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Is public spending behavior important for Chinese official promotion? Evidence from city-level

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  • Que, Wei
  • Zhang, Yabin
  • Schulze, Günther

Abstract

This paper aims to examine the effect of public expenditure on local officials' promotion. The main objectives of this study are as follows. Firstly, we seek to discuss if the expansion of public spending will contribute to local official promotion. Secondly, we analyze, if the positive effect is possible, how is the influence of expenditure structure on official promotion; for example, what is the different between the effect of productive expenditure and welfare expenditure. Finally, we also examine the hysteresis effect of local official promotion. The panel data from 284 Chinese cities for the period of 1990–2016 are estimated using the probit model. The major findings are the following: (1) fiscal gap will positively affect officials' promotion; and (2) basic construction expenditure and official's promotion is positively correlated; however, (3) education expenditure's effect on officials' promotion is negative; and (4) real estate investment improve officials' position in the promotion championship; and finally, (5) in the early stage of official change, public expenditure and investment will statistically significant than the latter stage.

Suggested Citation

  • Que, Wei & Zhang, Yabin & Schulze, Günther, 2019. "Is public spending behavior important for Chinese official promotion? Evidence from city-level," China Economic Review, Elsevier, vol. 54(C), pages 403-417.
    • Handle: RePEc:eee:chieco:v:54:y:2019:i:c:p:403-417
    DOI: 10.1016/j.chieco.2019.02.003
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