Familiarity breeds growth: The impact of factional ties on local cadres’ economic performance in China

Abstract

Some attribute China's rapid economic growth to a cadre promotion system that rewards economic performance. Others argue that political promotion in China hinges on factionalism. Extant empirical studies often assume that performance can be measured independently from the effect of factionalism. We test the validity of this assumption by examining whether local cadres’ economic performance would change as a result of losing vertical ties to a higher authority. We find an immediate increase in the growth rates of local GDP and government revenue. However, the performance change is mediated by the type of succeeding leaders, as it occurs only under locally promoted leaders who have existing ties with the local cadres. We further examine various channels through which a leader's insider status may affect local economic performance and find that newly appointed outsider leaders would cut fiscal transfers to the local level, which may explain the drop in their short‐term performance.

Does the power of the king stop at the village gate? Embeddedness and provincial development in Vietnam

“…Of most relevance to the current paper, Wong and Zeng (2020) examine changes in the economic performance of prefecture‐level city mayors in China when governing provincial party secretaries are appointed from outside. They find that the performance of the city mayors only improves when their new party secretary is an insider, defined as someone who comes from the same hometown as the city mayors.…”

Time Is Power: Rethinking Meritocratic Political Selection in China

“…32Wong and Zeng 2020. We thank a reviewer for suggesting that we use an alternative method to operationalize factionalism.…”