Decentralization, Power Check And Coordination: The Study Of Chinese Vertical Intergovernmental Relations

The decentralization movement after 1978 in China has changed the central-local relations gradually, but greatly. Although it makes local governments eager for economic development successfully, the restructuring of Vertical Intergovernmental Relations(VIGR) leads to some severe problems, such as the loop of decentralization and centralization, the selective implementing of policy, the central-local non-cooperative game and the malignant competition. These problems could be attributed to the vertical intergovernmental power structure and its mechanisms. This paper focuses on Chinese VIGR in the perspective of power distribution, check and coordination, and inquires the approaches to set up rational, legal intergovernmental relations in China. This paper is made up of five parts mainly, including the comparative study of decentralization, the study of Chinese VIGR evolution, the positive analysis of contemporary Chinese VIGR, the normative analysis of intergovernmental power structure and the normative analysis of mechanisms of power check and coordination.In the comparative study of VIGR in federal states (USA and Germany) and unitary states (Britain and France), it is concluded that although the unitary states are linked with centralization, they could be decentralized too. Moving for the balance of decentralization and centralization and strengthening the vertical intergovernmental cooperation is the common feature in both federal states and unitary states nowadays.In the planning economy era, there were several movements of decentralization and centralization in Chinese central-local relations. There is a famous loop, centralization, decentralization, re-centralization, and re-decentralization. The VIGR of the time was lack of institutionalization, and linked with centralization closely. In the reform era, under the influence of marketization, Chinese VIGR begins to replace the centralization structure by the decentralization one, puts emphasis on the legalization and institutionalization. The central government carries out three strategies, i.e. the selective centralization, multiple decentralization and special devolution, to put forward the market economy system.In the positive analysis of contemporary Chinese VIGR, we put emphasis on the public service duties, financial power and personnel control. As to the public service duties, we could find there is organizational and functional isomorphic by the law analysis. And we could find that local governments deliver public services by the measure of expenditure. As to the financial power, the central government has control most of the revenue after the establishment of tax-sharing reform in 1994, and the local governments are dependent on the central government to a large extent. As to the power of personnel appointment, the up-down appointment system is strengthened although the central government devolutes some power to local governments. As a result, the central government put local governments under its control tightly. However, the dilemma that local governments face in the delivery of public services, which is due to the imbalance of duties and money, has resulted in the selective implementation of public policies and the fake governance. The information asymmetry helps local governments follow this strategy. The weaknesses in Chinese VIGR put negative influences on the anti-corruption, market integration, social stability and governmental innovations. It leads to severe problems in these areas.The improvement of vertical governmental power structure should follow these principles, such as the balance of central government interest and local government interest, the balance of decentralization and centralization, and the principle of power check and coordination. There are three approaches to improve the vertical power allocation:(1) dividing the public service duties and financial power between the central government and local governments rationally, making local governments have enough revenue to carry out their functions; (2) allocating the production functions of public services among different level of government; (3) legalizing the vertical intergovernmental power allocation, to make VIGR stable.It is necessary to replace traditional specialization-based coordination by the power-check-based coordination in the improvement of the mechanism of VIGR. The triangle-like relation among the central government, local governments and the people is a reliable basis for vertical intergovernmental power check. As to the power check mechanism, it suggests that we should reinforce both the top-down power check mechanism and the bottom-up one, and construct a stable triangle with the social power. As to the power coordinating mechanism, it suggests that there are three alternatives:(1) making the approaches for local interest express better, and setting up institutionalized channels for local governments participating in the decision-making equally; (2) setting up the incentive mechanism for intergovernmental cooperation, especially making a scientific index of performance appraisal to encourage the cooperative behavior; (3)constructing effective mechanisms for intergovernmental dispute settlement, including law-making, organization and procedures.