Research

Summary: This paper examines how policymakers oversee bureaucratic agencies granted discretionary

power in weak institutional environments. In such contexts, where top-down control is the primary oversight mechanism and information, higher-level governments use rulemaking strategically to limit the discretion of subordinate agents. Using China as the case, I analyze 319,000 regulatory documents issued by Chinese local governments from 2010 to 2022, applying natural language processing to analyze rulemaking details. I document that bureaucrats deliberately fine-tuned regulatory rules, depending on policy-specific cost of stipulating contingency provisions — conditions that agents might encounter and responses required. When detailing contingencies is costly under weak institutions, higher authorities grant agents with discretionary power over procedures of policy implementation, set policy targets for ex post oversight, or combine both. Strategic rulemaking is an understudied tool for bureaucratic oversight in environments with limited external checks on bureaucratic power.

Summary: This paper explores a novel consequence of state power expansion in authoritarian regimes: attracting talent from society into the state. We analyze the impact of China's 2016 value-added tax (VAT) reform on citizens' preferences for state employment, revealed by participation in the National Civil Servant Exam (NCSE), a merit-based examination that selects entry-level government elites. We collect an original and comprehensive dataset of 166,012 government job openings posted in NCSE from 2010 to 2021. For each job opening, the dataset contains information about the number of applicants (2010-2021), applicants-recruitment ratio (2010-2021), and minimum entry written-exam score required for job interviews (2014-2021). Among all openings, we focus on tax-related state positions (around 50%).

Since the VAT reform replaced business tax (BT) with VATs which strengthened tax agency's power, we use a difference-in-differences approach that leverages pre-reform subnational tax composition variations. We find that the reform has attracted more and higher-quality individuals to tax-related state positions, particularly for state positions with greater power. We also conduct an original survey to show that exam takers perceive increased power and benefits in tax agencies after the reform. Evidence from Chinese General Social Surveys suggests the talent drawn to the state likely comes from the private sector.  Overall, our research indicates that state power expansion, when paired with merit-based recruitment, significantly influences talent allocation between the state and society in authoritarian settings.

Summary:  This study develops a theory of endogenous faction formation, where a faction’s success or failure hinges on members’ collective effort. The loyalty of factional members is crucial for facilitating coordinated action within the faction. We present a model to illustrate how a political leader cultivates a cohesive faction through strategic screening to identify and exclude opportunistic candidates while retaining loyal members. Using our theory to analyze factional politics in nondemocracies, we show that both the ex-ante distribution of loyalists in the candidate pool and the generosity in rewarding cooperative behavior exhibit a nonmonotonic relationship with the leader’s screening effort. We also show that the leader invests less effort in screening when the larger party in which the faction is embedded has a higher degree of institutionalization. Our model can be extended to incorporate continuous signaling, menu contracts, and intra-party factionalism, offering insights into the complex dynamics of factional politics in nondemocracies.

Summary: The U.S.’s quantitative easing policies have increasingly become more proactive and substantive. Existing scholarship finds that reiterations of the Federal Reserve’s balance sheet expansion and contraction have had clear economic spillover effects on financial markets across borders, given the dollar’s central position in the international monetary system. We argue that the quantitative easing policies of the U.S. also instigate political spillovers to economies that are more dependent on the U.S. capital market. Existing studies find that support for different political regime types often depends on the economic performance of the incumbent regime type, especially for autocracies. This implies that negative spillovers from the monetary policies of core economies can also influence the internal politics of peripheral economies. By focusing on annual deviations of the U.S. Federal Reserve’s balance sheet volume and their relationship to support for incumbent regimes, we find that increased volatility in the Federal Reserve’s balance sheets significantly decreases support for the incumbent political regime in autocracies but does not meaningfully influence support for democracies that have higher financial dependence on the U.S. capital market. This variance is explained by the varied impact of the Federal Reserve’s balance sheet volatility on critical economic parameters, which in turn, is explained by the selective extension of bilateral swap arrangements from the Federal Reserve.