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

Research output: Journal article publicationJournal articleAcademic researchpeer-review

3 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)143-171
Number of pages29
JournalEconomics and Politics
Volume32
Issue number1
DOIs
Publication statusPublished - 1 Mar 2020

Keywords

  • economic performance
  • factionalism
  • GDP growth
  • government revenue
  • political selection

ASJC Scopus subject areas

  • Economics and Econometrics

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