Choice Behavior Of Local Government In China

In China, local governments have been caught in an embarrassing situation. While some scholars regard them as major contributors to the rapid economic growth, others argue that they are the resource of the economic and social problems. While they hit the expectations of the central government regularly, local residents don't trust in them. This embarrassing situation is the result of the choice behavior of local governments.Most research on the choice behavior of local governments takes the principal-agent perspective. In China, administrative power of local governments comes from the people; therefore scholars always treat the relationship between central and local governments as the core issue. However, those studies ignore that there is a prismatic society in China. In the prismatic society, the choice behavior of local governments is affected by non-political systems.In this paper, we try to propose an analytical framework for choice behavior of local government in China. The analytical framework is based on the institutional logics approach, which refers to both organizational structure (such as the relationship between central and local governments) and organizational environment (such as the market, culture).The new analytical framework intends to respond to three questions. First, what institutional logics limit the choice behavior of local governments? Second, how do those institutional logics shape the behavior of local governments? Third, to what extent is the choice behavior of local governments constrained by the institutional logics? Therefore, the new analysis framework includes three aspects:(1) The institutional environment facing local governments has undergone a crucial change due to China's economic reforms since 1978. Before 1978, the state logic determined the choice behavior of local governments. After 1978, in order to promote economy, the government gave up the domination of the state logic in the economic field. As a result, lots of institutional logics appeared, such as the market logic, the bureaucratic logic, and the social logic. Those institutional logics determine not only the purpose of local governments, but also the means of local governments. (2) Local governments share goals and take the same strategy, because of the combined effect of multiple institutional logics. We define logical field as those institutional logics which interact with each other and constitute a recognized behavior area in aggregate. In the economic field, the objective of local government is the economic development, and the strategy is district marketing. In the field of social welfare, the objective is the low supply, and the strategy is the minimum implementation of the central government's welfare policy. In the field of social order, the objective is avoiding social crisis, and the strategy is opportunistic.(3) Local governments get diversified performance according to different agency. The agency is defined as the capacity to act on one's own will. Although the choice behavior of local governments constrained by the institutional logics, local governments still have the capacity to act independently. There are two aspects to understand the agency of local governments. First, local governments have the ability to change the extent to which they are embedded in the logical field. Second, local governments have the capacity to adapt to changing conditions.This study demonstrates that the choice behavior of local governments constrained by the logical field. Local governments will be locked in the embarrassing situation, unless the logical fields are changed.