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The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program

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  • Raymond Fisman
  • Yongxiang Wang

Abstract

We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of ‘death ceilings’ that, if exceeded, would impede government officials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths, suggesting complementarities between incentives at different levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet effects in the setting of death ceilings.

Suggested Citation

  • Raymond Fisman & Yongxiang Wang, 2017. "The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program," NBER Working Papers 23098, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23098
    Note: DEV LE POL
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Sam Watson’s journal round up for 10th April 2017
      by Sam Watson in The Academic Health Economists' Blog on 2017-04-10 15:00:00

    Citations

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    Cited by:

    1. Hanming Fang & Chang Liu & Li-An Zhou, 2020. "Window Dressing in the Public Sector: A Case Study of China’s Compulsory Education Promotion Program," NBER Working Papers 27628, National Bureau of Economic Research, Inc.
    2. Aney, Madhav S. & Ho, Christine, 2019. "Deadlier road accidents? Traffic safety regulations and heterogeneous motorists’ behavior," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 155-171.
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    4. Alan Benson & Danielle Li & Kelly Shue, 2018. "Promotions and the Peter Principle," NBER Working Papers 24343, National Bureau of Economic Research, Inc.
    5. Adnan Q. Khan & Asim Ijaz Khwaja & Benjamin A. Olken, 2019. "Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings," American Economic Review, American Economic Association, vol. 109(1), pages 237-270, January.
    6. Liangdong Lu & Hong Huang & Jiuchang Wei & Jia Xu, 2020. "Safety Regulations and the Uncertainty of Work‐Related Road Accident Loss: The Triple Identity of Chinese Local Governments Under Principal–Agent Framework," Risk Analysis, John Wiley & Sons, vol. 40(6), pages 1168-1182, June.
    7. Hao, Zhuoqun & Liu, Yu & Zhang, Jinfan & Zhao, Xiaoxue, 2020. "Political connection, corporate philanthropy and efficiency: Evidence from China’s anti-corruption campaign," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 688-708.
    8. Alan Benson & Danielle Li & Kelly Shue, 2019. "Promotions and the Peter Principle," The Quarterly Journal of Economics, Oxford University Press, vol. 134(4), pages 2085-2134.
    9. Shi, Xiangyu & Xi, Tianyang, 2018. "Race to safety: Political competition, neighborhood effects, and coal mine deaths in China," Journal of Development Economics, Elsevier, vol. 131(C), pages 79-95.

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    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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