient and sustainable. Second aspect is to consolidate the interaction between the two functions within the governmental system. The government continuously engages with the public during the daily administration leading to the realization of public participation. Hence, the administration department is able to collect and integrate the public opinion and bring them into the political process. In the political process, once the social interests are integrated into the governmental willingness and public policy, they need to be put into the administrative process in a bid to be carried out soon. Third aspect is to enhance the implementation power during the administrative process for avoiding the escalation from the social conflict to the political problem. To manage the social conflict is a basic duty as well as a fundamental

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function of the government. If the social conflict cannot be contained and managed effectively, the conflict would spread and deteriorate to the extent that it would become a political problem forcing the government to confront, which would need more social and political costs. Therefore, in order to lower the cost of the government orderly running, the administrative process must respond to the social issues effectively and manage them justly. Fourth aspect is to improve the political functions of the grassroots government and strengthen the delivery and integration mechanism of the interests and opinions from the society at the grassroots level. The lasting and effective governmental legitimacy originates from public trust and support, which cannot be separated from the political functions played by the government. The critical challenge the Chinese government faces is the gradual complexities posed by the social interest structure and relations. If there is no effective mechanism of negotiation and integration to address the various opinions, it is hard to form the national will and policy with the authority. Hence, it is mandatory to improve the political function of the grassroots government and establish a democratic mechanism of integration, which is expected to adapt to the requirements of the expression, coordination and integration of the social interests in order to create a better environment for the grassroots government for implementing various policies and making the government obtain more acknowledgment and support.

9.1.2. Government and society The relationship between the government and the society at the grassroots level also exhibits a unique phenomenon. On the one hand, the power of the grassroots government can hardly be contained either by the state political power or the grassroots society. On the other hand, the actual capacity of the grassroots government is constrained by its own behavior pattern and the functional potential of corporation, which makes the extraction capability very limited. Though the removal of agricultural tax decreases the grassroots government– people conflict, the trust between the two sides has not been built. Rather, it is getting worse due to the accumulation of the growing

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new contradiction such as land acquisition. In fact, the relation between the state and the peasant is deeply influenced by the characteristics of the running mechanism of the grassroots government. Michael Mann’s understanding on the state power may help us realize the political dilemma faced by the grassroots government. Mann predicts that the state enjoys two types of powers. First, despotic power: the range of actions which the elite is empowered to undertake without routine, institutionalized negotiation with civil society groups. Second, infrastructural power: the capacity of the state to actually penetrate civil society, and implement logistic political decisions throughout the realm.2 According to this differentiation, the author considers that while the traditional empire had magnificent powers, it was unable to penetrate, change and even mobilize the social power,3 which is the problem the grassroots government is now facing. It not only inherits the tradition of patriarchal government and the “movement” culture waged by the government during the war time, but also succeeds the imperial tradition of “strong power but limited capacity”, for the grassroots government does not embed itself in the society accordingly and has been unfa- miliar with the society due to the decreased interaction among the two. The claims of the public and society at grassroots level can hardly be transferred to the government directly, so they cannot immediately constrain and standardize the operation of the government. On the other hand, the political process at grassroots level detaches from the society and becomes an obstacle or even a com- petitor against the appeals of the society. The political logic that the grassroots government abides by is not based on the needs of the society, but follows those of their own needs and the superiors. Surely, the requirements of the superiors directly reflect the needs of the society from a direct angle, but the implementation of those requirements does not depend on the infrastructural power, then it changes to the superficial work dealing with the superiors. That is the reason why, we have seen so many frauds and deceptions. In addition,

2 See Mann (1988, pp. 5–9). 3 See Hall (1988, p. 21).

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in the patriarchal power structure, the needs of the grassroots go unnoticed by the township government. It is appropriate to say that the normal impression exhibited by the grassroots government during the power operation is almost the despotic power, which is carried out by neither interacting with the grassroots society nor running through routine bureaucratic system. Implementation is executed independently and through the means of movement that results in a deep shortage of infrastructural power. Some scholars define the infrastructure power as the government capacity, according to which the capacity of the grassroots government is highly deficient. As a result, even the abolishment of the agricultural tax and the conduct of the new-countryside construction cannot ameliorate the government capacity effectively. On the contrary, those supposedly preferential policies produce little effects. Classical theories often deem government as a product of “social contract”, “all this has no purpose but for the peace and safety of the people and the public welfare”.4 The government is both originated and constrained by the society and furthermore, society is the premise and the foundation of the government. The existence of the government is due to the needs of security, order, public goods and service from the society. In this sense, to satisfy the needs of the grassroots society shall be the primary function of the government, which is just contradicted to the actual situation. When the grassroots government feels the pressure from the above, it tends to resort to coercive means in handling the government–society relation. That is the reason why the preferential policy such as the abolishment of agriculture tax has not brought the expected result. On the one side, the government is competing with the people over issues of land acquisition and environment. On the other side, the grassroots government rarely positively responds to the public. Hence, a great deal of conflicts is spurred. As an organization, the grassroots government has high autonomy with its own agenda, which is similar to the state autonomy. According to Skocopol, in the state autonomy, the state can form and pursue the objectives that are

4 See Locke (1980).

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independent from the social group, class and social interest.5 The functions and operations of the grassroots government are compatible with this definition. Its autonomy is reflected not only by its independence from the society but also by its escape from the inspection from the central government. Though the central government takes the political legitimacy into account as its institution building and policy advocating the responsiveness to the society, it is extremely hard to make the grassroots government implement well. From the perspective of the system of government, the township level is responsible for the local People’s Congress and its nature is an execution body. According to the Chinese constitution, the township government exercises its power in accordance with the corresponding People’s Congress and the higher leading bodies. The representatives of the People’s Congress at the township level are directly elected by their electoral districts, so they are supposed to serve the interests of constituency and responsible for the higher executive body. Nonetheless, from the view of operation mechanism, the township government displays a large amount of autonomy that contains several of aspects. From the aspect of function allocation and developing direction, different from the administration in the general sense, the township has a penitential of demutualization. With respect to the organizational and authoritative structure, the township government exhibits the characteristics of fragmentation, not fully integrated into the regime system. Therefore, the priority is to start with clearing up the state–society relation for pinpointing the correct position within the social power structure for the grassroots government. This at least includes requirements from three aspects. First aspect is to enhance the responsiveness of the government as opposed to the society. That is to say, the government has to well define its accountability and make the responsiveness effective via the means of institution building and organization construction. The appeals of public service, justice and order from the society must be met. This responsiveness is guaranteed by the corresponding institution, through which the appeals can be delivered and integrated effectively. Furthermore, the

5 See Skocpol (1985).

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necessary mechanisms that make the integrated social needs become the objectives and responsibilities of the government are required. Second aspect is to consolidate the embeddedness of the grassroots government towards the society to guarantee the needs from the grassroots to be satisfied. The embeddedness also requires the government to avoid waging power arbitrarily during the policy-making process. The government shall try to coordinate with the social organization, social group and social member in order to establish the mutual trust. The influential power of different interest groups is unequal within the complicated social interest structure. Therefore, to ensure the justice of the government, it must resort to institution building to keep the government out of the control of the certain interest groups. Besides, it is a must to keep the grassroots government away from the specific interests making it not compete with the people. All these require rule of law to standardize the policy making process, making the government both embed in the grassroots social network and transcend the specific interest conflicts as to safeguard the justice and the legitimacy of the grassroots government.

9.2. Institutionalization of the Government Previous studies emphasize the bureaucratization from the perspective of institutionalization. Given the peculiar relation between the politics and administration in Chinese political development, this study puts forward the argument of the institutionalization of the government. Yet the literature review should start with the political institution.

9.2.1. The propounding of political institutionalization Huntington argues that the level of political institution decides the political stability and the political development. He considers the political institutionalization the primary guarantee of the political order, or the premise of the existence of the government. Social structure becomes diversified and complicated along with the economic development, which is reflected by the fact that various interest groups

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such as vocation, stratum and technique emerge adding up to the traditional groups like blood tie, race, religion and geography. Urbanization, literacy rate, education and easier access to the media elevate people’s expectations. Considering that politics is authoritative distribution about resources, when people’s expectation cannot be satisfied, they will resort to the politics to achieve their goals. In other words, what modernization brings about is the increase of political participation. Huntington also stresses the importance of organizing peasant participation well to obtain the political stability. “The requests of the countryside are often specific and mild. If these requests are met appropriately, the mass people would return to the conservative state that they used to live.”6 He argues that the difference of political development does not lie in the form of the government but in the effectiveness of the government. Huntington holds that turmoil and violence comes into being when there is lack of necessary channel for political participation. Hence, political stability must meet the following requirements: The adaptability in the complicated and ever-changing situation, the autonomy that is beyond the vested interests, the political institution that can transcend the divergence to obtain the agreement. Political institution shall contain issues such as how to make the people acknowledge the political authority, how to build up the political structure that operates as division of functions, how to absorb people’s political participation effectively. Only the political institutionalization adapting to the challenges brought by the modernization, both of the political stability and political development can be realized. Government is the primary factor of the political system. Yet the two are not the same. The political participation of the political system functions not only through government’s organization and institution but more importantly, through the legislation and the pollster agency that deliver and integrate the appeals of the various interest groups, in which the government is just an executive agency. Hence, the governmental institutionalization should adapt to the highly

6 See Huntington (1968, pp. 7–43).

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divisive and complicated political environment and in the meantime, to establish the professionalized agencies to carry out the different tasks and duties. From this angle, the governmental institutionalization is one the internal parts of political institutionalization. Governmental institutionalization employed by this book refers to the process in which both of the organizations and the institutions of the government obtain approval and stability. The governmental institutionalization differs from the political institutionalization sharply. While the latter deals with how to absorb the political participation and appeals from various social groups effectively, the governmental institutionalization focuses on the organizational structure and the institution at the executive level. For the government, institutionalization only can need the effectiveness of the policy implementation but also needs to keep the cohesion and integrity of the governmental system (Huntington, 2008). With the outspread of the modernization, people’s expectations towards the government begin to change. As long as public aspiration cannot be met, people would resort to political participation through the political system. If the government is able to solve these problems with the existing procedures, it will diminish the pressure from the political participation. Therefore, governmental institutionalization is tightly connected with the political institutionalization, which also provides the administration absorbing the politics with more spaces. Jin Yaoji (1986) argues that the administration aggregate and integrate the interest appeals and deliveries into the political decision- making process, during which the government uses the open and the participatory channels to absorb citizens’ appeals after he studies the political development of Hong Kong. This way offers the advantages to political stability and development as well. Hence, governmental institutionalization is not only the internal requirement of political institutionalization but also can decrease the pressure from the political participation and cushion the burst of people’s demanding. It is utterly most important to organize the civic participation well to achieve political stability. In other words, the organization of the civic participation is the fundamental content of political institutionalization. The essential problem here is to how to respond to the

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appeals from the below effectively; from the other perspective, the problem changes to how to satisfy the mass demands of the political participation effectively. It is inevitable to touch the issue of the organizational institution of the government while answering how to establish the sound responsive mechanism. In the western countries, the political system and the administrative system are paralleled and distinguished, hence it spared the discussion on the running of the government while referring to the political institutionalization. On the contrary, these two systems sometimes coincide with each other. So it is necessary to concern the running of the government. This study includes both of the extension of the political process in the course of the administrative process and the efficiency of the government itself, or being an independent process of the politics, whether the government is able to bear the political tasks. I argue that the governmental institutionalization manifests in two systems. First system shows how well is the interaction between the government and the society, or from the angle of the society, the effectiveness of the public participation towards the government. Second system shows the dynamics among the agencies within the government. During this process, the high level of governmental institutionalization exhibits in the consistency of objective and behavior at different layers and at different departments that makes the government work as an organic whole, particularly between the central and the grassroots governments. Yet as a matter of fact, while externally or internally, the consistency of the government exposes plenty of problems.

9.2.2. Driving force of governmental innovation Some foreign scholars claim that China has not yet built the modern state. I find it absurd, for it ignores the political reality and the achievements of the governmental system development of China. No doubt China has transformed from a traditional state to a modern one. Nevertheless, the level of institutionalization remains low. While the government seems to be strong, its institutions are fragile. From the observation of the grassroots government, political activities do not have robust political regulations, which in turn lead to the

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deficiency of the institutional basis of the political activities. American scholar Xu WenHui indicates that the challenges of China’s reforms are from politics. Why there are two radically different results from the two reforms (China and Soviet Union) both beginning from the 1980s? For Xu, this is because of the relatively low level of centralization of power of China: the resilience of the political system providing the space for innovation. The gradually incremental reform puts the avoidance of harming the invested interests as priority with the purpose of trying to reduce resistance as much as possible. So the economic transformation can be accomplished without changing the political rules. Yet, the authentic challenges still come from the politics. The research on the grassroots government shows that the economic reform is trapping in a deadlock with the invariance of the politics. Australian scholar Unger holds that the political system of Chinese rural areas remain unchanged since the Mao era, which is reflected by the fact that these areas still keep an outdated ruling system with the cyclical movements going on. With the power increase of the grassroots government, the officials take the advantage of the special relation between state and society to pursue their personal interests, which inevitably deteriorate the relation between the government and the peasant. The peasant resistances are localized and not connected with one another. He further argues that these issues must be addressed by rebuilding the political system of the Chinese countryside. The rebuilding is the political reform of the grassroots. Other scholars also notice the significance of this reform. Perry and Goldman point that “China’s current grassroots political reforms could actually help forestall rather than facilitate the advance of formal democracy at the national level. They promote basic-level reforms, such as elections for village heads and village committees, to revive the party’s local authority in hopes of prolonging the survival of the Communist party-state. Deferring progress toward national political reform in favor of dealing with the immediate challenge of curbing corrupt local cadres may be viewed as an acceptable tradeoff by ordinary Chinese citizens, for whom abusive and rapacious local officials pose the more urgent and immediate concern. Preventing one’s township party secretary from selling off collective lands without

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providing proper compensation or punishing a village head who has embezzled school tuition fees, for example, may be of far greater interest than any calls for national elections.”7 Hence, improving the governance and the stability through reform is the new feature of the Chinese political control. But they also realize the difficulty from the historical experiences. Their arguments are inspiring. The process of overcoming the alienation of the grassroots government is a process of rebuilding the political system of the rural area. Problems arise from the economic development shall be addressed by political reform. The superior cannot administrate the subordinate by traditional means and the government also cannot do this towards the society, especially when dealing with the conflict between different interest groups. Only through the governmental reform as to make the government transcend the specific interest group and to focus formulate the regulation and the speculation along with it, it is possible to guarantee the benign operation of the society. Outside the government, the idea that the government is to serve the public has been deeply rooted among the people with the increase of civic awareness. But within the government, there has not been a formal and effective channel to communicate with the people and the working of the government is lack of effective supervision. If it continues like this, there will be state opportunism, as some argue. In other words, this superficial fairness by advocating equal political game and legal system is actually to protect the interests of those monopoly groups at the expense of social interests. As a result, it will give rise to the twists of the price, corruption and rent-seeking, all of which finally lead to the forfeiting of the governmental legitimacy and the unrest of the society. Thus, political reform is extremely imminent. While governmental reform is imperative, where is the driving force of the reform? The motive force of the political reform is inadequate compared with that of the economic reform. I argue that the research on the progress of Chinese grassroots government and its reform innovation, especially its driving force, need to highly concern with the conduct of the following groups.

7 See Perry and Goldman (2007, p. 2).

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First group comprises leaders of the grassroots government or people who advocate the reform. The number of these people has been increasing. They claim to attempt the grassroots democracy to advance the democratization of the policy making, including fields like publicizing budget, broaden the participation. They are doing this for two reasons. On the one hand, the grassroots leaders have insights into the defects of the system. On the other hand, these officials are at the forefront of the conflicts. To handle conflicts well, they have to respond to the society resulting in exploration and reform. Second group comprises the industrialists and businessmen. Such people played an important role in fighting against the feudal monar- chy in the course of western democracy. Tsai (2007) points out that contrary to the popular perception that Chinese capitalists were appealing for democracy, the current status does not comply with the causal relation between free market and the political freedom. Chinese capitalists do not unify and boost the democracy. The market does not bring political freedom. On the contrary, it consolidates the political system. She argues that this is because of the fragmentation of the Chinese capitalists and the lack of the class of capital owner. Their messy and complicated backgrounds have curbed the collective action based on the class. Different from the European capitalists, Chinese capitalists are able to obtain their interest by relying on the adaptive informal institutions or guanxi in Chinese rather than by the democratic channels. From the perspective of the state, the government is able to restrict the organized political actions effectively in a bid to keep the society stable, which is particularly conspicuous when the crisis occurs. The benefits brought by the reform make the vested interests unwilling to reform that could jeopardize social stability and hamper the economic growth. The ruling party has a high ability of adaptability by adjusting the ideology, constitution of the party member and the policy objective as to strengthen its legitimacy. While I take it as an explanation for the current situation, it does not work for the future explanation. According to Tsai, Chinese private entrepreneurs are not the direct driving force of the democracy. But I argue that pluralism of interests will be brought into the agenda in the long run as per the general logic of democratic development.

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The informal institutions, she emphasizes, will be replaced by open and transparent negotiation mechanism as the deepening of political system reform. The transition of the rules of the game that implicates those entrepreneurs will be significant force in the course of democracy promotion. Third group comprises ordinary laborers. Foreign experiences prove that those people take tremendous efforts for achieving democracy. They played significant role in several occasions such as the Chartist Movement, Civil Right Movement and Feminist Movement. While it is undeniable theoretically that the extremism sentiment eroded the social institutions to some extent, the ordinary people advanced the democratic development and enhanced the elasticity and the adaptability of the institutions. Chinese workers, peasants and the migrant works all play important roles in the grassroots political arena, especially the diversified rights movements having unfolded the potential of political movement. There are not adequate studies concerning about forms and fashions of these movements and their effects on political reform and the democratic development. For instance, the grassroots democracy used to be deemed the hope of the political system reform from bottom to up. But some recent studies pessimistically find that the grassroots self-rule and democracy could end up with nothing as it is difficult to solve the intertwined relation between the government and the party. I argue there is still hope, though it is going to be a tough road.

9.3. Discussion on Reform People usually regard China in the process of transition. As a matter of fact, there are not only economy and society that need to be changed, but also politics and government. The latter ones are interconnected with each other and should be addressed even-handed. To overcome involution and the alienation of the institution and to walk out of the locked path are the questions of governmental transition. There need to be breakthroughs in three perspectives: grassroots democracy, basic-level autonomy and rule of law of the government. All these aspects were part of the agenda of the reform of the ruling

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party and the government and were elaborated in the 17th congress of the Chinese Communist Party (CPC).

9.3.1. Grassroots democracy The political efficiency of the grassroots democracy is related with how to overcome the leaders at the basic levels who are neither responsible to their superiors nor the people. It also establishes the institutional and political cultural foundations. Broadening the democracy at the basic units can extend the channels for the political participation, cultivate the public spirit for both the officials and the public, and forge the benign interaction between the government and the society. By doing so, the authority of the government is built on the will of the people from the bottom up rather than the political allegiance the other way around. First, to widen and improve the grassroots direct election to rebuild the power foundation of the grassroots government in the sense of not only to continue advancing the direct election at the village level and to smooth out the relation between the party and the autonomous organizations, but also to further developing the direct election at both township level and county level. Election is the core of democracy. All elections must be open and competitive, rather than being controlled or even designed by the superiors. The second step is to develop the civic political participation in multiple ways, especially the deliberative democracy. Tocqueville points that the American democracy depended on associations and organizations. By comparison, Chinese society lacks such organizations and the negotiation mechanism. And the challenges from the society are trivial. These make the formation of the effective interaction between the government and the society very hard. Broadening of the grassroots democracy has several sound effects. It makes the deputies of the People’s Congress the genuine representative of public interests, brings more elites within the system and encourages peasants to be taken more seriously over People’s Congress at township and county levels. People’s Congress so far has been the appropriate vehicle to realize the Chinese socialist democracy. Hence, further implementation and reformation of this

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institution plays an important role in advancing Chinese socialist democracy. The construction of the People’s Congress makes the grassroots government to bring positive effects and innovation during the process of its interaction with the society. Peasant organizations should also be valued. Developing peasant organizations benefit by integrating and conveying the interests of the peasants, forming the communication mechanism between peasants and the government and finally, creating the public opinion base for the grassroots government while it is consulting with the superior. If managed well, these organizations are able to bring benefits to all players. Peasants’ rights will be protected firmly. Grassroots government will obtain more leverage when it speaks with its superior. The central government can easily get the authentic information from these organizations for enacting regulations to rebuild the authority. At present, there are still a great many constrains upon the peasant organizations resulting in negative effects such as weakening of people’s trust and even breeding of the political extremism. In the meantime, the development of deliberative democracy should not be neglected. The focus on deliberative democracy derives from the concern to the path of Chinese democratization. Some argue that liberal democracy is the sole choice, for the representative system came before the deliberative democracy in most western countries. Others claim that developing deliberative democracy is a strategic choice of democratization, for China has a history of deliberation and consultation and deliberative democracy itself is a cooperative schema between officials and the citizens. Deliberative democracy is a scientific and democratic decision-making process. From the perspective of deliberative democracy, democracy is not simply the dissemina- tion of free election, but is also about advice, participation, deliberation, civic rights, the range and the authenticity of consultation. In short, it aims to realize the civic participation in the decision-making process that resorts to debate and discussion. Deliberative democracy helps in the formation of democratic ideas for decision making with open information and popular participation (He, 2008). He’s study on the Wenling city (county-level) shows the authenticity of deliberation from the observation of villages with the competitive election.

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Besides, voting is introduced at the final stage of public deliberation. Hence, deliberative politics could be the source of electoral politics. Yet the latter cannot be replaced by the former. The development of deliberative politics facilitates electoral politics. Electoral democracy emphasizes choosing the right leaders, whereas deliberative democracy focuses on the ability of deliberation and opportunity when citizens participate in the decision-making process. Political equity and deliberation are achieved through deliberative democracy. Under certain circumstances, the method of consultative institution supple- ments and improves electoral democracy. Deliberative democracy has more significance for the Chinese grassroots government, since it will at least bring the idea of democracy into the decision-making process. Will the development of democracy weaken the leadership of the Communist Party? It is an inevitable question. Development of democracy will surely reduce or even replace the decision-making power of certain departments. If we consider these counts, the answer is positive. But another question emerges. Whether the current situation of no separation of the party and government work consolidate the leadership of the party or not? The illnesses of the government at the basic level can be traced to lack of supervision. Yet if we put it into a larger picture, it is not hard to find that the weak Chinese society should also be taken into account. State power overwhelms that of the society. As clients or consumers, people’s growing power of safeguard- ing their own rights can push the government or the goods provider, to improve its service. The process of democracy is the process of balance of power between the ruling party and the public, which is at the best interests for the both. Some empirical studies have proved the mutual empowerment of the state and the society. This shows that empowering the emerging social forces does not necessarily lead to the erosion of the capacity of the state and there is not always a zero- sum game between the two. I was inspired by other perspectives when I worked as a consultant for the World Bank and the British Department of International Development. Once an official from World Bank told me during a project assessment, “doing project in China is much easier than other places. Here, you have a powerful

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state that no one has the power to challenge.” Yet one can also say that the Chinese society is weak. The low level of grassroots democracy and the limited space of the civil society and non-governmental organization (NGO) are resistant to governmental accountability. Fundamentally, broadening the scope of grassroots democracy is compatible with the upholding leadership by the Party. The democracy of the basic units concerns the form of the government, rather than the regime type. The better the operation of the villager autonomy, the less interest people will show on the direct election of township leadership (Li, 2003). Therefore, whether or not to carry out the grassroots democracy is to choose the style of the leadership rather than to choose the leadership itself. The bedrock of the leadership is the regime rather than the management of the detailed social affairs. Party’s leadership is to initiate the regulations of state operation, economic development and social life, rather than to deal with the unexpected social and political incidents passively. With the widening of the grassroots democracy, the grassroots party organizations may elections as their basic responsibility. They should guarantee fairness of the election, otherwise, they would hold the political responsibility. By doing so, it does not only cultivate the spirit of competition within the ruling party, making the party leadership enduring and consolidated, but also solves the problem that the superiors are not able to supervise their subordinates. From the respect of social development, the pluralism of social economic interests is irresistible. So are the political interests. For the ruling party, it surely should improve the compatibility of political interests, but more importantly, it should keep the organic link with the society for retaining its leadership, which in turn requires the development of democracy.

9.3.2. Grassroots autonomy Autonomy at the basic level is a significant part of the Chinese political system and also the logical result of development of the grassroots democracy. Since the middle of 1980s, villag autonomy has been piloted nationwide and was legislated in the late 1990s. This system

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on hand has made huge progress since then. On the other hand, challenges continue to persist. Grassroots self-governance differs from the gentry autonomy in history. “Under the traditional power structure, the imperial power was never descended below the county. The local order depended on etiquettes, clans and squires.”8 As Zhai Tongzu points in The local Government of Qing Dynasty, squires were the only overwhelming social force in the local political structure and their interests were sometimes incompatible with other groups, “which contradicts the self-governance, because self-governance requires the society shall be represented as an integrated entity.” Under this circumstance, squires who participated in the self-governance and the officials are the two groups within one political system and they shared the power of the Empire.9 Though public nature can be found from both of them for the reason of ideology, it was in lack of institutional supervision. At present, China does not need a duplicate of traditional autonomy, it rather demands a democratic autonomy that is resilient to the requirements of modern society. People deliver their appeals to the grassroots government and then the grassroots government integrates and coordinates these appeals by using the institutional channels. As such the public demands can be met by resorting to the management and service of the government. Yet integration and coordination requires a high level of democratic mechanism for making the grassroots public accept the institutional authority of the government. Otherwise, once the grassroots government fall into the proxy of given interest groups, the discontent of the public will be exacerbated. Tocqueville says: “a central power, however enlightened, however learned ones imagine it, cannot gather to itself alone all the details of the life of great people. It cannot do it because such a work exceeds human strength.”10 In fact, Chinese central government is neither able to obtain the perspective of the slightest of the grassroots government nor is able to fully understand how it works because of the

8 See Qing (2003). 9 See Zhai (2003, pp. 305–330). 10 See Tocqueville (2000, p. 86).

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vast territory. Appraisals aiming to assess the policy implementation are changed and alienated by the subordinates into various movements from time to time. Further, these appraisals from the top are very costly. As a result, the discontent of the people towards the grassroots government easily spreads to the central government. In order to express their demands, people resort to all kinds of means to participate in the political process, leading to the expansion of the political participation within or beyond the system, such as organizing the petition and mass disturbances. From the operation of the government, the higher level should entrust more autonomy to the lower level for decreasing the cost of dispute settlement. Some may argue that it could lead to a chaotic situation, making it harder to keep the validity and fairness of the grassroots government. To overcome, it is necessary to simultaneously encourage the supervision from the grassroots society. In other words, in order to correct the current situation of the government at the basic level, it is imperative to keep it unblocked to the society, broaden the scope of the public participation and enhance the public supervision. The political benefits directly brought by developing the grassroots autonomy are for changing the control mode of the government and making the independent force in the rural society play a fundamental role in the fields of public service provision, cohesion of social orders and settlement of disputes. As a result, conflicts will remain at the lower level. As such, it decreases the cost of direct control and reduces the failures due to miscellaneous affairs and makes the rural society full of dynamics. The basic goals of this new way of governance are to internalize and socialize the conflicts. Internalization is to settle disputes within the village rather than always report to the higher level. Socialization means avoiding to politicize the conflict, instead the government should try to change the conflict into social problems. But the current situation is just the opposite. As long as there are incidents, such as inferior quality of fertilizers, labor disputes, the first response of the peasants is to appeal to the higher authority or to demonstrate. The conflict becomes a political issue at the very beginning. Unfortunately, this is a rational choice made by

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the peasants in the current system, since the government controls the social life so tight that induces peasants to take action against the government as long as the problem remains unresolved. As a matter of fact, there are better ways to solve the problem such as applying the regulations of market economy, interactions among the social organizations or negotiations between interest groups. A great deal of the problems has been politicized. Within the system that the power has been centralized, once the demand of the people cannot be met, they will go to the higher level, or in some cases, to the central government. As such, problems are centralized. For instance, a large number of petitioners would rather confront the secretary of the county, instead of going to the Bureau of Complaints. One of the petitioners told me that it was useless to go to the Bureau of Complaints, or even the county magistrate. But who has the power to control the secretary? It is the higher authorities. Hence, petitioners would go directly to the higher level all the way to Beijing until they are satisfied. This power-centralized system equals to playing with the fire. A simple issue which should have been addressed by the daily routine becomes a political issue. Therefore, with respect to public administration, governance without the government should be the objective of the grassroots government. This does not mean anar- chy, but rather, for many fields, it implicates that the government should not directly involve in the process of governance. Governance without the government shares the same spirit of the new public management system. From this perspective, the government is not necessarily playing the principal role for all of the public goods. Lots of the public goods can be provided by NGOs or even the private sectors. And during the process of provision, competition is required among the government and the non-government in a bid not only to increase the quality but also to improve the governmental accountability and efficiency. For instance, NGOs have played significant roles in sectors such as education, hygiene and environmental construction. It could be the same in the rural area. That NGOs organize the peasants to make their own arrangements will decrease the cost and increase the efficiency. The government should be involved in the direct control of rural areas as less as possible. Besides, it should not

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count on the vigorous movement to change the countryside over- night. Built upon self-governance, the central government can no longer administrate the local government directly. In other words, the political rights and responsibility can be well defined between the central and the local governments. On the condition of development of grassroots democracy, the local people should be the managers. The grassroots autonomy does not mean to abandon the higher authority or even the central government. In fact, the grassroots autonomous entity should count on higher authorities on many issues: through which channel the appeals can be integrated, how to set up different functions and in the meantime to keep the specializa- tion and how to safeguard the publicity and authority. Only when the complex and adaptive governmental institutions are established, the grassroots autonomy is able to work efficiently. Improved grassroots autonomy leads to upgradation of its governmental institutions but also guarantee the enhancement of the political institutions. The autonomous activities regulated by the rule of law are more likely to consolidate the fairness and the authority of the power system than to jeopardize the authority and supervision of the higher level. As long as conflicts arise at the grassroots level, the central government can play a neutral and authoritative role in settling them. As such, this system not only assures the consistency and validity of the daily administrative affairs of the grassroots government, but also lowers the pressure from the massive political participation over the power system. Meanwhile, the superiors will have abundant resources to deal with the unsettled conflicts from their subordinates. And there will also be a watershed between the administrative behaviors and the political behaviors, making the political system more stable.

9.3.3. Judiciary construction The development of rule of law plays a vital role in various fields: regulating the relation between the grassroots government and its society and the relation between the political process and the administrative process, and guaranteeing the successful operation of the organizational structure and the grassroots democracy at the basic

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units. The rule of law satisfies both the demand of the governmental system of the grassroots government and the requirements of the grassroots society. The function of rule of law differs from politics markedly. The rule of law has a sense of certainty towards all kinds of social relations and this is something politics does not have. Politics needs to be adjusted along with the changes in the social interest structure and public will. Tocqueville says: “In America, all political issues will become a judicial issue in the end. Hence, parties resort to the language of law during their daily debates.”11 Rule of law is an effective way to make the power system operate consistently. As Aristotle suggests, “law should be the incardination of divinity and sense.”12 He considers that one of the purposes of the law is “the universal obedience”.13 In other words, rule of law requires every social relation has to be subjected to the law and the law is the source of managing all the social issues. Nonetheless, while rule of law could regulate politics, the latter cannot be replaced by the former. Because the structure of the social power and interests is ever-changing that leads to the change in public appeals. Therefore, politics is required to satisfy the social demand. The establishment of rule of law would leave the non-political issues to the law, making the social conflicts manageable. It not only assures the authority of the management, but also creates certainty to the actions taken by the players. But the current governmental relations among different levels are based on rule of man. Rule of man implies that there are rules during the competition and the politics is unstandardized. The political power of the subordinates is sometimes determined by a word said by the superiors. Hence, it is a prerequisite for the higher level to respect the political position and power of the lower level, within which legal protection plays the primary role. Legal protection is needed to make the grassroots government abide by rule of law. On the condition of

11 See Tocqueville (2000). 12 See Aristotle (1996). 13 Ibid.

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rule of law, the higher level should revert back the administrative power to the grassroots government, making it worthy of its reputation. At present, the political power at the basic units is incomplete with respect to the power design and it is not constrained by rule of law, both of which lead to power monopoly or power abuses. In this vicious circle, the discontent will swirl upward to the central government. Although establishing an orderly structure of rule of law among different levels is not a political reform or just an administrative reform, it contains tremendous political benefits — making the grassroots governments exercise their rights and responsibilities to respond to the grassroots public. As a matter of fact, more and more people have begun to resort to the law expressing and regulating their appeals in various ways: learning and citing the legal articles, seeking the judicial channels to settle disputes, while some choose participating in the elections. All these phenomena illustrate that rule of law could be accepted and trusted by the people. The government shall respond to this advancement positively. As such, street politics and mafia politics will be avoided substantially. An institutional channel that could enable people to deliver their appeals should be the priority when there are conflicts between the government and the people. The present blunder is that some grassroots governments use the incomplete legal procedure to manipulate the results when peasants resort to democratic channels, which leads to the greater conflicts and weakens the trust in government. Though there have been great progress since the reform and opening-up, compared with the rapid changes of the social life and with the ever-increasing demands of the people, the progress with the rule of law is explicitly lagging behind. Particularly, the present laws cannot keep pace with the realities of the grassroots social life. The deficiency lies in over-emphasizing the substance and playing down the procedure with lots of procedural contents being expressed in the substantive law. The direct reflection is oversimplifying the procedure, especially on transgression of law. Therefore, it is difficult to judge the illegal behavior and there is no error-handling mechanism. Once conflict comes about, a great quantity of disputes cannot be settled due to the uncertainty of the channels of rule of law, which

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just provides space for the unlawful and improper means. For instance, rule of law is quite pressing thanks to the further development of the grassroots democracy. If there was no legal protection, the grassroots election could have been easily manipulated by money and violence. In practice, all competent departments at both township and county levels have the power to accept the reports concerned with rigged election. As a result, no one would take the responsibility. While the Chinese State Council has issued Information Disclosure Law, it does not help much. Without the unambiguous legal provision, the government would disclose whatever they want, leaving the people to be the disadvantaged. Hence, it is necessary to utilize law to protect public’s right to know for supervising the government in implementing the policy of open administrative affairs. The political rights of peasants shall be stipulated by law, and furthermore, the stipulation should be meticulous. With the unambiguous specification, the actions that used to be specious could be resolved. For example, when facing the resistant incidents, some local governments, on the one hand, approved the demands of peasants as reasonable and legitimate, and on the other hand, asserted that the incidents were manipulated by people who had motives. The government actually affirms the demands of the peasants abstractly, but in the meantime denies the motives and legitimacy. So a pretext is given to the violent crackdown. With the specific legal provisions, the government should judge the legitimacy of peasant behaviors according to the law, rather than accuse the people who are unaware of the truth. For the basic level government, to improve the political function, fill in the gaps of the administrative structure and effectuate the orderly operation of the grassroots democracy, it requires to strengthen the rule of law in the following aspects. First, to define the relations among different power subjects for keeping a sound interaction, including governments, governmental organizations and the party branches at grassroots levels. To realize the justice and harmony of the grassroots society and meet the demands of social service, it is necessary to consolidate the engagement among the governments, public bodies and social organizations, and in the meantime, to regulate the

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departments, governments and social organizations. Second, to establish a mature government within the bureaucratic system. The regulating function of law is indispensable in issues concerned with the grassroots government like the configuration of functions, the relation between the organization structure and the power. It is needed at present to set up a relatively robust organization law at the basic level with the purpose of changing the authoritarian structure and specify the functions and structures of the grassroots government. Third, to perfect the mechanism of grassroots democracy and establish a sound grassroots democracy through the manner of laws. In order to integrate the conflicts and the demands from the complex relations of the power and interest groups in the social life, a feasible democratic mechanism is a must. Thus, the law is not just required to regulate the relations of different stakeholders, but to establish a comprehensive democratic system, which together enables the will and the interests of the people to be delivered, coordinated and finally integrated as the authoritative will of the government. Fourth, by resorting to an effective political process, to coordinate different relations of social interests and power, and obtain the consensus from the people, which is also the foundation of the legislation. While the pretext of rule of law is that there are laws to go by, the basis of the legislation is to build a broad consensus. Only then the laws are authoritative.

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Postscript

The book is based on a policy counseling research. The preliminary findings of the research were published in a series of policy research reports. This manuscript is adapted from the series. The field work of this book spans two years, taking place either in the luxurious or shabby local government offices, or in villages and farming fields, or sometimes at the dinner tables, or on the buses commuting from rural towns to cities. The field work lasts much longer than the writing-up. Numerous grassroots cadres have helped during the field work because of their deep understanding of rural problems and government issues and willingness to share it with others. Most of them have become good friends of mine. I am grateful to them. This book is, to some extent, written for them. During the policy investigation, the author submitted a number of research reports to the central government. The top leaders such as Premier Wen Jiabao and Vice Premier Hui Liangyu delivered important comments on the reports, pushing forward the research smoothly. I thank leaders and colleagues in the Development Research Center of the State Council (DRC). My special thanks goes to then- vice president and senior fellow of the DRC, Xiwen Chen. He not only approved the research project, but also provided important instructions on the study.

333

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334 Township Governance and Institutionalization in China

I whole-heartedly thank Professors Ming Zhang, Jing Zhang, Xiaojin Zhang and Yuejin Jing. Their comments and suggestions shed light on my conceptualization and pushed forward the writing-up of the book. I thank Professors Elizabeth Perry, Jean Oi, Xueguang Zhou, Lianjiang Li, Baogang He, Tianjian Shi etc for their great support. Some of them even participated in part of the field work or data analysis. I learned a great deal through collaboration with them. I also thank Professor Andrew Kipins despite the fact that we never met with each other but had telephonic conversation three or four times. He translated my research reports on migrant workers a decade ago and got it published overseas. He and Dr. Graeme Smith edited and translated my research report series on township reforms two years ago and got them published by M.E. SHARP in the United States. I was primarily motivated by the publication of this English monograph and decided to publish this book. I thank Professor Katherleen Hartford and Dr. Sarah Cook for their important support to this study. I was inspired by their research. I particularly thank Professor Baogang He, who recommended the manuscript to the Commercial Press Ltd. I am grateful to Jean Hung from the Universities Service Center for the China Studies at the Chinese University of Hong Kong for her assistance and help for years. I thank my colleagues Mingliang Feng, Jing Du, Chen Zhao, and Mingxiao Yu, who are always ready to learn new things. They contributed to this study one way or another. These young students greatly helped me to complete this book smoothly. I thank World Scientific Publishing Company for moving ahead with the publication of the book and providing editorial support along the way. My special thanks goes to Mr. Shaomin Chang, director of the workings department of the press, and Mr. Wei Song, editor of the press. They devoted a lot of efforts in publishing this book. I owe my thanks to my family. My wife, Ms. Shaoqing Lü gave me full support. I resort to her in my life for her harsh criticism on the work. My son Tan Zhao greatly inspires me in my life and work.

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Postscript 335

My wife and I feel much rewarded to see him growing up and achieving success in schools. I am grateful to my parents, who approved my choices for no reasons. I have developed my keen interest on the study of rural grassroots organizations during my service in the central government policy research department for over two decades. Since the past decade, I have been focusing my research and thinking on this. My personal experience as a research fellow overseas as well as a government leader in counties and cities enriches my observations and thinking. I try to accomplish an excellent work. However, I will not spot flaws unless I “write”. I can hardly please myself with all these flaws, not to mention getting applause from the readers. It may be out of my capacity. Nevertheless, I look forward to criticism and will go on with the work.

Shukai Zhao 31 May 2009

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Appendix I: Interview Outline of Town Leaders

University College Vocational High School Senior High School Junior High School Primary School Illiterate Others: ______(Please specify) If the degree is higher than college, please note down the details of the time of entering university and the major at university: ______5. Duration for current position: ______years ______months 6. Previous Position: ______7. Where is your current home? (Please tick the appropriate box) County seat Town seat Others ______(Please specify) 8. Your contact information: ______(Phone number)

336

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ii. Township overview 1. Demographic information of town:

Total number of Households:______, among them, number of Agricultural Households: ______Total Population: ______, among them, number of people in Agricultural Sector: ______The number of Non-Agricultural people in designated towns: ______Total number of Labor Force: ______, among them, the number of labor force working outside hometowns on long term (more than half years): ______2. Geographical Conditions: mountainous region hills plains plateau 3. Climatic Conditions: humid semi-humid semi-dry dry 4. The Total Land Area of the whole Town: ______(acres) In which, the area of arable land: ______(acres), woodland ______(acres), water surface: ______(acres) Hills: ______(acres) Others: ______(Please specify) 5. Distance of the seat of Town Government from the County Seat: ______(kilometers) 6. Distance of the farthest administrative village from the seat of Town Government: ______(kilometers) 7. Distance of Railway station at the nearest point to the Town: ______(kilometers) 8. Distance of bus station at the nearest point to the Town: ______(kilometers) 9. Number of administrative villages in the Town: ______10. Number of villager groups in the Town: 11. Number of villages with electricity supplies: 12. Number of villages with tap water supplies: 13. Number of villages with connected local phone supplies: 14. Gross annual income of the whole town last year: ______(10,000 yuan)

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In which: Gross annual agricultural income: ______(10,000 yuan) Gross annual industrial income: ______(10,000 yuan) Gross annual income of construction industry: ______(10,000 yuan) Gross annual income of transportation sector: ______(10,000 yuan) Gross annual income of commerce and service sector: ______(10,000 yuan) 15. Fiscal revenue of the town: ______(10,000 yuan) 16. Revenue off-budget: ______(10,000 yuan) 17. Other Revenue: ______(10,000 yuan) 18. Per-capita net income of peasants of the last year recorded by the statistics submitted by towns: ______(yuan per person) 19. Township enterprise information: Number of Township enterprises:______Number of Township enterprise Staff: ______Output value of Township enterprises: ______(10,000 yuan) Tax contributed by Township enterprises last year: ______(10,000 yuan) Administration fee handed in by Township enterprises to Town government: ______(10,000 yuan) 20. Situations of Public infrastructure: As to Junior Middle School: Number of Schools: ______Number of Public Teachers: ______Number of Non-Public Teachers: ______Number of Students: ______As to Primary School: Number of Schools: ______Number of Public Teachers: ______Among them, number of Public teachers in central Primary Schools: ______

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Number of Non-Public Teachers: ______Among them, number of Non-Public Teachers in central Primary Schools: ______Number of Students: ______Among them, number of students in central Primary Schools: ______As to Homes for the aged: Number of homes: ______Among them, number of homes established by town: ______Number of domestic service workers: ______Among them, number of people with public finance support: ______Number of the aged being supported: ______As to situations of township-level hospitals: Number of hospitals: ______Number of Staff: ______Among them, number of staff with public finance support: ______Situations of village health stations (clinics): Numbers of clinics: ______Among them, number of clinics with village financial subsidies: ______Number of clinics responsible for their own profits and losses: ______.

iii. Interview outline Part One 1. Could you please briefly introduce the institutions in your town, including the information of staff in different departments, the institutions and staff within administrative personnel and institutional personnel system, and the number, source and position distribution of staff not within the administrative personnel system? What has changed compared to five or six years ago in

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terms of institutional structure? 2. Which institutions are the ones that are responsible for their own revenue and expenditure in your town? And which need balance allocation? What are the situations of the staff and the funds sources of these institutions? What are the current situations of operation and fee status? What are the major difficulties and problems? What are differences in respect of work and funds status compared with five years ago? 3. Could you please briefly introduce the department structure and staff in the department of Finance, station of business administration, and office of family planning? How many people are there in these departments, including both staff with administrative personnel and government institutional personnel and personnel without the government institutional personnel system. What are the main sources of funds? What are the differences in the work contents focus and what is difficulty level compared with five years ago? 4. What do you think is the reason for the redundancy and overstaffing of town government considering the whole province or even the whole country (not limited to your own town, county and city)? What is the effectiveness of institutional reform and personnel streamlining? What do you think are better solutions to these problems? In the past two years, institutional reform and personnel streamlining are conducted in many towns and counties all over the country, how about your town and county? Have you undertaken the reform and if yes, how was the reform carried out? What do you think of the reforms impact regarding the aspects of efficiency improvement and expenditure reduction? 5. In recent years in China, many regions have undertaken town merging activities, has your town been undergoing the same process? According to your observation and experience, what are the effects of township merging on grassroots organization’s administration in terms of staff streamlining and work efficiency? What are the advantages and disadvantages? Generally speaking, what is your view on the effects of towns and villages merging?

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6. Could you please briefly introduce the fiscal situations including the tax and financial system (how is the income distributed in County finance system and Town finance system), the tax revenue of the town, the revenue of the town, revenue of off-budget, the handed-in tax or the subsidies received from the above. What are the main sources of financial income? What are the basic income structures and the expenditure items? Is there surplus or deficit? What percentage does the capitation of town government staff account for the revenue? What are the major problems con- fronting the town fiscal sectors? 7. Staff salaries in township level government sectors. Can the town government pay their staff in full and on time? If not, what is the current situation of staff wage payment? How many times were staffs not paid in full in the past five years? Please specify the year. How big was the wage gap or how long was the wage postponed? Please describe in detail every case. What do you think of the effects on the town government work? How much is the average wage (including basic wage, bonus and allowance) of the whole town government cadres? (within administrative personnel system) 8. Could you please describe the debt situation in your town? If there are debts, please specify when the debts were formed? How much debt has been added every year in the past five years? What are the debts about? Who are the creditors? What are the effects of debts on the administration work and operation of town government? What measures have been taken to dissolve the debts? How are they effective? What are the prospects of solving debt issues? What kinds of towns do not have debts problem in your area? 9. Could you please introduce the situation of debt in your town. If there are debts, please specify when the debts started? How much is the debt every year in the past five years? What are the aspects of debts? Who are the creditors? What has changed during the past five years? What are the effects of debts on the village level work and government operation? What measures have been taken to dissolve the debts? What are the effects? What are the prospects of solving debt issues? What are the villages that do not have debt problems in your area?

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10. Many areas are undertaking or are about to undertake the reform of rural taxes and administrative charges, has your town begun or planned to start the reform? If it has, what are the advantages and disadvantages of the reform on your town’s institution operations and other work? Has your town received any cash transfer after the reform of rural taxes and administrative charges? If yes, how much is it? Can the amount off-balance the deficit? If it can, how does it work? If it cannot, what actions will you take? Generally speaking, what do you think of the effects of reform of rural taxes and administrative charges on town work in both short and longer times? 11. Is the overall plan of the rural compulsory education fee conducted at the level of county in your area? If the overall plan has been conducted, what have been the effects? Has it obviously reduced the financial burden of the towns? What are the effects regarding the aspects of teacher staff, peasant burden and school quality etc.? 12. Does your town currently have collectively-owned enterprises? If it does, what are the enterprises about? What are the operation situations of these enterprises? How many labor forces do these enterprises have? If the town enterprises or collectively-owned enterprises have reformed their ownership, when did the reform take place? How was the reform conducted? What have been the effects of the reform on county and town’s financial work and other work?

Part Two 13. Many places in China practice the system of veto by one vote when examining the main leaders’ performance, does your town carry out the same system? How many cases of veto by one vote in your place, and please describe the cases. In addition to the head leader, do other town cadres feel the pressure about the veto by one vote system? Except for the veto by one vote system, what are the other assessment indicators for town leaders in your cities and counties? What do you think of the overall effectiveness of veto by one vote system? Do you have any further suggestions?

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14. In your town, what are the situations of cooperation and division of labor between the town party committee and town government? In what situation are the joint conferences held and in what situation do the two parties hold the conference independently? What are their respective responsibilities of the secretary of town party committee and town governor? What are the main roles of national people’s congress presidium and Chinese people’s political consultative committee Liaison Unit? Are there any town government officers who are not party members? Does the town governor hold a concurrent post of vice-secretary of the town party committee? Do you think it is possible to separate party from the government at the township level? 15. The leader of town is often leading dozens or even hundreds of town government cadres to work. According to your experience, do the whole staff of the town government become more positive in implementing the tasks from the party committee and government or become more passive? Why? When leading the town staff to work, what do you find is easier to carry out and what is more difficult to do? Why? 16. The leader of town is often responsible for the work of several dozen of villages. According to your observation and experience, what changes are there in terms of attitudes and effectiveness of town leaders’ work to implement the party committee and government tasks compared with five or six years ago? Are they more positive or more passive? Why? When the town leaders are leading village cadres to work, what do you find is easier to carry out and what is more difficult? 17. What are the main methods to motivate the town government cadres to work hard in your town? Are there any changes about the incentive method in the past five years? How do you assess the performance of the non-principal leaders and ordinary cadres? Do you also carry out the target responsibility system? Are there any changes about the system in the past five years? Does the transformation of administrative fees into taxes have any influence on the cadre motivation system?

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18. What are the main methods adopted by the town government to motivate the village cadres to work hard? What are the specific incentive and restricted methods? How about the effects? What are the changes of the motivation methods compared with years ago? Do you also carry out the target responsibility system among village cadres? What are the effects? At the levels of town and village, are there any other ways to motivate cadres in addition to the target responsibility system? 19. If you organize party members meetings in your town, is the attendance situation of rural party members better or worse than before? Are they provided by loss of working time subsidies? If they are how much is it? Are there any differences of attendance between the situation with subsidies and without subsidies? 20. When the town cadres are carrying out work among peasants, for example promoting some new breeds, new technology and new programs etc, how do village cadres and peasants act in concert with the town cadres? Are there any changes of the interaction compared with five or six years ago? For example, is it becoming much easier to get support or more difficult to get support? If there are changes, what are the causes? 21. What is the situation of peasants turning over three deductions, taxes and fees? Is it much easier or more difficult to take over the taxes and fees compared with five or six years ago? Is there a phenomenon of households getting behind with taxes and fees? If there is, how many households are there and how much do they owe? Among them, how many are rural families? If there are any changes about work difficulties, what are the reasons? What are the solutions? What will be the future situations? 22. Generally speaking, has the trust of peasants towards village cadres improved or reduced? Why? Taking a larger range of places into consideration (not limited to your county and town), is the relationship between grassroots organizations and peasants improved or worsened? What will be the future situations? Why? What do you think is the essential solution to improving the relationship between peasants and grassroots organizations?

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23. According to your observation and experiences, what have been the main disputes and conflicts among villagers in the past one year? What about the disputes and conflicts between villagers and village cadres? Please make comparisons with the situations of five years ago. 24. In some places, there are often peasants appealing to the higher authorities for help or gathering to making trouble. Have these incidents happened in your area? If they do, what are the main causes? Please describe one incident that you feel more important or more complicated to deal with in the past year? What implications and lessons have you drawn from this incident? What are the differences in petition number and petition contents between the last two years and five or six years ago? 25. Based on your town’s situation, which aspects do you think should be put more efforts to improve the relationship between grassroots organization and peasants? Are there any specific measures? What kind of system adjustment and organizational system innovation should be adopted?

Part Three 26. Did your secretary of town party committee or town governor often go to county seat or city for meetings in the past one year? How many days did they spend on meetings? What were the meetings mainly about? How often was one meeting held? 27. In addition to attending meetings, did your secretary of town party committee or town governor often go to relevant sectors of county government or city government to handle affairs? Which sectors were mostly visited? Who among the staffs were most frequently contacted and what were the visits mainly for? In another way, in what situation, in general, do you go to county or city government? Do you go every week or every month or just go with no regularity? 28. In the past one year, have the heads of your county and city (secretary and county governor) visited your town? How many times

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and what did they come for? Was there any regularity in causes and time about the main leaders’ visits? 29. According to your experience, which sectors of the county and city government do the staff that often visit your towns belong to? Was there any seasonal regularity? What did they usually come for? 30. In the past one year, how many days have you spent on accompanying the staff from county and city government and other above sectors? What do you think of the impact and effects of their visits on your township administration work? 31. Apart from the overall meeting for village cadres organized by towns, there are often some village cadres coming to meet main town leaders individually. Thus, according to your experience, what do these individual cadres visit you for? What kind of affairs do they mention most? Are there any changes in the contents of the affairs that individual village cadres talking to you during the past few years? 32. If an ordinary villager wants to meet you specially, what is he/she usually coming for? Are there any changes in the contents of the issues that ordinary villagers talking to you for the past few years? Please give a simple example. 33. Do the villagers in your town take initiatives to establish organizations for production, entertainment and other purposes? For instance, some professional and technical associations without government involvement, organization of literature and art, organization for learning and other activities. If they have, could you please introduce one or two cases of organizations that have greater impact in villages? Can you tell us how the organizations were set up, what their main activities are, and information about organization leaders, and the relationship between these organizations and party branch committee in villages? 34. What are the public security situations in your village? In what aspects have the situations changed in the past five and six years? How did the changes take place? As to the public security situations, what are the views and feedback from the ordinary people and the Deputy to the People’s Congress?

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Appendix I: Interview Outline of Town Leaders 347

35. What do you think are the main problems of rural basic education and vocational education? Please describe the progresses and problems that have emerged since the opening up reform started in 1978 or since 10 years ago. What are the views and feedback from the ordinary people and the Deputy to the People’s Congress about this issue? Compared with the situation five years ago, do you have any suggestions for the current situation? 36. What do you think are the main problems in the rural health and medical situations? Please describe the progresses and problems that have emerged since the opening up reform started in 1978 or since 10 years ago. What are the views and feedback from the ordinary people and the Deputy to the People’s Congress about this issue? Do you have any suggestions? 37. What are the regulations and requirements of the town government on the current rural environmental health situation? For example, what are the ways to dispose garbage, discharge sewage and burn crop straw?

Part Four 38. In your town, is there a precinct or administration district between the levels of town and villages? If there is, is there a specific institution (for instance, do some places set up special party branch with party secretary general and district governor)? Who are the people that take responsibility for these organizations? Do those people have specific authorities (for example, the authority to assess the village cadres, to examine and approve the village fiscal plan and authorities in other aspects)? Do they have the power to decide the wage level of the village cadres? If they do, whose wage do they decide, the village committee director or the village branch secretary or both of them? When did the institution begin to operate? 39. Does your town practice the system of village finance being supervised by the town? If yes, is it the single hosting or double hosting system and when did the system start? What do you think are the effects? What are the advantages and disadvantages?

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If no, does your town plan to carry out the system? Some people think the system of village finance being supervised by the town does not conform to the principal of villagers’ autonomy. What is your viewpoint? Which institutions should be the ones to supervise village finance? How many staffs are there? Does the village take care of their cash, or just seek help from the business administration station? If it is administered by the business administration station, when did it start? How much revolving funds could the village safe keep by themselves? 40. How does your town make the administrative affairs public? When did it start? What do you think of the effects? What are the aspects that need improvement? What do you think is the most important factor to make the administrative affairs and finance public? 41. How does your village make the administrative affairs public? When did it start? What do you think of the effects? What are the issues that need to be improved and put into effect? What do you think is the most important factor to make the administrative affairs and finance public? 42. As the main leaders of the town, which aspects of your work have you put more efforts and energy into in the past year? Please list three jobs, where you exerted the most of your energy, and compare them with the situation of five years ago. In the past years, when was your busiest period? What were you busy for? What are you currently busy with? What aspect of work do you feel happiest with in the past years and what is the thing you felt most dissatisfied with? What do you think is most difficult about the township administrative work? 43. According to your experience, what are the advantages and disadvantages of village-level direct elections on township and village administrative work? What are the prospects of village-level direct elections? When was the first time that your village conducted the competitive election? Did you decide the candidates through the mass-election method? If you did, what have been the effects? When did the system start? What are the differences compared with former elections?

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Appendix I: Interview Outline of Town Leaders 349

44. Generally speaking, according to your experience and observation, is the village administrative work becoming easier to conduct or more difficult to conduct? Why? In your point of view, what changes will take place in work contents and difficulties in next few years? Why? In your villages, has the number of people who want to be village cadres become bigger or smaller compared with the situation five or six years ago? Why? 45. In many places, people reflect the issues of frequent transfers and adjustments of main town leaders. Many leaders could not stay in the post for even one term. What is the situation in your place? According to your observation and understanding, what are the main reasons for the frequent transfers? And what are the advantages and disadvantages on grassroots administrative work? 46. There are several views nowadays about the relationship of county and town. Some people think that town government should be dismantled and county should then become the most basic governmental organization; whilst others think that the town government should be transformed to be the dispatched institution of county government; still others hold the view that the direct elections should be carried out at the level of town, that is, to realize the township autonomy. Could you please tell us your perceptions and views? In your view, what are the main functions of the township government? If the township government is dismantled, what would be the biggest problems? 47. What do you think is the most important reform measures and methods to solve village administrative work problems, and to smooth the village working relationships and make the village work environment more pleasant for village cadres?

iv. Interview tips 1. The interviewees of the investigation are mainly town leaders (including secretaries of town party committee, vice-secretaries of town party committee, town governors and deputy town governors) and village leaders (including Village party branch secretaries, village committee directors or village accountants). If

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it is necessary to collect more information in addition to the interview of village leaders, further interviews could be conducted with staff in relevant town government sectors or with other village cadres. The main leaders of the village (secretary and governor) should be the first option when the questions are about the overall planning of the village, the comprehensive work contents and the judgment about current situations and the policy advocacies etc. 2. Before the interview starts, please make clear to the village cadres that all the information collected through interviews will only be used for policy advocacy research and will have nothing to do with the cadres’ work evaluation and performance assessment. 3. The interviewers should try to create relaxed, free and a chat- ting-style atmosphere. The interviews could be conducted on both formal and informal occasions. Try to use informal speech and use language utilized in daily life. The order of questions can be flexible according to the conversation and should not be confounded within the interview outlines. For example, the interviewees are much more likely to refer to the debts issue when introducing the town financial situations. They may also mention the issue of the peasants’ petition when talking about the debts issue. However, the interviewers should pay special attention to the time allocation for each question and the overall mastery of interview outlines during the whole interview process. When ensuring the conversation to go smoothly, the interviewers should also make sure that all questions are covered. 4. During the interview, though interviewers are encouraged to cover all the questions, this does not mean each question is allocated the same time and length there should be focal point or stress according to the interview contents. The focal question should be allocated more time to get richer information and thus the corresponding records could be in more details. The questions of peasants’ involvement and the publicity of administrative affairs should be given more attention during the interviews.

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Though these questions have been referred to directly or indi- rectly in the interview outlines, there are a few special questions about the two aspects. 5. After the interview, the cases should be sorted out in the form of one question followed by one paragraph of response. Remember to add sequence number and keywords in front of each paragraph. The length of notes for each question can vary, and this can be decided by each interviewer. The notes for key questions that have got in-depth and richer information can be longer and can be even written into a small paper with several paragraphs. 6. All the narratives of interview cases should be written in the first person. The word style of the narrative is encouraged to adopt daily life language. The minimum word number of each town case report should be 10,000 words and the maximum is 30,000. The range of word number of village case report should be between 5,000 and 15,000. When it comes to the word number of villager case reports, the range is from 2,000 to 5,000.

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Appendix II: Interview Outline of the Village Leaders

i. Personal profiles Province: ______(City) Prefecture: ______County: ______Town: ______Position: ______1. Name: ______2. Gender: ______3. Age: ______4. Education Background: (Please tick the appropriate box) University College Vocational High School Senior High School Junior High School Primary School Illiterate Others: ______(Please specify) If the degree is higher than college, please note down the details of the time of entering university and the major at university: ______5. Duration for current position: ______years ______months 6. Previous Position: ______7. Your contact information: ______(Phone number)

352

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ii. Overview of the village 1. Village Geographical Conditions (Please tick appropriate box)

Plains Hills Mountainous region Others: ______(Please specify) 2. Which of the following options are correct for your village? Agricultural area Forestry area Pasturing area Fishery area Semi-agricultural and semi-pasturing area Urban suburb Industrial mining Others: ______(Please specify) 3. Distance of your village from the seat of town government: ______(kilometers) 4. Distance of the nearest market to your village: ______(kilometers) 5. Distance of your village from the county seat: ______(kilometers) 6. Number of villager groups in your village: ______; and number of natural villages: ______7. Number of village population in 2001: ______, among them, number of labor force: ______; Number of labor force going out to work for more than three months: ______8. Land area of village cultivated land in 2001: ______(acres) 9. Income structure of the village in 2001 Gross village income: ______(10,000 yuan) In which: Gross agricultural income: ______(10,000 yuan) Gross industrial income: ______(10,000 yuan) Gross income of construction industry: ______(10,000 yuan) Gross income of transportation sector: ______(10,000 yuan) Gross income of commerce and service sector: ______(10,000 yuan) Gross income of informal work outside village: ______(10,000 yuan) Other income: ______(10,000 yuan)

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10. Net per capital income of villagers: ______(yuan per person) 11. Village collective revenue: ______(10,000 yuan)

iii. Interview outline Part One 1. Could you please briefly introduce your life and work experiences? What kinds of occupations have you done before? When did you begin to be the village cadre? What are the specific positions? 2. How did you take on your current position? Were you attending the competitive election yourself, or mobilized by the town and village cadres or were you just selected? 3. Please introduce the leaders group in your village. How many people are there in the village Party branch and village committee respectively? What is the total number? Is the secretary of party branch and party committee director the same person? What are their separate responsibilities? In what situation will they hold joint conferences, and in what situation will they independently hold the meeting? Do you think that the authority of village Party branch and village committee should be separated at the village level? Could they? Is there any change in the number of village cadres before and after taxation and fee reform? 4. Could you please introduce the total revenue, village collective income and expenditure of your village last year? What were the main expenditures in the past years? What are the main sources of income and spending for the village collective? What other collective economy do you have, for instance the collectively- owned enterprises? If you have, how many are there and how do you run the enterprises? What contributions do they make to the village collective economy? Does your village have mobile lands? If it does, how big is it? How much can your village get from it? How much does your village administration get from it? How are the lands administered and used?

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5. Is there any change in the amount of agricultural tax in the past decade? If there is, what is the change like? Have you urged the peasants to turn over the agricultural tax? If you have, how did you do it? 6. What kind of land contract system do you carry out, the Yitian system or the Ertian system? Has the amount of contracting fee increased in the past 10 years? When your village is undergoing the second round land contracting, do you use competitive bidding methods? Do you need to hand in special local product tax? If yes, what are the products and how much do you need to turn over? 7. Does your village practice the system of village finance being supervised by the town? If yes, is it the single hosting or double hosting system and when did the system start? Under the double hosting systems, how much cash could the village keep for daily administrative operations? What do you think of the effects? What are the advantages and disadvantages? If no, does your town plan to carry out the system? Some people think the system of village finance being supervised by the town does not conform to the principal of villagers’ autonomy. What is your viewpoint? Do you have villager groups present supervising the town accountant when the accountant comes to your village to check the village account each month? If you have, how many people are there in one group? How are the group members selected? Who of the villagers are qualified to be the members? 8. Could you please introduce to us the amount of wage for village main leaders and allowances for other cadres? How are the wages and allowances paid, every month or ever half year or every year? Do you have the phenomenon of wage arrears? If you do, how long have the arrears lasted and how much was the amount? Who pay the wages and allowances to village cadres? 9. How do you decide the amount due for wage and allowances for your village cadres? What roles has the town government played in deciding issues related to village cadres? Considering the wage level you are paid, do you think the wage reflects the actual work and responsibilities you have undertaken? Who do you think should be the institution to decide the criteria of village cadres?

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How should they decide? How much should the wage level be? What methods have town government and village leaders adopted to motivate village cadres? Do the cadres have bonus? If they do, how is the bonus determined? Where do they get the money? 10. Can your town government pay their staff wages in full and on time? If not, what are the real situations of staff wage payments? How big was the wage gap or how long has the wage been postponed? What do you think of the effects on the town government work? If you also get paid by the town government, has the government ever gotten behind your wages? If it has, when did the arrears happen? What was the situation at the time? 11. Do you know whether your town has any debts or not? If it has, please specify when the debts were formed? What are the debts about? What are the effects of debts on the administration work and operation of town government? Do you think the debts problem could be solved in future? How? 12. Do you know whether your village has any debts or not? If it has, please specify when the debts were formed? What are the debts about? Where did your village borrow the money? What are the effects of debts on the administration work and operation of village? What are the possible influences of village debts on town government? What are the prospects of solving debt issues?

Part Two 13. How many times have you been to town government for meetings in the past one year? What were the meetings mainly about? Do you go more or less compared with the visit frequencies five years ago? Did you go especially to meet secretary of town party committee or town governor last year? What was your visit for? Has the secretary of town party committee or town governor was asked to meet you last year? What was it for? 14. In addition to attending meetings, how many times have you been to town government? What were your visits for? Which departments in the town government did you visit most? Whom did you meet more? Do you go more or less compared with the

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visit frequencies five years ago? In another way, in what situation do you go to town government? Do you go every week or every month or just go with no regularity? 15. How many times have you been to county government last year? What were the visits mainly for? Which departments in the town government did you visit most? In another way, in what situation, in general, do you go to county government? What are the differences compared with five years ago? 16. In the past year, have the heads of your town (secretary and town governor) visited your village? How many times and what did they come for? Was there any regularity in causes and time about the main leaders’ visits? 17. According to your experience, which sectors of the town government, do the staff that often visit your villages belong to? Was there any seasonal regularity? What did they usually come for? What are the differences compared with five years ago? 18. Which sectors of the town government do the staffs that often visit your villages belong to? What did they come for? What do you think of the impact and effects of their visits on your village work? Which sectors in the town government or which town cadres have been more helpful? In the past year, how many days have you spent on accompanying the staff from town and other above government sectors? 19. Do you have cadres dispatched from the above institutions in your village? What work are these cadres mainly involved? Do you think it is helpful for village work? What are your suggestions to better the situation? 20. According to your observation, is the number of town cadres becoming bigger or smaller compared with five or six years ago? Are they involved in more work? Has the town government become more helpful for village? Is the service provided much better? In the past two years, institutional reform and personnel streamlining are conducted in many towns and counties all over the country, how about your town and county? Have you undertaken the reform and if yes, how was the reform carried out? What do you think of the reforms impact on village work?

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21. In your town, is there a precinct or administration district between the levels of town and village? If there is, is there a specific institution (for instance, do some places set up special party branch with party secretary general and district governor)? Who are the people that take responsibilities for these organizations? Do those people have specific authorities (for example, the authority to assess the village cadres, to examine and approve the village fiscal plan and authorities in other aspects)? Is the institution helpful for village work? 22. In recent years in China, many regions are undertaking towns merging activities, has your town been undergoing the same process? According to your observation and experience, what are the effects of township merging on grassroots organization’s administration in terms of staff streamlining and work efficiency? What are the advantages and disadvantages? 23. Many areas are undertaking or are about to undertake the reform of rural taxes and administrative charges. What are the effects of the reform on the operation of town government, village and other work? How does the reform influence your village income? If the village income has been reduced, what will be the effects on village administrative work? What are your plans to deal with the possible effects? 24. What are the main methods to motivate the town government cadres to work hard in your town? How do town leaders motivate village cadres? What are the effects? Are there any changes about the incentive method in the past few years? Is it much easier or more difficult for the town government to carry out work in the village in recent years? What sort of work is easier to conduct and what is hard to do? Why? 25. In many places, people reflect the issues of frequent transfers and adjustments of main town leaders. Many leaders could not stay in the post for even one term. What is the situation in your place? According to your observation and understanding, what are the main reasons for the frequent transfers? And what are the advantages and disadvantages on grassroots administrative work? 26. Is the overall plan of the rural compulsory education fee conducted at the level of county in your area? If the overall plan has been

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conducted, what have been the effects? Has it obviously reduced the financial burden of the towns? What are the effects regarding the aspects of teacher staff, peasant burden and school quality etc.?

Part Three 27. What is the current situation of peasants turning over three deductions, taxes and fees? Is it much easier or more difficult to take over the taxes and fees compared with five or six years ago? Is there a phenomenon of households getting behind with taxes and fees? If there are, how many households are there and how much do they owe? Among them, how many are rural families? If there are any changes about work difficulties, what are the reasons? What are the solutions? What will be the future situations? 28. In your villages, have the number of people who want to be village cadres become bigger or smaller compared with the situation five or six years ago? Why? Is there the situation that some villages have no village cadres? If there is, do you know the reasons? How is the village work conducted without village cadres? 29. If you organize party members meetings in your village, is the attendance situation of rural party members better or worse than before? Are they provided by loss of working time subsidies? If they are how much is it? Are there any differences of attendance between the situation with subsidies and without subsidies? 30. When the village cadres are carrying out work among peasants, for example promoting some new breeds, new technology and new programs etc., how do village cadres and peasants react? Are there any changes of the interaction compared with five or six years ago? For example, is it becoming much easier to get support or more difficult to get support? If there are changes, what are the causes? 31. According to your observation and experiences, what have been the main disputes and conflicts among villagers in the past year? What about the disputes and conflicts between villagers and village cadres? Please make comparisons with the situations of five years ago?

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32. In some places, there are often peasants appealing to the higher authorities for help or gathering to make trouble. Have these incidents happened in your area? If they do, what are the main causes? Please describe one incident that you feel more important or more complicated to deal with in the past one year? What implications and lessons have you drawn from this incident? Are the disputes more or less compared with five or six years ago? What are the differences in petition reasons, forms and results? 33. Generally speaking, has the relationship between grassroots cadres and peasants improved or worsened compared with years ago? What will the relationship be like in next few years? Why? What do you think is the essential solution to improving the relationship between peasants and grassroots organizations? Taking a larger range of places into consideration (not limited to your county and town), has the trust of peasants towards village cadres improved or worsened? Why? 34. Based on your town’s situation, which aspects do you think should be put more efforts to improve the relationship between grassroots organization and peasants? Are there any specific measures? What kind of system adjustment and organizational system innovation should be adopted?

Part Four 35. How does your village make the administrative affairs public? When did it start? What do you think of the effects? What are the issues that need to be improved and put into effect? What do you think is the most important factor to make the administrative affairs and finance public? 36. How does your town make the administrative affairs public? When did it start? What do you think of the effects? What are the aspects that need improvements? What do you think is the most important factor to make the administrative affairs and finance public? 37. Has your village undertaken the public projects like constructing road, irrigation works, build school and electricity network etc.? If it has, what were the specific projects? Who took the initiative

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to undertake the projects: villagers, village committee, the secretary of village party branch or town government? Where did you get the money? If you did not have any projects, was it because that you do not need these projects or because you do not have necessary conditions to undertake them? 38. Do the villagers in your village take initiatives to establish organizations for production, entertainment and other purposes? For instance, there are some professionals and technical associations without government involvement, organization of literature and art, organization for learning and other activities. If they have, could you please introduce one or two cases of organizations that have greater impact in villages? Can you tell us how the organizations were set up, what their main activities are, and information about organization leaders, and the relationship between these organizations and party branch committee in villages? 39. What are the public security situations in your villages? In what aspects have the situations changed in the past five and six years? How did the changes take place? As to the public security situations, what are the views and feedback from the ordinary people and the Deputy to the People’s Congress? 40. What do you think are the main problems of rural basic education and vocational education? Please describe the progresses and problems that have emerged since the opening up reform that started in 1978 or within the past 10 years. What are the views and feedback from the ordinary people and the Deputy to the People’s Congress about this issue? Compared with the situation five years ago, do you have any suggestions for the current situation? 41. What do you think are the main problems in the rural health and medical situations? Please describe the progresses and problems that have emerged since the opening up reform started in 1978 or within the past 10 years. What are the views and feedback from the ordinary people and the Deputy to the People’s Congress about this issue? Do you have any suggestions? 42. What are the regulations and requirements of the town government on the rural environmental health situations? For example,

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what are the ways to dispose garbage, discharge sewage and burn crop straw? 43. As a village cadre, which aspects of your work have you put more efforts and energy into in the past year? Please list three jobs that you exerted the most energy on and compare them with the situation five years ago. In the past year, what aspect of work do you feel happiest with and what is the thing you felt most dissatisfied with? What do you think is most difficult about the village administrative work? When was your busiest period last year? What were you busy for? What are you currently busy with? 44. According to your experience, what are the advantages and disadvantages of village-level direct elections on township and village administrative work? What are the prospects of village-level direct elections? When was the first time that your village conducted the competitive election? Did you decide the candidates through the mass-election method? If you did, what have been the effects? When did the system start? If you did not, how did you decide the candidate before 1998? Did villagers get subsidies after they voted? When was the most recent election? Compared with the last election, was it election more difficult to conduct? If yes, what were the causes? 45. How was your secretary of village party branch selected? Did your village decide the candidate of secretary of village party branch through two ballot systems? If yes, when did it start? Is the system good? 46. There are several views nowadays about the relationship of county and town. Some people think that the town government should be dismantled and the county should then become the most basic governmental organization; the others think that the town government should be transformed to be the dispatched institution of county government; still others hold the view that the direct elections should be carried out at the level of town. Could you please tell us your perceptions and views? In your view, what are the main functions of the township government?

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If the township government is dismantled, what would be the biggest problem? 47. As the main leaders of the village, which aspect of your work is the most difficult? Generally speaking, according to your experience and observation, is the village administrative work becoming easier to conduct or more difficult to conduct? Why? Please share your forecast of village administrative work in the next few years? What do you think are the most important reform measures to solve the village work puzzles and smooth the relationship between towns and villages?

Appendix III: Interview Outline of the Villagers i. Personal profiles Province: ______(City) Prefecture: ______County: ______Town: ______Occupation: ______1. Name: ______2. Gender: ______3. Age: ______4. Education Background: (Please tick the appropriate box)

University College Vocational High School Senior High School Junior High School Primary School Illiterate Others ______(Please specify) If the degree is higher than college, please note down the detail of the time entering university and the major at university: ______5. Duration for current position: ______years ______months 6. Have you been a village cadre before? If yes, please specify the duration of service and position. 7. Your contact information: ______(Phone number)

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ii. Interview outline Part One 1. Could you please briefly introduce your family, for example, your family members, the situation of employment, and family income? 2. Do you know the collective income and expenditures of your village both last year and this year? What are the sources of income? What are about expenditures? 3. How do village cadres distribute responsibilities? Who holds higher authority between Secretary of the village and village director? Was it the same in the past? Do you think that responsibility and authority of the Party branch and village committee at village level should be clearly separated? Could it be? 4. Do you know the amount of wage for village main leaders and allowances for other cadres? How are the wages and allowances paid, every month or every half year or every year? Do you have the phenomenon of wage arrears? If you do, how long have the arrears last and how much was the amount? Do the village cadres have bonus? If they do, how is the bonus determined? Where do they get the money? Who should decide the wage distribution? Why? 5. Do you know, which sectors of the town government that staff often visit, belong to? Was there any seasonal regularity? What did they usually come for? What are the differences compared with five years ago? Are there more or less? 6. Do you know whether there are cadres dispatched from the above institutions in your village? Why are they sent here? What work are these cadres mainly involved in? Do you think it is helpful for village work? What are your suggestions to better the situation? 7. According to your understanding, is the number of village card- ers becoming bigger or smaller compared with five or six years ago? Are they involved in more work? Has the town government become more helpful for village? Is the service provided much better? Do you think it is necessary to streamline your village personnel?

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8. According to your understanding, is the number of town cadres becoming bigger or smaller compared with five or six years ago? Are they involved in more work? Has the town government become more helpful for village? Is the service provided much better? Do you think it is necessary to streamline your town government personnel? 9. In recent years in China, many regions are undertaking towns merging activities, has your town been undergoing the same process? According to your observation and experience, what are the effects of township merging on grassroots organization’s administration in terms of staff streamlining and work efficiency? What are the advantages and disadvantages? What are the reactions and perceptions of villagers? 10. Many areas are undertaking or are about to undertake the reform of rural taxes and administrative charges. What are the effects of the reform on the production and daily life of villagers? How does the reform influence village cadres’ work? 11. Is the overall plan of the rural compulsory education fee conducted at the level of county in your area? If the overall plan has been conducted, what have been the effects? Has it obviously reduced the financial burden of the towns? What are the effects regarding the aspects of teacher staff, peasant burden and school quality etc.? 12. Does your village practice the system of village finance being supervised by the town? If yes, is it the single hosting or double hosting system and when did the system start? Under the double hosting system, how much cash could the village keep for its daily administrative operation? What do you think of the effects? 13. Do you know whether your town government pays their staff wages in full and on time? If not, what are the real situations of staff wage payment? How big was the wage gap or how long has the wage been postponed? What do you think of the effects on the town’s government work? 14. Do you know whether your town has any debts or not? If it has, please specify when the debts were formed? What are the debts

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about? What are the effects of debts on the administration work and operation of town government? 15. Do you know whether your village has any debts or not? If it has, please specify when the debts were formed? What are the debts about? Where did your village borrow the money? What are the effects of debts on the administration work and operation of village? What are the possible influences of village debts on town government? What are the prospects of solving debt issues? 16. In your view, how active are village cadres in implementing tasks distributed by town government and village leaders? Are the tasks becoming more difficult or easier? What sort of specific tasks are easier and what tasks are difficult to carry out? Why?

Part Two 17. Have you visited village cadre for any reason in the past year? If you have, how many times? What were your visits for? Has the secretary of village party branch or village director or other cadres were asked to meet you last year? How many times and what was it for? 18. How many times have you been to town government in the past one year? What were the visits mainly for? Which departments in the town government did you visit most? Whom did you meet more? Has the secretary of town party committee or town governor asked to meet you last year? How many times and what was it for? 19. Have you attended village meetings in the past year? If you have, what were the meetings about? Are there currently more meetings or fewer meetings compared with the situation five years ago? What are the differences in the contents of meetings? Did you go for meetings in town last year? If you did, what was the meeting about? 20. In your village, has the number of people who want to be village cadres increased or decreased? Why? According to your observation, is there the situation that some villages have no village

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cadres? If there is, do you know the reasons? How are the village work conducted without village cadres? 21. What is the situation of peasants turning over three deductions, taxes and fees? Is it much easier or more difficult to take over the taxes and fees compared with five or six years ago? Is there a phenomenon of households getting behind with taxes and fees? If there is, how many households are there and how much do they owe? Among them, how many are rural families? If there are any changes about work difficulties, what are the reasons? What are the solutions? What will be the future situations? 22. If you organize party members meetings in your village, is the attendance situation of rural party members better or worse than before? Are they provided by loss of working time subsidies? Are there any differences of attendance between the situation with subsidies and without subsidies? If there are subsidies, how much are they? 23. When the village cadres carry out work among peasants, for example promoting some new breeds, new technology and new programs etc., how do village cadres and peasants react? Are there any changes of the interaction compared with five or six years ago? For example, is it becoming much easier to get support or more difficult to get support? If there are changes, what are the causes? 24. Taking a larger range of places into consideration (not limited to your county and town), has the trust of peasants towards village cadres improved or worsened? Why? 25. According to your observation and experiences, what have been the main disputes and conflicts among villagers in the past one year? What about the disputes and conflicts between villagers and village cadres? Please make comparisons with the situations of five years ago? What are the changes in the reasons of conflicts? 26. In some places, there are conflicts between peasants and village cadres, for example peasants appealing to the higher authorities for help. Have these incidents happened in your area? How many incidents have occurred last year? Please describe one incident

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that you feel more important or more complicated to deal with in the past one year? 27. Based on your town’s situation, which aspects do you think should be put more efforts to improve the relationship between grassroots organization and peasants? Are there any specific measures? What kind of system adjustment and organizational system innovation should be adopted?

Part Three 28. Do you know what is to make town and village affairs public? If yes, please explain how do you know it? 29. Do you know the village affairs releasing board in your village? What do you think of the effects? Do you think the information is true or not? Why? Can the board help to supervise the village cadre to be disciplined while spending money? What do you think is the most important factor to ensure the work of making village affairs public will go well? 30. Has your village undertaken the public projects like constructing road, irrigation works, build school and electricity network etc.? If it has, what were the specific projects? Who took the initiative to undertake the projects: villagers, village committee, the secretary of village party branch or town government? Where did you get the money? If you did not have any projects, was it because that you do not need these projects or because you do not have necessary conditions to undertake them? 31. Do the villagers in your village take initiatives to establish organizations for production, entertainment and other purposes? For instance, there are some professional and technical associations without government involvement, organization of literature and art, organization for learning and other activities. If they have, could you please introduce one or two cases of organizations that have greater impact in villages? Can you tell us how the organizations were set up, what their main activities are, and information about organization leaders, and

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the relationship between these organizations and party branch committee in villages? 32. In your opinion, what services do villagers need most to get from village cadres currently? And what is the most important public project that needs to be undertaken at the time? 33. How are the situations of public security in your village? What are the specific differences compared with situations a few years ago? Why have the changes taken place? 34. What do you think are the main problems with rural basic education and vocational education? Please describe the progresses and problems emerged since the opening up reform started in 1978 or within the last ten years. Do you have any suggestions for the current situation? What are the main difficulties and demands of villagers in these respects? 35. What do you think are the main problems with regard to rural health and medical situation and peasants treating and preventing diseases? Please describe the progresses and problems that have emerged since the opening up reform started in 1978 or within the last ten years. Do you have any suggestions for the current situation? 36. In the past year, what aspect of production and daily life do you feel happiest with and what is the thing you felt most dissatisfied? What do you think is most difficult about your life? 37. Do you know about the mass-election? Have you attended the village election in recent two years? Is there any difference between the current village election and election in the past? 38. Generally speaking, is it easier or more difficult to for village cadres to carry out work? Why? 39. There are several views nowadays about the relationship of between county’s and towns. Some people think that town government should be dismantled and county should then become the most basic governmental organization; the others think that the town government should be transformed to be the dispatched institution of county government; still others hold the view that the direct elections should be carried out at the level of town. Could you please tell us your perceptions and views? In

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your view, what are the main functions of the township government? If the township government is dismantled, what would be the biggest problems? 40. In your view, what are most important reform measures to solve the village work puzzles, to smooth the relationship between town and village and to accelerate rural development? Please share with us your further suggestions on bettering village work?

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Index

accountability system 158, 163, financial crisis 138, 139, 141, 165, 166, 168, 169, 171–174, 143, 144, 146 176 fi nancial expenditures 121 administrative process/function fi nancial revenues 118, 138 296–298, 305, 317 fi nancial systems 116 area management 193, 194 government accountability 141 bao cun systems 193 government budget 143–146 government forms 105 case study 44, 46, 47, 50, 65 governmental centralized power system 150, institutionalization 18 175 governmental involution 11 crises 240–242, 250, 251 governmental system 5, 6 control system 177, 202 grassroots 1–12, 14–19

deadlock of control 200 incentive structures 169, 170 debt chaos 127 institutional designation 21 decentralization 20, 25, 26, institutional dissimilation 9 30–34, 60, 61, 63, 76 institutional streamlining 92, departmental structure 86 94–96 disappointment of the grassroots institutionalization 34, 59, 65, levels 203 66, 70, 79 dual dislocation 170 institution reforms 94, 96, 97

371

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372 Township Governance and Institutionalization in China

integrated institution 148, 150 state–society relationship 6, 7 internal units 152, 154, 156, 157 substitution of goals 172

management malfunctions 204 tax and fee 20, 29–31, 38–40, meso-approach 76, 79 46, 47, 50, 76, 83 methods 20, 41, 55, 57, 76 tax reforms 125 township administration 188 obligatory interactions 177, 187 township control 187, 191 organization structure 106, 109 township expansion 90 organizational foundation 109 township ﬁ nance 38, 46, 50, 116, 117, 124, 126, 137, 138, 140, performance 184, 188, 189, 196 143, 145 personnel and staff 88 township government 1, 2, 4, policy 20, 21, 23, 24, 26, 28–30, 6–10, 12, 15–18 33, 35, 37, 41, 42, 47, 49, 53, township government 1, 2, 4–10, 60–63, 68, 80 12, 15–18, 20, 21, 23–35, policy malfunctions 200 37–40, 46–49, 62, 68, 70, 71, political control 174–176 76, 79–81, 83 political process/function 296, township government features 297, 299, 305, 315, 317, 321 105 politics 137, 143 township leadership 84, 91 power 148–154, 157, 158, 163, township mergers 98, 99 166, 170–172, 174–176 process of reformation 26, 30, vertical agencies 152, 154–157 32, 36 village 20–25, 28–30, 38–40, 42–46, 48–50, 53, 55, 56, 65, research 20, 24, 41–47, 49–60, 70, 71, 81 62–66, 69, 70, 76, 79–81, 83 village cadres 178, 180, 188–194, 196–198, 205, 206 salaries 117, 121, 123–126, 128, village ﬁ nances 191–193 130, 133 village relations 187, 205

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