Building local state capacity in China

This thesis studies the attempts of local Chinese governments to build state capacity to promote economic growth in the last two decades of the 20 th century when China embarked on a tortuous economic transition process.; Based on the development experience of several regions in China, this thesis delineates major features of the contemporary Chinese state and describes the administrative reform efforts of local governments. Since the key to understand the performance of Chinese governments is the political institutions that motivate and constrain local state officials, this study focuses on the major institution that governs their career prospects: the "nomenklatura" system. Under this system, the communist party committee under the leadership of the party secretary at each administrative level monopolizes the screening and appointment of leaders and officials at the lower administrative levels. The domination of party committees by the party secretaries in the 1980s and 1990s led to rampant patronage politics, which bloated local state bureaucracy and compromised the commitment of local officials to the welfare of local residents.; Repeated efforts initiated by the central government to curb local state expansion and streamline local bureaucracy have not been successful due to resistance of local bureaucrats and a lack of leadership commitment. Only in a few regions where bureaucratic pathology incurred financial crisis were committed leaders able to push through certain measures to restructure the cumbersome bureaucracy.; Since most local governments oversaw a sprawling public sector, the local economy was adversely affected by a bloated and undisciplined bureaucracy as well as a local party and state leadership lacking commitment to long-term economic growth. Moreover, the patronage ties between local leaders and state enterprise managers compromised the accountability of the latter for the performance of local state firms. Furthermore, with little autonomy and meager rewards due to excessive meddling of local state agencies, managerial staff of public enterprises lacks a strong incentive to improve their financial performance. Sustainable growth is only possible when local governments focuses on creating a facilitative market environment and a competent managerial staff without messing with micro-management.