Part I: Political and Institutional History
Totalitarianism  Authoritarianism

Single charismatic leader
 No charismatic leader

Single dominant party
 Single dominant party

Utopian, forward-looking ideology
 Nationalist and
performance-based ideology



State control over all organized activity  Emergence of non-political
private sphere
Mobilized participation
 Apathy okay
Popular fear instilled by arbitrary terror End of fear and arbitrary terror
no organized opposition allowed
Upcoming Topics
Part II: Institutions

1: Institutions of the Party-State and State Capacity
 Can


2. Leadership Selection and Authoritarian Resiliance
 Central elite politics
 Local elections
3: Civil Society
 Can

the state control its own agents?
the state control society?
4: Media/Internet Politics
 Is
the internet a virtual “civil society” and can the state
control media and the internet?
 Conversely, how effective is the media as a watchdog?
Upcoming Topics
Part III: Governance Issues






1. Labor
2. Environment (DEBATE)
3. Inequality and Social Welfare
4. Religious and Ethnic Minorities
5. Nationalism
6. Taiwan
Institutions of the Party-State


Major debate about the capacity of the Chinese
state
Defining terms
 State
capacity +
Institutions of the Party-State


Major debate about the capacity of the Chinese
state
Defining terms
 State
capacity*
 Ability




of state to
penetrate society
regulate social relationships
extract resources
use them in intended ways
*Joel Migdal, Strong Societies and Weak States
 Pei’s terms: mobilizing political support, providing public
goods, and managing internal tensions
Institutions of the Party-State

Major debate about the capacity of the Chinese
state
 Where
does Pei Minxin stand?
 Alternative
argument: Yang Dali +
Institutions of the Party-State

Major debate about the capacity of the Chinese
state
 Where
does Pei Minxin stand?
 Alternative argument: Yang Dali*
 China
has made significant institutional reforms to improve
governance
 Critique: strong on policy; weak on implementation
*Remaking the Chinese Leviathan

Now let’s look at some empirical evidence to assess
the relative merits of each side in the debate.
Institutions of the party-state
8
1) How is the party-state structured?
2) What are the mechanisms of party control?
Review: Chinese Communist Party parallels
and dominates all other state institutions
9
Communist Party
legislature
executive
General Secretary
Chairman
Premier
(Hu Jintao)
(Wu Bangguo)
(Wen Jiabao)
Politburo of
National
Central Committee People’s Congress
State Council
party structure
Traditionally a
parallels and
rubber stamp for
dominates all other
party decisions;
elements of the state nominally elected
bureaucracy
but party supervises
nomination of
candidates
implements party
policy;
oversees all
government
ministries, stateowned factories,
schools, etc.
(Stay tuned for more on interest representation by NPC and Local Peoples’ Congresses)
Review:
5 Levels of Government; 6 Levels of Party
10





Central level
Provincial level
Municipal /prefectural level
County level
Township level
(lacks full complement of government offices)

Village (party only)
(more on village elections in Session #12)
Institutions of the party-state
11

What are the mechanisms of Leninist party control?
 Democratic
centralism
 Party discipline
 Applies
 Central
to 82 million party members (~5-6% of population)
Commission for Discipline Inspection
 Monitors

corruption within party
Harvard’s Samuel Huntington (Dali Yang, p. 49)


“Organization is the road to political power, but it is also the foundation of
political stability and thus the precondition of political liberty.”
Love to hate?
Institutions of the party-state
12

What are the mechanisms of Leninist party control
within and beyond the CCP?

Nomenklatura

List of positions for which party vets candidates

Examples beyond the party itself +
Institutions of the party-state
13

What are the mechanisms of Leninist party control
within and beyond the CCP?

Nomenklatura

List of positions for which party vets candidates

Examples beyond the party itself
 Government executives
 Standing Committees of People’s Congresses
 Editors of major newspapers
 University leadership
 Trade Union leadership
 Buddhist Association, Chinese Catholic Church leadership
 Lawyer’s Association leadership
 State-owned corporation leadership
Institutions of the party-state
14

What are the mechanisms of Leninist party control
within and beyond the CCP?
 “Double-hatting”
 Concurrent

party and other positions
Village head and village party secretary concurrently
 “Interlocking
 Example:


 Party
directorates”
Ma Wen
Minister, Ministry of Supervision (government)
Deputy Secretary, Central Commission for Discipline Inspection (CCP)
core groups and party committees
 Example:


Party group (党组) in leadership of local People’s Congress
Must follow party line
Institutions of the party-state
15


Problems with Leninist party leadership: competing sources of
authority
Vertical-horizontal relations (tiao-kuai guanxi 条块关系）

Examples:

Horizontal: territorial governments like a county


Vertical: substantive agencies




County party secretary is ultimate local authority (一把手)
National tax office (国税局) at county level
Environmental protection agency at county level
People’s Bank county-level branch
Local Communist Party secretaries often hold sway over
bureaucrats in the local offices of central agencies

Ex: local environmental protection bureau

Less likely to implement the policies of the State Environmental Protection
Agency if the local CCP party secretary cares more about industrial
output and jobs then clear air or water
Institutions of the party-state
16

Premise: What do local leaders (cadres) care about?
 Political careers Leading cadre evaluation system


Specific, measurable, quantifiable criteria
Linked to “high-powered” incentives

Promotion prospects




Determined by performance on key targets
Bonuses (often as much as the base salary itself)
Important for signaling the priorities of higher levels
Shifting emphasis—demonstrates political learning


Economic: output  sales
Economic  political


With privatization, cadres directly manage fewer enterprises
With “losers” emerging during the later reform process, more protests, seen as
threats to CCP control
Institutions of the party-state


How to conceptualize cadre management?
Principal-agent problem
 Who
are the principals?
 Who are the agents?
 What are the defining characteristics of the principalagent problem?
Institutions of the party-state

Principal-agent problem
 Defining
 Interest
characteristics
conflict
 Information asymmetry
Institutions of the party-state

Principal-agent problem
 Analytical
 “Moral

insights
hazard”
Performing only to measured criteria
 Investment in environmental infrastructure
 Equipment subsequently disabled
Institutions of the party-state

Leading cadre evaluation system as a principalagent problem: gaming the system
 Early
example (GVIO 工业总产值)
 Politically
 Current
motivated bank loans to local enterprises
example (Investment 招商引资)
 Manipulate
requisitions of rural land for development
Contrast Dali Yang p. 48 (auctions)
 QUESTION: Dali Yang: “rent seeking”

Institutions of the party-state

Principal-agent problem
 Analytical
insights
 Multitask
problem


Difficult to promote multiple targets simultaneously
Example: environmental protection targets vs. growth/investment
Institutions of the party-state

Principal-agent problem
 What
does this framework miss analytically?
Institutions of the party-state
23

Questions for discussion:
 What
aspects of the system promote effective policy
implementation?
 What are the structural obstacles to effective
governance?
 To whom are local cadres accountable?
Fiscal Policy in State Capacity
24


Why is central fiscal capacity important?
Is Dali Yang’s optimism justified?
p.44
Fiscal Policy Background

1994 tax and fiscal reforms
 Established
National Tax Service
 Collects
central and shared taxes
 Leaves local taxes to be collected by Local Tax Service
 Stemmed fiscal crisis

Budgetary revenue as share of GDP (pdf)
 1994 10.8 percent
 2005 17.3 percent
 Centralized
 Center’s


control over fiscal revenue
share of budgetary revenue increased (pdf)
1993 = 22 percent
Since 1994 > 50 percent
25
Fiscal Policy Background

1994 tax and fiscal reforms
 However,
continued decentralized expenditure responsibility
 Implications
for local governments
26
Implications of Fiscal Policy

Fiscal gap
 40-45
percent covered by local and shared taxes
 40-50 percent of fiscal needs covered by
intergovernmental fiscal transfers
 5-10 percent of fiscal needs unmet
(Wang Yongjun estimate 2006)
27
Central-local regular intergovernmental
fiscal transfers (equalizing)
2005年中央对地方一般性转移支付地区分布图
51.3
5%
537.4
48%
东部地区
531.5
47%
中部地区
西部地区
Intergovernmental fiscal transfers to
support rural tax/fee reform (equalizing)
农村税费改革转移支付
700
600
500
400
300
200
100
0
661
523
245
305
80
2001年
2002年
2003年
2004年
2005年
Earmarked intergovernmental fiscal
transfers (often disequalizing)
1994-2004年中央对地方专项转移支付（单位：亿元）
3423 3517
2237
1360
2435 2425
1648
889
360 375
489
516
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Implications of Fiscal Policy
Source: Rozelle (Stanford)
Implications of Fiscal Policy
Source: Rozelle (Stanford)
Implications of Fiscal Policy
Source: Rozelle (Stanford)
Implications of Fiscal Policy
Source: Rozelle (Stanford)
Implications of Fiscal Policy
Implications of Fiscal Policy

High degree of dependence on fiscal transfers for
local governments
 Only
some are equalizing
 More transfers directed to poorest areas after 2004

Reliance on off-budget funds and local government
debt
 Use
land to generate local tax revenues
 Exacerbated by political pressures (tenure, promotion
criteria), unfunded mandates
36
Fiscal Policy in State Capacity
37


Why is central fiscal capacity important?
Is Dali Yang’s optimism justified?
p.44