Economic Development、social Expenditures And Political Incentives

Three decades of Reform and Opening up, China’s economic society has undergone enormous changes. At present, China’s economy in the world ranked second after the United States, more predict that, to maintain the current growth rate, China’s economy in2020will surpass the United States; the national per capita GDP in2010is close to$5,000, calculated by average exchange rate of the year2010, the British "Economist" magazine wrote that China’s per capita GDP in PPP terms has reached$8400. Regardless of what kind of data more truly reflects the actual situation in China, one thing is certain, since the Reform and Opening up policy, China has created a remarkable economic miracle, and economic success greatly enhances China’s comprehensive national strength and people’s living standards. China’s miracle has been attracting the attention of domestic and foreign scholars:the same Eastern European countries, transformed from planned economy, has made great progress in economy in recent decades, but the progress they made can only be said to be mediocre when compared to the success in China; The other countries of East Asia, with the same cultural roots as China, have made great success in economy by protection of private property rights,but with relative lack of private property rights protection, China also achieves economic off; India, compared with China, with the advantage of adequate human resources and even closer relationship with western developed countries, achieves less success in economy, many scholars try to explain China’s economic miracle in respects of the culture, system of property rights,human resource, but no convincing answer has been provided.Among the scholars who try to explain China’s economic miracle, there are some focus on the political incentives offered by the China’s central government, they believe that it is the China’s highly centralized political system that guarantees the incentives of local government to boost economy. By relating officials’ political promotion to economy development of their administration area, the central government motivates the whole bureaucracy to find ways to boost economy.Most of the analysis on the relationship attach much importance to the economy growth rate, whereas, the relationship between the quality of economic growth and political promotion attracted less attention. So, whether the local bureaucracy has the incentive to improve the quality of economic growth? Especially, after the scientific development concept was proposed by the central government, is there relationship between the quality of economic growth and political promotion?These problems are not answered yet, and they are exactly what this paper tries to resolve.The thread of thought of this article is:First, assume that what the local government endeavors to do is to meet the political assessment by the central government; Then, use the ordered probit model to verify the assumption by analyzing the correlation of the quality of economic growth and some other factors concerning to civil People’s livelihood with political promotion; Then in the last part, to get conclusions from the empirical analysis.The conclusions from empirical analysis are as follows:(1) The average annual economic growth in the tenure of the local government chief has no significant effect on their political promotion, while the difference on economic growth with their predecessor has more significant effect on their political promotion.(2) The significance of economic growth on political promotion differs between the provincial party secretary and government chief. In a word, the government chief are more affected by the economic growth in their tenure.(3) Energy saving and environment protection affects political promotion of the government chief more than the provincial party secretary.(4) Social expenditures in annual government fiscal expenditures doesn’t have significant effect on the political promotion of both the provincial party secretary and the government chief.The analysis on the relationship between the performance of government chiefs and their political promotion in this paper also has some deficiencies:First, the assumption of all levels of government officials have the similar political incentives are too strict; Second, the assumption that the local governments have administrative and economic resources needs to be broadened; Third, the empirical analysis is based on the assumption that the ways the central government uses to assess the performance of local officials are not changed, but the reality may be that the central government gives up the way so-called "relative performance evaluation".