Research

Summary: Policymakers face a trade-off between using rules to monitor agents and delegating discretion to them for carrying out policies. Rules enable specific constraints but require policymakers to draft detailed regulations, while delegation entails lower drafting costs but risks abuse of discretion by agents to their own advantages. This trade-off is more pronounced when institutions of bureaucratic oversight are weak. I apply natural language processing to analyze an original dataset of 319,000 Chinese local regulatory documents from 2010 to 2022, each highlighting one government policy. Empirical results show that for policies with higher drafting costs, policymakers are more likely to delegate to lower-level agents discretion over policy procedures, or set targets of policy outcomes for ex post oversight. Furthermore, a difference-in-difference estimation based on an administrative reform creating exogenous variations in drafting costs across different policy domains suggests that rising drafting costs increase discretion delegation and target setting.

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.

Abstract: This paper investigates how misperceptions about non-monetary and monetary aspects of government jobs affect individuals' propensity to choose a civil service career in China. Based on a survey sample of more than 2,000 college students in China, we document the prevalence of misperceptions about promotion opportunities, compensation, and housing benefits in government jobs among Chinese college students. When misperceptions are corrected using a survey experiment, we find that individuals who overestimate (underestimate) promotion prospects, compensation, and housing benefits significantly decrease (increase) their interest in government jobs. Moreover, we find that individuals who are more prosocial would increase (decrease) their interest in government jobs more than others, when their underestimation (overestimation) of promotion prospects is corrected. These results indicate the significant impact of non-monetary aspects of government jobs on bureaucratic selection; they also point to an important—but previously understudied—role played by misperceptions in individual preference for a career in government.

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.

Abstract: A growing literature examines intergovernmental lobbying in democracies, yet comparative analysis in authoritarianism remains nascent for theoretical and empirical challenges. Consequently, existing accounts often portray authoritarian distributive politics as purely top-down, overlooking local agency in resource allocation. We argue that in authoritarianism with strong personnel-management institutions, peer competition can incentivize local officials to bypass immediate superiors and lobby higher-level authorities which control resources critical to promotion. To identify such bottom-up influence, we study the novel case of Beijing Liaison Offices (BLOs) in China, an organized yet informal channel through which Chinese county governments lobbied central ministries. We show that politically competitive counties were more likely to install BLOs and secured greater discretionary transfers during the 2008 crisis stimulus. Difference-in-differences analyses of the 2010 nationwide BLO closure reveal significant declines in transfer-funded expenditures, local economic development, and officials’ promotion prospects in previously BLO-linked counties, independently of top-down political connections.