Local Governance Innovation in China

Experimentation, Diffusion, and Defiance

Jessica C. Teets, William Hurst

• Publisher: Routledge
• Year: 2014
• Print ISBN: 9780415747851
• eBook ISBN: 9781317751663
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: American Government
• Index: Politics & International Relations

Despite a centralized formal structure, Chinese politics and policy-making have long been marked by substantial degrees of regional and local variation and experimentation. These trends have, if anything, intensified as China's reform matures. Though often remarked upon, the politicsof policy formation, diffusion, and implementation at the subnational level have not previously been comprehensively described, let alone satisfactorily explained.

Based on extensive fieldwork, this book explores how policies diffuse across China today, the mechanisms through which local governments actually arrive at specific solutions, and the implications for China's political development and stability in the years ahead. The chapters examine how local-level institutions solve governance challenges, such as rural development, enterprise reform, and social service provision. Focusing on diverse policy areas that include land use, state-owned enterprise reform, and house churches, the contributors all address the same overarching question: how do local policymakers innovate in each issue area to address a governance challenges and how, if at all, do these innovations diffuse into national politics.

As a study of local governance in China today, this book will appeal to both students and scholars of Chinese politics, comparative politics, governance and development studies, and also to policy-makers interested in authoritarianism and governance.

1 Diffusion of policy defiance among Chinese local officials

Ciqi Mei and Margaret Pearson

Introduction

An underlying, if often unspoken, assumption about policy diffusion is that the process involves the spread of positive, even innovative, behavior. In this chapter, we explore a different type of diffusion: policy defiance – in which local officials explicitly fail to follow central directives – as a basis for theorizing about how policy “experiments” may spread throughout the Chinese political system. Our analysis centers on the incentive structure in which local officials operate, and that, over time, creates in them a shared belief that the costs of defiance against the central government are low. Defiant behavior is a shared rational response that diffuses horizontally as a result of local officials’ self-assessment of the risks and benefits of defiance to their political careers. In other words, we offer an explanation for why local officials think they can get away with defiance, despite seemingly strict central authority, and how these beliefs diffuse through the system.

In terms of the hypotheses about the patterns of diffusion offered in this volume’s introductory chapter, our case finds support for the idea that local officials face similar governance challenges across China, and that they respond similarly because of incentives with which they are presented by the structure of the political-bureaucratic system. At the same time, in contrast to the hypotheses suggested in the introductory chapter, our study does not find a link between factional politics and the diffusion of defiance behaviors.

Our theory of “defiance diffusion” developed from a case of policy defiance that garnered attention in China throughout 2003 and 2004. In this case, local steel manufacturers defied orders from the central government in Beijing to halt plans to expand steel production capacity, even after the local leaders (and firm heads) were threatened with severe sanctions and observed these sanctions carried out on a select few. But as we note below, ours is not the only such case of defiance, and therefore, we believe our conclusions are not simply limited to one case, but rather can be generalized across the system.

Explicit noncompliance – what we call “defiance” – carried out by local Chinese officials against the central party-state has long been noted as a hallmark of China’s Cultural Revolution (Heilmann and Perry, 2011). Yet defiance has occurred even in more politically stable times. Scholars have tended to view defiance by local officials as an extension of other bureaucratic behaviors in which local officials take initiative, including longstanding encouragement of local policy experimentation, the knowledge of local officials that complexities and information asymmetries inherent to administering a continental nation render supervision difficult, and reflection of local fiscal empowerment that was a hallmark of the early reform era.

However, we see blatant defiance as a distinct phenomenon from local initiative and other forms of local autonomy in China. The Chinese central government, while often encouraging local discretion and experimentation, at other times has considered it to be a thorn in its side. The People’s Republic of China (PRC) is a unitary state (versus federal), and the central government has, if anything, over the past decade and a half taken back power at the center and set up outright sanctions for defiance. As we shall discuss, the effort to control “excessive” growth through the imposition of economic retrenchment policies – with strong sanctions attached – is a policy arena in which local autonomy has repeatedly faced central attempts to rein in local officials. More generally, starting from the 1990s, after years of economic reform that featured comprehensive decentralization to subnational governments, the PRC government has overseen a steady trend to recentralize and rationalize its political management system (Yang, 2004; Mertha, 2005; Pearson, 2005).¹

Most important, the Chinese government has kept intact its most potent tool for control over local officials: the top–down cadre management system rooted in its Soviet heritage. Although the central party personnel organs only appoint and manage officials at the provincial level (“one-level-down”), under the assumption of a unitary system that authority is transitive at each administrative level, this same system replicates itself down to the grassroots level (Manion, 1985; Huang, 1995). Local officials, whom scholars commonly view to be driven by the desire for career advancement (Blanchard and Shleifer, 2001; Zhou, 2004) or career security (Edin, 1998; Tsui, 2007), are theorized to be incentivized or coerced by this promotion system to implement policy mandates that might otherwise be incompatible with local officials’ interests.

The Hu-Wen administration (2002–2012) rejuvenated the cadre appointment system in order to induce or coerce local officials to follow mandates from above. Local officials, especially those at designated leading positions (such as party secretary of the relevant unit), are required to take responsibility for the implementation of the center’s most urgent policy goals. Local leading officials who fail to perform a duty, or to perform it correctly, are to be “held-to-account” (wenze), that is, to be disciplined or even removed from their positions.² The new system raises the stakes of local officials’ defiance in two ways. First, the “hold-to-account” practice clearly specifies the punishment for noncompliance. Whereas most top–down policy programs in China have reward and punishment terms attached – especially in those with target responsibility systems designating specific policy goals for each implementer – previously these punishment terms were often vague. In contrast, in the new “hold-to-account” system, it is made clear that punishment of transgressors might range from extraction of a forced apology to forced resignation.³ As career advancement is a major incentive for China’s local officials,⁴ the use of harsh political sanctions against those who defy can be expected to constrain cadre behavior. Thus, compared with previous uses of the cadre management system to gain compliance, the “hold-to-account” practice explicitly raises the stakes of noncompliance by local officials, and might be expected to halt local policy deviation and its diffusion to other localities.

Second, the “hold-to-account” practice specifically targets a jurisdiction’s leading officials such as party secretary or government chief.⁵ In contrast, previous punishment terms often did not have a clear target or targeted only those in nonleading or unimportant positions.⁶ Given the unchecked administrative power that leading local officials have in China, the center’s threat to hold them accountable shows a determination to enforce policy implementation.

The center thus has given itself a “political trump” (Tsui, 2007), that is, an enhanced ability to reward or punish local officials, to solve the problem of policy implementation in China. Indeed, the central government has shown its resolve to use this “hold-to-account” practice at several high-profile moments. The example cited most often is the forced resignation of the Beijing mayor and the national health minister in the 2003 severe acute respiratory syndrome (SARS) crisis. After the center set this example (to great publicity), local officials – who had been criticized for their sluggish response to the pandemic – moved quickly to respond to Beijing’s call for effective handling of the pandemic. The success story of accountability to the center during the SARS crisis initiated the subsequent “hold-to-account” system.⁷ But could use of this political trump engender similar deterrence effects, inducing compliance from the many by sanctioning a few, in other policy areas?

The “hold-to-account” practice has since been adopted in the implementation of several high-profile top–down policy initiatives, for example, protection of arable land, regulation of workplace safety, and regulation of excessive capital investment. Beijing has disciplined a number of leading local officials as examples to deter further transgression in other localities.⁸ However, the success of selective sanctions is at best undetermined in these cases. In the 2004 case we examine in detail in this chapter, in an effort to limit investment in China’s iron and steel industry, eight officials including the party secretary of a major city were disciplined by the center for illegally approving an expansion and land acquisition plan of Tieben Steel, a private iron and steel manufacturer. With the clear expectation that the punishment of the local officials would deter other local leaders from encouraging investment in the overheating iron and steel sector, central officials were frustrated by the fact that the overall production capacity of iron and steel kept increasing at an annual growth rate of over 20 percent, similar to the growth rate before the Tieben Incident. As our case illustrates, local officials were definitely not deterred by explicit central efforts to check their behavior.

Why does such defiance continue despite the use of political trump tactics? We argue that local defiance in China is not so much due to the decline of the center’s political authority but, rather, the result of a dilemma intrinsic to the control mechanism used by the center. While some analysts correctly point to similar managerial dilemmas as reflecting a principal–agent problem, we argue more specifically that the dilemma lies in the bureaucratic control system itself. Using the “hold-to-account” mechanism, the sanctioning of transgressors is necessarily selective and not sustainable. In our case, a “shared belief”⁹ that the actual risks of defying the center are low seems quickly to have emerged among local officials; defiance was therefore a rational response, not generally to the center’s weakness but to the center’s use of the particular trump mechanism of “hold-to-account” itself. In other words, although local officials undoubtedly are aware of the center’s political clout, and in particular of their superiors’ power over their aspirations for promotion, nevertheless, the behavior pattern between the center and local officials that is repeatedly observed by other local officials – the pattern of selective sanction in the short run – generates among local officials a shared view that being sanctioned is an event of small probability and, even if an official is sanctioned, the cost in the long term is in fact not that high. The calculation based upon such a shared view is rather simple: it is worthwhile to local officials to defy the center if it brings them high long-term benefits in the context of the seemingly strict top–down sanction in the short run; defiance hence persists and is diffused.¹⁰

The chapter proceeds as follows. In the next section, we review two groups of theories from the study of Chinese bureaucratic politics that might be used to explain the prevalence – or diffusion – of local noncompliance China. Finding these insufficient, we then offer an alternative explanation that focuses on how selective sanctioning by the center (through the wenze system) has the potential to reset the shared beliefs of local officials about the risk of noncompliance and make defiance rational. We follow with our case study of the 2003–2004 Tieben Incident, which shows precisely how the center’s efforts to deter noncompliance in fact resulted in a version of local innovation of a sort not often considered in the literature on policy diffusion.

Existing explanations of noncompliance and defiance in China

As discussed above, a key characteristic of China’s top–down policy implementation process is that the superiors at the top try to produce desirable policy outcomes indirectly through bureaucratic control – especially control via performance evaluations and promotions (Huang, 2002). To induce compliance using indirect control mechanisms, the key question is “how to incentivize implementers?” Or, as Mao (1965) put it, “once the political line is determined, cadres are a decisive factor.”¹¹

Given the system was desi...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• List of maps
• Notes on contributors
• Preface
• Introduction: The politics and patterns of policy diffusion in China
• 1 Diffusion of policy defiance among Chinese local officials
• 2 Grassroots reactions to relocation: The diffusion of compensation strategies
• 3 “Flying land”: Institutional innovation in land management in contemporary China
• 4 Policy diffusion in corporate restructuring: Case studies of local government interventions
• 5 Grasping the large and releasing the small: A bottom-up perspective on reform in a county-level enterprise
• 6 China’s grassroots NGOs and the local state: Catalysts for policy entrepreneurship
• 7 Public security bureaus’ containment strategy toward Protestant house churches
• 8 Election reform from the middle and at the margins
• Conclusion: Compliance, resistance, innovation, and involution – Assessing the politics of experimentation and diffusion
• Index