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A Model of Chinese Central Government: the Role of Reciprocal Accountability

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  • Mario Gilli
  • Yuan Li

Abstract

Why was the same state in China able to promote economic growth in the reform era but not in the previous thirty years? In this paper we focus on a speci c aspect that might help the search for a comprehensive explanation: the speci c institutional arrangement that induced autocratic government to adopt growth-enhancing policies. To this aim, we consider a standard political agency model (Besley, 2006) where the incumbent leader may be either congruent or not, and where both types need the support of the selectorate to hold on to power. Our main result is that in autocracies without electoral discipline, to restrain the opportunistic behavior of a leader, the size of the selectorateshould be intermediate: if too small, the selectorateis captured by the leader and has no disciplinary role; if too big, the leaders incentives are diluted.

Suggested Citation

  • Mario Gilli & Yuan Li, 2013. "A Model of Chinese Central Government: the Role of Reciprocal Accountability," Working Papers 230, University of Milano-Bicocca, Department of Economics, revised Feb 2013.
    • Handle: RePEc:mib:wpaper:230
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    References listed on IDEAS

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    1. Besley, Timothy & Kudamatsu, Masayuki, 2007. "Making autocracy work," LSE Research Online Documents on Economics 3764, London School of Economics and Political Science, LSE Library.
    2. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-1162, December.
    3. Lawrence J. Lau & Yingyi Qian & Gerard Roland, 2000. "Reform without Losers: An Interpretation of China's Dual-Track Approach to Transition," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 120-143, February.
    4. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    5. Yingyi Qian & Barry R. Weingast, 1996. "China's transition to markets: market-preserving federalism, chinese style," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 1(2), pages 149-185.
    6. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1992. "The Transition to a Market Economy: Pitfalls of Partial Reform," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 889-906.
    7. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
    8. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mario Gilli & Yuan Li, 2014. "Accountability in One-Party Government: Rethinking the Success of Chinese Economic Reform," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(4), pages 616-645, December.
    2. Yuan Li, 2014. "Downward accountability in response to collective actions," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 69-103, January.
    3. Mario Gilli, 2012. "A Simple Model Of Repression And Revolt In Autocracies Applied To The Arab Spring," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 14(04), pages 1-29.
    4. Mario Gilli & Yuan Li, 2021. "Selectorate’s information and dictator’s accountability," Conflict Management and Peace Science, Peace Science Society (International), vol. 38(5), pages 524-542, September.
    5. Li, Yuan, 2013. "Downward Accountability in Response to Collective Actions: The Political Economy of Public Goods Provision in China," Stockholm School of Economics Asia Working Paper Series 2013-26, Stockholm School of Economics, Stockholm China Economic Research Institute.
    6. Gilli, Mario & Li, Yuan, 2012. "Citizenry Accountability in Autocracies: The Political Economy of Good Governance in China," Working Paper Series 2012-23, Stockholm School of Economics, China Economic Research Center.
    7. Jiancai Pi, 2017. "An economic analysis of the political promotion system in China," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 35(2), pages 375-390.
    8. Mario, Gilli & Yuan, Li, 2018. "Transitions and Political Stability in Autocracies. The Role of Public Perception," Working Papers 383, University of Milano-Bicocca, Department of Economics, revised 13 Jul 2018.
    9. Li, Yuan & Gilli, Mario, 2014. "Accountability in Autocracies: The Role of Revolution Threat," Stockholm School of Economics Asia Working Paper Series 2014-30, Stockholm School of Economics, Stockholm China Economic Research Institute, revised 06 Mar 2014.
    10. Gilli, Mario & Li, Yuan, 2015. "Coups, revolutions and efficient policies in autocracies," European Journal of Political Economy, Elsevier, vol. 39(C), pages 109-124.

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    More about this item

    Keywords

    Accountability; Selectorate; Political agency; Chinese economic reform.;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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