The authors gratefully acknowledge the helpful comments and insights of Susan Shirk, Barry Naughton, Peter Drysdale, Lee Benham, Massimo Bordignon, Scott Gehlbach, Philip Keefer, Giovanna Iannantuoni, Ferdinando Colombo, Peter Murell, Hongbin Li, Victor Shih and Colin Xu. In addition, the authors are also thankful for discussions with the participants of the 15th Annual Conference of the International Society for New Institutional Economics; the Ronald Coase Institute 2010 Shanghai Workshop; the 34th Pacific Trade and Development (PAFTAD) Conference; and the 3rd Italian Doctoral Workshop in Economics and Analysis. Finally, the authors are grateful to Li Han, an anonymous referee, and the Editor for their very useful comments. Yuan Li also thanks the German Research Foundation (DFG Graduierten Kolleg 1613) for financial support.
A model of Chinese central government
The role of reciprocal accountability†
Article first published online: 14 JUN 2013
© 2013 The Authors Economics of Transition © 2013 The European Bank for Reconstruction and Development. Published by Blackwell Publishing Ltd
Economics of Transition
Volume 21, Issue 3, pages 451–477, July 2013
How to Cite
Gilli, M. and Li, Y. (2013), A model of Chinese central government. Economics of Transition, 21: 451–477. doi: 10.1111/ecot.12021
- Issue published online: 5 JUL 2013
- Article first published online: 14 JUN 2013
- Manuscript Accepted: 4 APR 2013
- Manuscript Received: 20 JUL 2011
- political agency;
- Chinese economic reform
Why was the Chinese State able to promote economic growth during the reform era, yet has been unable to do so over the previous 30 years? In this article, we focus on a specific aspect of the question, which will contribute to the development of a more comprehensive explanation: the specific institutional arrangement that may induce the autocratic government to adopt growth-enhancing policies. We consider a standard political-agency model (Besley, 2006) where the incumbent leader may or may not be congruent, and where, to maintain power, both leader types need the support of the selectorate, an elite group having a say in selecting the leader, as well as associated access to special privileges. Primarily, we find that in autocracies, without electoral discipline to restrain the opportunistic behaviour of a leader, the size of the selectorate should be intermediate; if it is too small, the selectorate is captured by the leader and has no disciplinary role, but if too big, the leader's incentives are diluted.