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Social Security Under Decentralized Authoritarianism: Politics of the Public Pension Program in China

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Social Security Under Decentralized Authoritarianism: Politics of the Public Pension Program in China Syracuse University SURFACE Dissertations - ALL SURFACE June 2017 Social Security under Decentralized Authoritarianism: Politics of The Public Pension Program in China Jing Lin Syracuse University Follow this and additional works at: https://surface.syr.edu/etd Part of the Social and Behavioral Sciences Commons Recommended Citation Lin, Jing, "Social Security under Decentralized Authoritarianism: Politics of The Public Pension Program in China" (2017). Dissertations - ALL. 722. https://surface.syr.edu/etd/722 This Dissertation is brought to you for free and open access by the SURFACE at SURFACE. It has been accepted for inclusion in Dissertations - ALL by an authorized administrator of SURFACE. For more information, please contact [email protected]. ABSTRACT Welfare provisions are commonly regarded as an intrinsic product of democracy. Why do authoritarian rulers provide welfare programs to the people? How do authoritarian rulers promote welfare development under decentralized authoritarianism? This dissertation investigates these theoretical puzzles through a detailed study of the urban pension program for enterprise employees in authoritarian China. The decentralized fiscal and administrative structure in China makes the operation of the pension program a particularly challenging one. What are the redistributive incentives of the Chinese rulers? How does the central government differ from local governments in their redistributive calculation? How do these two levels of governments interact to ensure implementation of an expensive pension program? These are the questions this dissertation is set to address. This dissertation argues that while the Chinese central government more resembles long-sighted rulers and emphasizes welfare development, subnational governments are more short-sighted, being more motivated to promote short-term economic growth. The conflict of interests between these two actors leads to the classic principal-agent problem. This dissertation argues that the center uses fiscal subsidies as a leash to lead and restrain subnational governments, particularly those from regions with strategic importance to the center, to ensure proper implementation of the desired pension program. As the center’s fiscal subsidies reduce the costs of welfare programs, subnational governments with center fiscal support are more incentivized to promote welfare development. Therefore, the center’s subsidy program creates an uneven base of redistributive incentives for its subnational rulers. In addition to the availability of center fiscal support, this dissertation contends that the level of economic openness in a locality also shapes subnational governments’ redistributive incentives. Being afraid of capital flight, subnational governments in localities with a higher level of economic openness oftentimes discount welfare responsibility for investors with mobile assets. In localities where state-owned investments account for a larger share of the economy, the governments can impose higher taxes for welfare development. By combining these two factors – the availability of center fiscal support, and the level of economic openness – this study proposes five types of fiscal structure of the pension program at the subnational level. This dissertation’s contribution is threefold. First, it promises to enrich the existing literature on comparative welfare states, by filling the void in the redistributive incentives of authoritarian rulers. Second, instead of treating authoritarian rulers as a unitary actor, this study highlights the role of subnational governments in welfare politics, and details the center-local interplays in redistribution under the Chinese decentralized political system. This dissertation finds that the center uses fiscal subsidy programs to regulate its subnational governments. In so doing, this study also sheds new light on center-local relations in Chinese politics. Third, instead of attributing the Chinese regime’s authoritarian resilience to formal institutions, this dissertation contends that welfare programs, like the urban pension program, are employed by Chinese rulers to pre-empt and resolve public oppositions and thus to increase the regime’s resilience. ii Social Security under Decentralized Authoritarianism Politics of The Public Pension Program in China by Jing Lin B.A. Political Economy, Renmin University of China 2009 Dissertation Submitted in partial fulfillment of the requirements for degree of Doctor of Philosophy in Political Science Syracuse University June 2017 iii Copyright © Jing Lin 2017 All Rights Reserved iv Acknowledgements I would not be able to finish this dissertation without the love and support of my dissertation committee members. First and foremost, my deepest intellectual debts go to my advisor, Professor Margarita Estévez-Abe. She generously spared much time from her very busy schedule on reading and commenting on countless earlier drafts of this dissertation, and always provided thoughtful and extensive comments on my work. Her wisdom and love guided me through most challenging times of this dissertation research. Her rigorous scholarship and creativity greatly transformed me, as a person and a junior scholar. I also owe great gratitude to Professor Hongying Wang. She generously accepted me into the doctoral program at Syracuse University. Professor Wang encouraged me to pursue China’s welfare studies when I was in the second year of the program. During various stages of my graduate studies, Professor Wang offered invaluable support and encouragement. She has witnessed my growth in various aspects. She is like a friend, mother, and mentor to me. I am also very grateful to Professor Norman Kutcher. He offered insightful suggestions to my research from the perspective of Chinese historical development. He is always so very encouraging. Not only to my studies, he also encouraged me to bravely embrace both life and work. My thanks also go to Professor Jonathan Hanson. He is the best teacher I have ever met. He is always patient, poise, and inspiring. Professor Hanson provided me essential help with the statistical analyses in this dissertation, and encouraged me to pursue statistical training. Last but not lease, even though Professor Dimitar Gueorguiev joined the committee in 2015, he challenged me to think broadly about the framing of the research, and the grand picture of this dissertation. In addition to my committee members, I also owe great gratitude to many senior scholars who generously offered tremendous guidance and support to me, and provided insightful v comments and suggestion to this research. I first need to thank Professor Dale Tussing. I have always been inspired by his life wisdom and the spirit of “never too old to learn”. Through the journey of this dissertation research, we have developed a cross-generation friendship. A friendship I shall always treasure. Moreover, Professor Tussing was a tremendous help in editing my dissertation. My sincere thanks also go to Professor Mark Frazier. His works on the Chinese social security system inspired me to take on this research project. He is very generous to support my career development, writing recommendation letters for my multiple grant applications, serving as discussant for the panels I organized, and sharing tips for conducting field research in China. His encouragement carried me through this dissertation research. I owe deep appreciation to Professor Jeffery Stonecash, who walked me through the complete process from rigorous academic research to publication for the very first time. His encouragement and wisdom are valuable treasure of my life. In addition, Stephan Haggard, Dorothy Solinger, Keith Bybee, Matt Cleary, Kristi Andersen, Thomas Remington, Andrew Mertha, Daniel Aldrich also offered constructive comments and suggestions to this research when the project was still in its infancy. As field research constitutes an important component of this research, the successful completion of this dissertation would not be possible without generous support of various scholars in China. Special thanks are due to Professor Bingwen Zheng. I conducted four hour- long interviews with him. A considerable information included in this dissertation came from views and data generously shared by Professor Zheng. As a world-wide distinguished scholar on the Chinese social security system, he was always patient and friendly answering my questions. I also would like to thank Professor Quan Lu, who introduced me to the Chinese pension research circle. Without the help of Professors Xiaojin Zhang and Huosheng Tan from the Political Science Department of Tsinghua University, my field research would not be possible to finish so vi smoothly. They generously accepted me as a visiting scholar and offered me a jie shao xin (reference letter) to provincial governments. This letter was an important steppingstone of my field research. I am in great appreciation to my undergraduate advisor, Professor Ye Tian. He was the person who showed me into the field of political science studies, and encouraged me to pursue doctoral studies abroad when I was at Renmin University. Professor Tian has continued to support and guide my research after I graduated from Renmin University. My life would be on a different path without Professor Tian’s guidance. My deepest gratitude also goes to Professor Rosalee Clawson. She accepted me as a visiting scholar and offered me an office space on Purdue’s campus so that I could complete my dissertation writing. She
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