Leadership Rotations and the Convergence of Subnational Economic Policies in China: Evidence from Provincial Government Work Reports

Lu, Jiaxuan (2023): Leadership Rotations and the Convergence of Subnational Economic Policies in China: Evidence from Provincial Government Work Reports. Forthcoming in: Journal of Law, Economics, and Organization No. ewac026

Abstract

This article examines how China’s subnational leadership rotations have affected local governments’ policy choices. Utilizing the annual government work reports that outline provincial policy priorities, I find that shuffled leaders choose similar economic policies across different provinces, and this translates into similarities in several policy outcomes. I then show that such policy isomorphism has been driven mainly by convergence in which topics these reports cover, rather than by convergence in how the provincial leaders discuss a given policy issue. However, according to the event study estimates, this economic policy similarity may disappear soon after the shuffled leader leaves office, thus implying that the policy convergence might be transitory. One plausible explanation for these findings is that leadership rotations often indicate that the central government favors the policies implemented by these shuffled leaders, so they tend to replicate some of these policies after moving to the destination province.

• Item Type: MPRA Paper
• Language: English
• Keywords: Leadership Rotation, Policy Diffusion, Regional Integration, Government Work Report, Chinese Political Economy
• Subjects: H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H70 - General

References

Lu, Jiaxuan. 2023. “Leadership Rotations and the Convergence of Subnational Economic Policies in China: Evidence from Provincial Government Work Reports." Journal of Law, Economics, and Organization, ewac026, https://doi.org/10.1093/jleo/ewac026