How Local Leadership Rotation Breaks State-Business Ties in China. 2020. With Siyao Li. [ssrn][pdf]
Economic decentralization, while increasing regional autonomy in developing the economy, also increases the risk of government-business collusion and local capture. We argue that in authoritarian regimes, local leadership rotation mitigates collusion through breaking local government ties with business. We further propose that the nature of state-business ties is heterogeneous, with institutional government-business ties more stable, and personal government-business ties more easily broken. We test our theory in the context of local leadership turnovers and firm subsidies in China in the wake of the 2008 fiscal stimulus program. Using data from publicly listed firms, we find that new provincial governors, immediately after taking office, distribute significantly less subsidies to private enterprises. We also present suggestive evidence that governors have career incentives to distribute subsidies towards state-owned enterprises early in their tenure. Our findings illustrate that leadership rotation presents a partial solution to the problem of local capture in the absence of elections.
Ethnic Discrimination and Authoritarian Rule: An Analysis of Criminal Sentencing in China. 2020. With Rory Truex. [ssrn]
This paper presents the first analysis of ethnic discrimination in sentencing patterns in the People's Republic of China, focusing on drug cases in Yunnan province. We posit the "problem minority" hypothesis, which holds that discrimination in an authoritarian system emerges when an ethnic group becomes associated with behavior that generates social instability. On average, minority defendants in Yunnan have sentences that are about 1.5 to 7.5 months longer than Han defendants that have committed similar drug crimes. Further analysis of data from all provinces reveals that this bias is largest for groups heavily involved in the drug trade, and in provinces with significant minority populations and drugs.
Protecting Property through Political Office in China. 2018. [pdf] [appendix]
How do entrepreneurs protect their property and grow their businesses in systems without secure property rights? I argue that Chinese private entrepreneurs seek public office to protect their property from government predation. Drawing on rich empirical evidence including in-depth interviews and a unique national survey, I show how Chinese entrepreneurs deter local officials from demanding bribes, ad hoc taxes, and other types of informal payments by securing seats in the local legislature and using their political titles to signal political capital. Using a national survey of Chinese private entrepreneurs from 2000 to 2012, I show that entrepreneurs who serve in the local legislature spend an average of 14.5% less on informal payments to local governments. A simple signaling game further demonstrates how entrepreneurs use their political titles to signal strong political capital and deter expropriation
Economic decentralization, while increasing regional autonomy in developing the economy, also increases the risk of government-business collusion and local capture. We argue that in authoritarian regimes, local leadership rotation mitigates collusion through breaking local government ties with business. We further propose that the nature of state-business ties is heterogeneous, with institutional government-business ties more stable, and personal government-business ties more easily broken. We test our theory in the context of local leadership turnovers and firm subsidies in China in the wake of the 2008 fiscal stimulus program. Using data from publicly listed firms, we find that new provincial governors, immediately after taking office, distribute significantly less subsidies to private enterprises. We also present suggestive evidence that governors have career incentives to distribute subsidies towards state-owned enterprises early in their tenure. Our findings illustrate that leadership rotation presents a partial solution to the problem of local capture in the absence of elections.
Ethnic Discrimination and Authoritarian Rule: An Analysis of Criminal Sentencing in China. 2020. With Rory Truex. [ssrn]
This paper presents the first analysis of ethnic discrimination in sentencing patterns in the People's Republic of China, focusing on drug cases in Yunnan province. We posit the "problem minority" hypothesis, which holds that discrimination in an authoritarian system emerges when an ethnic group becomes associated with behavior that generates social instability. On average, minority defendants in Yunnan have sentences that are about 1.5 to 7.5 months longer than Han defendants that have committed similar drug crimes. Further analysis of data from all provinces reveals that this bias is largest for groups heavily involved in the drug trade, and in provinces with significant minority populations and drugs.
Protecting Property through Political Office in China. 2018. [pdf] [appendix]
How do entrepreneurs protect their property and grow their businesses in systems without secure property rights? I argue that Chinese private entrepreneurs seek public office to protect their property from government predation. Drawing on rich empirical evidence including in-depth interviews and a unique national survey, I show how Chinese entrepreneurs deter local officials from demanding bribes, ad hoc taxes, and other types of informal payments by securing seats in the local legislature and using their political titles to signal political capital. Using a national survey of Chinese private entrepreneurs from 2000 to 2012, I show that entrepreneurs who serve in the local legislature spend an average of 14.5% less on informal payments to local governments. A simple signaling game further demonstrates how entrepreneurs use their political titles to signal strong political capital and deter expropriation
