Weak law enforcement is usually blamed for the dramatically deterioration of environment in China. Using a panel data covering 287 Chinese prefecture-cities during 2004-2011, we investigate the role of local officials turnover and institutions in improving law enforcement and mitigating water pollutions. We show that water pollution deteriorates with the tenure of incumbent mayors, mayors’ turnover and institutional quality, e.g., executive constraints, are associated with lower pollution, and personnel turnover and institutions complement with each other in mitigating pollution. We also suggest some channels through which personnel turnover affects water pollution: personnel turnover undermines collusion between local officials and polluted firms, stimulates subordinates to exert more efforts to implement environmental policies, and might cause policy discontinuities. In general, we illustrate that cadre’s turnover has only limited and temporary effects in law-enforcement.

One of the central themes in political economy is how power arrangements among ruling elites shape policy outcomes. This paper argues that under weak legal systems, the need to preserve power balance within local leadership might cause inefficient targeted redistribution towards bureaucratic interest groups, consequently government oversizing. We exploit the institutional features of Chinese Communist Party local standing committee (SC), the de facto decision-making body in each level, and construct an index to describe the constraints on the power of heads (Party secretaries) imposed by other SC members. We develop a simple bargaining model to formulize the logrolling within the SC, and derive the predictions regarding the number of senior cadres and the power structure within the standing committee. The empirical results support our main theoretical predictions. It is shown that more internal constraints on secretaries are associated with the increasing senior cadres. However, the secretary’s external power status significantly mitigates this influence. These results are robust against a variety of specifications and estimation strategies. We also rule out alternative explanation of our empirical results, and discuss other channels through which the power of secretary might affect the balance among local political elites. Our theory and empirical results suggest that it is better to consider the Chinese subnational leadership as a collection of agents, and the power struggle within them play an important role in policy outcomes.

Love Me, Love My Dog: An Experimental Study on Social Connections and Indirect Reciprocity (joint with Juanjuan Meng), Under Review.

Indirect reciprocity refers to the behavior in which, upon receiving a transfer from a donor, the recipient is willing to repay a third party beneficiary in a one-shot interaction. Our lab experiment shows that the recipients’ repayment to the beneficiaries increased significantly when beneficiaries and donors had prior social connections, especially when the donor was generous initially. This effect is not from social connections implicitly revealing donors’ expectations, as a structured message from the donors asking for favorable treatment of the beneficiaries did not affect the recipients’ transfers. Altruism with an endogenous reference group is the promising theory to explain the role of social connections. 

Optimal Hierarchical Delegation with the Possibility of Skip-level Intervention. 

A Field Experiment on Social Distance and the Willingness to Help (joint with Fangfang Tan, Erte Xiao)